Ford Motor Co. (F.N) alerted federal regulators there could be a problem with its emissions and fuel-economy testing, after employees reported issues with the process the automaker uses to ensure its models meet U.S. rules.
The automaker has hired an outside firm to investigate certain specifications used in its testing, according to a statement. A group of employees raised concerns in September, and Ford said it reported the issue to the U.S. Environmental Protection Agency and the California Air Resources Board this week.
The probe doesn’t involve looking for defeat devices, which Volkswagen AG used in the diesel-emissions scandal that’s cost the company at least 28 billion euros (US$32 billion). Ford said it hasn’t found any inaccurate fuel-economy ratings yet. Still, the automaker is mulling changes to the way it tests to ensure vehicles meet regulations.
“It has been a long and deep discovery process,” Kim Pittel, Ford’s group vice president of sustainability, environment and safety engineering, said in an interview. “At this time, there’s been no determination that we have an issue with our fuel-economy labels or our emissions certification. It’s too early in the investigation to say that.”
Ford shares plunged as much as 3.3 per cent after the market close. The stock pared declines and was down 0.8 per cent as of 5:36 p.m. Thursday in New York.
“I’m not too worried about it for now, at least,” David Whiston, an analyst with Morningstar Inc., said by phone. “It certainly doesn’t seem like a defeat device issue; its sounds more like the methodology of the testing. That’s very different from outright cheating and lying.”
EPA’s Reaction
The EPA confirmed Ford disclosed the potential issue on Monday and briefed the agency on its initial findings the following day.
“The investigation is ongoing and the information too incomplete for EPA to reach any conclusions,” Michael Abboud, an agency spokesman, said by email. “We take the potential issues seriously and are following up with the company to fully understand the circumstances behind this disclosure.”
The EPA intends to determine whether the discrepancies Ford discovered were widespread or isolated, an agency official briefed on the matter said. The regulator is taking the matter seriously, and Ford’s voluntary disclosure was seen as positive, the official said.
The California Air Resources Board had no immediate comment. David Clegern, a spokesman, said by email the regulator hadn’t heard from Ford as of Thursday.
Ranger Review
The first vehicle Ford is evaluating as part of its review is the 2019 Ranger pickup, which went on sale early this year.
Ford has had fuel economy issues before. It restated ratings on the C-Max hybrid model twice within a year: from 49 miles per gallon to 43, then to 40 in June 2014. It gave owners checks for more than $1,000 as compensation.
“For investors, I don’t think there’s anything to do at this point,” Morningstar’s Whiston said. “You just have to stay tuned for more information.”
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