Ford Under U.S. Criminal Investigation of Emissions Testing

The U.S. Justice Department has opened a criminal investigation into Ford Motor Co.’s emissions certification process, intensifying an issue the automaker disclosed two months ago.

The government notified the company of its investigation earlier this month, Kim Pittel, group vice president of sustainability, environment and safety engineering, said Friday in a statement. Ford said in a regulatory filing that it is cooperating with all government agencies.

The probe makes Ford at least the third major automaker to fall under U.S. federal investigation over emissions in the span of a few years. Volkswagen AG paid a $4.3 billion penalty in 2017 for misleading regulators and customers about its diesel engines’ emissions. Fiat Chrysler Automobiles NV, which last month recalled almost 863,000 vehicles that violate pollution standards, faces an ongoing criminal probe, Bloomberg News has reported.

Ford said in February that it may have taken a flawed approach to calculating the effect of aerodynamic drag and tire friction on the fuel economy of its vehicles outside of testing labs. It hired a company earlier this year to help conduct an investigation that could stretch into the summer.

Ford shares shrugged off the disclosure following a better-than-expected earnings report Thursday. The stock was up 10 percent to $10.36 as of 11:01 a.m. Friday in New York after climbing as much as 11 percent earlier.

The U.S. Environmental Protection Agency referred questions to the Justice Department, which declined to comment.

“The government can conduct investigations that are civil or criminal. It chooses criminal when it thinks it may find evidence that the company intentionally violated the law,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

Ford discovered potential flaws in how it calculated key data used to determine new-vehicle fuel economy ratings and tailpipe pollution levels. It’s unclear whether the problems Ford discovered led to inaccurate mileage ratings.

When Ford disclosed the issue in February, the automaker said “there’s been no determination that this affects Ford’s fuel economy labels or emissions certifications.”

“Our focus is on completing our investigation and a thorough technical review of this matter and cooperating with government and regulatory agencies,” Pittel said Friday.

The investigation doesn’t involve the use of so-called “defeat devices” that VW was found to be using to game emissions testing, he said.

Ford has had fuel-economy issues before. It restated ratings on six models, including the Fiesta, C-Max and Fusion hybrid cars, in 2014 and cut checks for as much as $1,050 to more than 200,000 owners to compensate for their vehicles’ mileage shortcomings.

Hyundai Motor Co. and Kia Motors Corp. in 2014 were hit with a $100 million civil penalty after selling roughly 1.2 million vehicles with inflated fuel economy ratings. The inaccurate ratings stemmed from faulty procedures used by the companies to calculate road-load forces.