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If recent criminal action against automakers is any indication of what’s to come, Ford Motor Company may well be in for a bumpy 2019. Though the company posted a better than originally estimated Q1 profit, buried in Ford’s most recent filing with the Securities and Exchange Commission, the Detroit giant informed the SEC that the Department of Justice had opened up a criminal investigation into the company’s emissions certification.
According to Ford’s SEC filing, Ford has been aware of the concern about its emissions verification process since last year. The issue, according to Ford, was then brought up to the proper authorities at the California Air Resource Board, as well as the Environmental Protection Agency, in February of this year by Ford itself. Though Ford didn’t get into specifics about the scope or scale of the Department of Justice’s investigation, nor the issues around the emissions certification, with recent high-profile actions taken against Volkswagen and Fiat Chrysler, among smaller action taken against other manufacturers around the world, we may be at just the beginning of the case.
Unlike Volkswagen and Fiat Chrysler, however, where emissions were purposely curbed during exhaust tests with specifically developed software, Ford emphatically claims that there was no defeat device used to pass emissions. The Blue Oval, though, covers its bases stating, “We are fully cooperating with all government agencies. Because this matter is still in the preliminary stages, we cannot predict the outcome, and we cannot provide assurance that it will not have a material adverse effect on us.”
Ford’s emissions investigation comes on the heels of the multiple scandals we’ve seen over the last three years. It started with watching Volkswagen fall from grace as it was recognized that the German manufacturer deliberately lied and cheated emissions testing. The fallout saw numerous executives being fired, fined, and some—like former VW CEO Martin Winterkorn—have even been sentenced to serve real jailtime. As for the companies, those too have seen massive fines levied onto them, with one of the largest being Fiat Chrysler settling for over $650 million in a “No Guilt” deal made by the federal government and the state of California.
As Ford said in its SEC filing, it’s still too early in the investigation to make any predictions of the outcome. However, there’s increased focus on the state of automobile emissions, especially with a brand new United States Congress intent on pushing forward legislation to curb greenhouse gas emissions to halt climate change. Add a growing populist movement to reign in corporate greed at the expense of consumers—Ford did just post Q1 profits of $2.4 billion—and depending on the investigation’s outcome, Ford could be in serious trouble.
