Ford is having a tough time. After reporting their first-quarter profit drop of 34% to $1.15 billion, it seems their problems have been compounded by a federal investigation into their emissions testing. The U.S. Department of Justice has opened a criminal investigation into Ford’s emissions certification process in response to the company’s confession that there were some issues.
Ford revealed in February its road-load specifications testing was flawed. It involved simulation of aerodynamic drag and tire friction's impact on fuel economy. Though it doesn't seem intentional, and Ford actually brought up the problem, the investigation will have to run its course to find out if anything criminal was actually done. Ford is fully cooperating with the authorities as reported in a regulatory filing.
Ford is also investigating some concerns actually raised by employees that errors were made in calculations for test results of both mileage and emissions data submitted to regulators. Ford stated earlier this year that it was evaluating changes to the process it uses to develop fuel economy and emissions figures, “including engineering, technical and governance components.”
Though the investigation by the Justice Department is only in the early stages, the likelihood that this will have an impact on the company's stock is almost certain since it rides on the heels of profitability losses and also occurs in the wake of Volkswagen's dieselgate scandal from three years ago that the German company is still dealing with today. We'll see what comes of the investigation in the next few months. Ford could really use some good news right now.