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U.S. opens criminal probe into Ford emissions certification

FILE PHOTO: The Ford logo is seen at the North American International Auto Show in Detroit, Michigan, U.S., January 15, 2019. REUTERS/Brendan McDermid/File Photo (Reuters)

By David Shepardson and Ankit Ajmera

WASHINGTON (Reuters) - The U.S. Justice Department has opened a criminal investigation into Ford Motor Co's emissions certification process in the United States, the automaker disclosed on Friday, saying it was cooperating fully with the probe and still conducting its own internal review.

Ford said in a statement the Justice Department had notified it earlier this month of the criminal investigation, which made the automaker the latest to come under scrutiny for adherence to emissions standards by U.S. officials.

"Ford is fully cooperating with the government, and we’ll keep them posted on what we’re finding through our investigation and technical review," the company said.

Justice Department spokesman Peter Carr declined to comment. The Environmental Protection Agency also declined comment.

Ford has held meetings with the California Air Resources Board and EPA officials and turned over documents related to its review, a person briefed on the matter said. The No. 2 U.S. automaker has also submitted a testing plan that has been approved by regulators, the person said. The first vehicle Ford is evaluating is the 2019 Ranger pickup truck.

Ford potentially faces significant financial penalties as regulators have taken a tough line on emissions issues.

EPA Administrator Andrew Wheeler said earlier this month the agency had other enforcement actions against other automakers "in the works."

"When people are not playing by the rules and they are creating more pollution ... we will catch them, we will hold them accountable," Wheeler said.

Ford disclosed an issue with emissions to the EPA and the California in February, and hired outside law firm Sidley Austin and experts to investigate its vehicle fuel economy and testing procedures after employees raised concerns about analytical modeling that is part of its fuel economy and emissions compliance process.

Ford said previously it did not know whether it would have to correct data provided to regulators or consumers. But the company reiterated in a regulatory filing Friday that the emissions issue does not involve the use of so-called defeat devices. (https://bit.ly/2VqjHpl)

U.S. and California regulators have been cracking down on automakers for emissions cheating following revelations in 2015 that German automaker Volkswagen AG had used defeat devices to make models equipped with diesel engines appear to comply with emissions standards when they emitted far more pollution than allowed in real-world driving.

Ford said it had been looking into concerns raised by employees since last fall that incorrect calculations were used to translate test results into vehicle mileage and emissions data submitted to regulators.

Ford is evaluating changes to the process it uses to develop fuel economy and emissions figures "including engineering, technical and governance components," the Dearborn, Michigan-based company said.

In January, Fiat Chrysler Automobiles NV agreed to an $800 million settlement to resolve claims by the U.S. Justice Department and the state of California that it used illegal software to produce false results on diesel-emissions tests. A Justice Department criminal investigation is pending.

U.S. regulators are also investigating Daimler AG for alleged excess emissions in Mercedes-Benz diesel vehicles, but the Justice Department and EPA have declined to comment on the status of the probe.

Daimler has declined to comment, but has previously acknowledged it faces investigations in Germany and the United States.

In total, Volkswagen has agreed to pay more than $25 billion in the United States over the diesel emissions scandal, for claims from owners, environmental regulators, states and dealers, and it offered to buy back about 500,000 polluting U.S. vehicles.

Ford has been embarrassed in the past by errors in fuel economy claims. In 2013, the automaker cut by seven miles (11 km) per gallon the claimed fuel economy for its C-Max hybrid model following complaints that real-world mileage did not match the claimed fuel economy. In 2014, Ford lowered fuel economy ratings for six other models and offered compensation to customers.

(Reporting by Ankit Ajmera in Bengaluru and David Shepardson in Washington; Editing by Andrea Ricci and Tom Brown)