1979 Ford Bronco on 2040-cars

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Ford taken to task by gov't for Chicken Tax end-around

Ford is in a bit of a pickle for importing and selling Turkey-built Transit Connect cargo vans as passenger vehicles in the US, then converting them to commercial-vehicle specification stateside in an effort to bypass a 25-percent tax imposed on vehicles imported for commercial use. Automakers are required to pay a 2.5-percent tax on imported passenger vehicles.
The Blue Oval got into trouble for this in a January ruling in which U.S. Customs and Border Protection officials asked Ford to stop the practice of importing the Transit Connect vehicles with passenger seats, then removing and shredding them. Now Automotive News reports that Ford is appealing the ruling. The 25-percent "Chicken Tax," as the tariff is often called, is 50 years old and was enacted as a response to a German tariff on chickens. Like Ford, Chrysler bypasses the higher tariff, but it does so in a different manner. It partially disassembles Sprinter cargo vans before shipping them to the US, then rebuilds them at a plant in South Carolina.
But the ruling against Ford's strategy states that it "serves no manufacturing or commercial purpose" and is there to "manipulate the tariff schedule," Automotive News reports. As Ford's appeal goes through, it is importing the Transit Connect and paying the higher tax, hoping for a favorable outcome and planning to build the next-generation Transit Connect, which it plans to launch before the end of the year, in Spain.

Ford Model e losing billions as it says EV unit should be seen as startup

DETROIT — Ford Motor Co.'s electric vehicle business has lost $3 billion before taxes during the past two years and will lose a similar amount this year as the company invests heavily in the new technology. The figures were released Thursday as Ford rolled out a new way of reporting financial results. The new business structure separates electric vehicles, the profitable internal combustion and commercial vehicle operations into three operating units. Company officials said the electric vehicle unit, called “Ford Model e,” will be profitable before taxes by late 2026 with an 8% pretax profit margin. But they wouldn't say exactly when it's expected to start making money. Chief Financial Officer John Lawler said Model e should be viewed as a startup company within Ford. “As everyone knows, EV startups lose money while they invest in capability, develop knowledge, build (sales) volume and gain (market) share,” he said. Model e, he said, is working on second- and even third-generation electric vehicles. It currently offers three EVs for sale in the U.S.: the Mustang Mach E SUV, the F-150 Lightning pickup and an electric Transit commercial van. The new corporate reporting system, Lawler said, is designed to give investors more transparency than the old system of reporting results by geographic regions. The automaker calculated earnings for each of the three units during the past two calendar years. Model e had pretax losses of $900 million in 2021 and $2.1 billion last year, and it is expected to lose $3 billion this year. In the past two years Ford has announced it would build four new battery factories and a new vehicle assembly plant as well as spending heavily to acquire raw materials to build electric vehicles. By the end of this year, the company based in Dearborn, Michigan, expects to be building electric vehicles at a rate of 600,000 per year, reaching a rate of 2 million per year by the end of 2026. Ford Blue, the unit that sells internal combustion and gas-electric hybrid vehicles, made just over $10 billion before taxes during the last two years. Ford Pro, the commercial vehicle unit, made $5.9 billion during those years, the company said. For this year, Ford expects Ford Blue to post a $7 billion pretax profit, modestly better than last year. Ford Pro is expected to earn $6 billion before taxes, nearly double its earnings last year, Lawler said. Ford was to present the new structure, announced last March, to analysts and investors on Thursday.

2017-19 Ford Super Duty trucks recalled for tailgates that could open

Ford announced two separate recalls today, though neither has resulted in any known injuries. The first recall, which deals with a tailgate malfunction, affects 261,617 examples of 2017-2019 F-250, F-350, and F-450 Super Duty pickups. The second, which anticipates the possibility of a fuel leak, affects 3,893 units of 2020 Explorer and 2020 Lincoln Aviator SUVs with 3.0-liter engines. Ford says tailgates might accidentally open on some 2017-2019 Super Duty trucks because of a short circuit. If the pickups have an electric tailgate latch-release switch on the tailgate handle, water might get into the wiring. If the water hits the right spots, a short circuit could cause the switch to release the tailgate latch. In a worst-case scenario where the tailgate opens while driving, contents of the truck's bed could fall out and create a safety hazard. Dealerships will fix the problem by modifying the tailgate frame wiring harnesses with jumper pigtails and install a new tailgate handle release switch. Of the lot, 231,664 trucks are in the U.S., and 29,953 are in Canada. The Ford recall number is 19S48.  The second recall is much smaller, involving fewer than 4,000 vehicles. In certain 2020 Explorers and Aviators with 3.0-liter engines, Ford says, "The convolute protective sleeve on the liquid fuel line is not long enough, which may allow for potential hard contact with the convolute-protected vapor fuel line. Over time, with vibration and engine roll, hard contact between the two fuel lines could cause the convolute on the vapor fuel line to rub through the plastic liquid fuel line." If that happens, it could be a fire risk and hazardous for drivers and passengers. Only 35 of those SUVs are in Canada, and the rest are in the United States. Dealers will fix the problem by replacing the defective convolute with a full-length piece and tying it down with a strap. The recall reference number for the Aviators and Explorers is 19S49. The recall adds to what has otherwise been a rocky early production phase for the new Explorers and Aviators.