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Ford Q1 profits dragged down by warranty costs

General Motors isn't the only Detroit automaker posting falling profits in the first quarter. Ford just released its Q1 2014 financial data, and it reported a net income of $989 million, down $622 million from Q1 2013. The drop is partially blamed on higher warranty and recall expenses than the company had anticipated.
Financially, Ford suffered a rough quarter almost across the board. Its pre-tax profit of $1.4 billion was also down $765 million from a year ago. Things were even worse in the North American market where operating profit fell significantly to $1.5 billion, down from $2.392 billion in Q1 2013. However, its global revenue ticked up slightly to $35.9 billion, from $35.6 billion in this period in 2013.
Ford admitted that it spent about $900 million on expenses that it hadn't planned for during this quarter. According to Reuters, the company paid about $400 million in additional warranty and recall costs in North America. The automaker didn't explain why the costs were so much higher than expected. However, in the last three months, Ford has had several recalls, including on the 2001-2004 Escape for rust, Explorer for its steering, Edge for its fuel line and others.

Ford hybrids getting update to improve fuel economy

Ford has announced that it is introducing "calibration updates designed to improve on-road fuel economy for owners of the 2013 Ford C-Max Hybrid, 2013 Ford Fusion Hybrid and 2013 Lincoln MKZ Hybrid."
We can speculate that these changes are at least due in part to lawsuits over mileage claims of hybrid vehicles. The automaker is enhancing 2013 models starting in August by raising their electric cruising speed to 85 miles per hour from 62 mph, optimizing the use of active grille shutters and the climate control system, shortening the engine warm-up period by 50 percent and reducing electric fan speed to minimize the fan's energy consumption.
It bears mentioning that Ford is doing pretty well in the US electrified vehicle market this year. The company claims to have grown its share in the segment by 12 points to 16 percent while taking a high number of Toyota Prius trade-ins in the process. Conversely, Toyota has experienced a five-percent drop in new-Prius sales over the same period. Additionally, Ford states that it has increased its share of the US vehicle market by one percent this year, more than any full-line automaker.

Ford announces first non-pursuit-rated police car ever

Ford announced its first non-pursuit-rated Police Interceptor ever, based on the Taurus, which employs the smaller 2.0-liter EcoBoost four-cylinder engine in place of similar pursuit-rated Police Interceptors powered by naturally aspirated 3.5-liter and 3.7-liter V6s and the top-spec 3.5-liter EcoBoost V6. Officially called the Special Service Police sedan, the car was commissioned at the request of law-enforcement agencies that desire a more fuel-efficient vehicle for detectives, administrators and campus police, who don't necessarily need pursuit-rated vehicles.
The 2.0-liter EcoBoost engine produces 240 horsepower and 270 pound-feet of torque, but more importantly, it allows the SSP sedan to achieve somewhere in the neighborhood of 22 miles per gallon city and 32 mpg highway, which are the civilian 2.0-liter Taurus' official EPA ratings. Ford estimates that the SSP sedan will get 20 mpg city, 30 mpg highway and 23 mpg combined, with the help of Active Grille Shutters that open to allow more cooling air through to the radiator, or close to optimize aerodynamics and fuel economy. Those numbers compare favorably to the discontinued Crown Victoria-based Interceptor's 14 mpg city and 21 mpg highway and the newer Taurus-based cars equipped with V6s, the most fuel efficient of which gets 18 mpg city and 26 mpg highway.
If it was driven 90,000 miles over the course of three years, a 2.0-liter SSP sedan would save law enforcement agencies $5,042.92 versus the Crown Vic, Ford estimates. The EPA is expected to post official fuel-economy numbers for the SSP sedan in December. Until then, read the press release below for more information.