Is This the Scandal That Destroys Ford Motor?

Talk about making an entrance! No sooner had Ford (NYSE: F  ) introduced its new C-Max Energi hybrid SUV than General Electric  (NYSE: GE  ) placed an order for 2,000 units. With an EPA-estimated gas mileage of 47 mpg, and a new "miles-per-gallon-equivalent" rating estimated at 108, C-Max looked like it blew away the fuel efficiency standards set by archrival General Motors' (NYSE: GM  ) Chevy Volt -- and giving Toyota's (NYSE: TM  ) Prius and even Nissan's new electric Leaf a run for their money as well.

And then ... disaster struck. A raft of impartial reviewers, all arguing that the C-Max's ballyhooed fuel efficiency numbers were vastly overstated. Can Ford survive this scandal? Can its new car still be a success? Listen in, as Fool contributor Rich Smith explains.

Ford has been performing incredibly well as a company over the past few years -- it's making good vehicles, is consistently profitable, recently reinstated its dividend, and has done a remarkable job paying down its debt. But Ford's stock seems stuck in neutral. Does this create an incredible buying opportunity, or are there hidden risks with the stock that investors need to know about? To answer that, one of our top equity analysts has compiled a premium research report with in-depth analysis on whether Ford is a buy right now, and why. Simply click here to get instant access to this premium report.


Read/Post Comments (5) | Recommend This Article (2)

Comments from our Foolish Readers

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  • Report this Comment On December 21, 2012, at 5:16 PM, SuntanIronMan wrote:

    Fool (Capital-F) analysts/writers are way to quick to use words like "scandal" and "disaster" to describe any and everything (also "debacle" and "tragedy"). This did not use to be the case, but I've seen a lot more of this in recent months. When something truly is a scandal or a disaster, you kind of take all the meaning out of those words by calling something like this a scandal and a disaster.

    (I do not own shares Ford or any company mentioned in thus article/video.)

  • Report this Comment On December 21, 2012, at 5:35 PM, techy46 wrote:

    Don't think so EPA testing is done at 55mph with bursts to 80mph while other tests are done at constant 65mph. 55mph can used electric motor while 65mph requires gas motor.

  • Report this Comment On December 21, 2012, at 5:57 PM, Polaris600 wrote:

    Who is this guy? He has 2 different cars mixed up, the C-max hybrid is rated 47 but all the car magazines are reporting 37 to 42 in real world driving. The C-max energi is what GE purchased, this is the car that cost $30k after rebates and can drive 21 miles on electricity before the gas engine is started. As an onsite company loaner car, they may never put gas in it. Both cars are very good, the energi wins if you have solar panels on your roof or a place to charge it at work.

  • Report this Comment On December 23, 2012, at 8:13 PM, neamakri wrote:

    I agree with techy46. I read that the automakers know exactly how the EPA tests. As such, they "tune" their onboard computers to give excellent results during those EPA tests.

    That being said, polaris600 has pointed out that the numbers are indeed bloated to the point of being very inaccurate.

    Bottom line; check car reviews before purchasing.

  • Report this Comment On December 24, 2012, at 3:49 AM, EllenBrandtPhD wrote:

    The author is just not following the news feeds!

    The flaw is clearly in the testing protocols developed so far for hybrids.

    Ford has handled the issue very well, and the controversy - not scandal - will turn out to be Bullish for the stock.

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