Ford says SUV fuel economy goal getting tougher
TRAVERSE CITY, Mich., Aug 8 (Reuters) - Ford Motor Co.'s goal of increasing the fuel efficiency of its sport utility vehicles by 25 percent in five years has become tougher because some new fuel-saving techniques have failed to live up to expectations, Ford's environmental chief said on Thursday.
"When you look at the different technologies we thought we could employ, as you get further down the development stream you might find they don't give you the fuel economy improvement you thought," Sue Cischke, Ford's vice president of environmental and safety engineering, told Reuters.
Cischke said that while Ford was still committed to meeting its goal by 2005, "it's not a done deal by any chance, and it's not as easy as some people might think it is. But it is a commitment we made, and it is driving a lot of the actions we're taking in the company."
Ford captured the nation's attention in 2000 when it made the pledge to increase its SUV fuel economy, part of a strategy by Chairman Bill Ford Jr. to improve the automaker's environmental image. General Motors Corp. quickly followed by vowing to keep its SUVs more efficent than Ford's.
Ford's pledge covered all SUVs it builds --including models from Land Rover, Volvo and Mazda-- and would raise its average SUV fuel economy from about 16 miles (25 km) per gallon to about 20 miles (32 km) per gallon. As with federal fuel economy standards, Ford's target is not an average of all SUV models, but the average of all SUVs it actually sells.
"The model mix is always a challenge, because people are buying the vehicles they think they need," Cischke said.
Cischke spoke on the sidelines of the auto industry's annual Management Briefing Seminars in this resort in northern Michigan.
Late next year, Ford will begin building a version of its Ford Escape small SUV with a hybrid gasoline-electric powertrain, capable of achieving 40 miles (64 km) per gallon in city driving. Cischke and Bill Ford both said this week that Ford would build as many hybrid Escapes as the market would demand, unlike the limited production of hybrid models by Honda and Toyota on sale now.
But Cischske said a similar hybrid system that had been planned for the larger Ford Explorer in 2004 had been cancelled because it failed to meet the goal of improving efficiency by eight to 10 percent.
"When we got to implementing it during the development process, we realized we were not going to get anywhere near that in terms of fuel economy improvement," Cischke said. "So it didn't make sense to put it in the vehicle."
Ford's progress to date has been mixed. Last year's redesign of the Explorer increased fuel economy only on some versions, while the redesigned Ford Expedition and Lincoln Navigator use less fuel on some models and more gasoline-per-mile on others.
The job has also been made more difficult by Ford's cost-cutting campaign, aimed at generating $7 billion in annual pretax profits by mid-decade.
"It's very challenging, and especially with these economic times it makes it even tougher," Cischke said.
Ford did side with other automakers earlier this year in opposing increases in federal fuel economy standards, and also opposed a California law allowing state officials to reduce carbon dioxide emissions from automobiles, essentially by setting new efficiency standards.
The Alliance of Automobile Manufacturers has said it will challenge the law in court, arguing California cannot supercede federal standards with its own rules. But Cischke said such a move may be premature, echoing comments from Bill Ford on Wednesday when he said he wanted to "lower the temperature" of the debate.
"The industry in general hasn't figured out what they're going to do about CO2, and at the end of the day, they might end up saying the only way we can make sense of this is to take it to court," she said. "I don't think we're there yet...they (California officials) are just as confused as we are about what it means."
Cischke noted that Ford had not joined a lawsuit filed by GM and DaimlerChrysler AG's Chrysler arm against California for mandating sales of electric vehicles. And she said Ford prefers that the industry works with regulators to set voluntary targets, just as Europe does.
The SUV fuel economy pledge "shows a direction, and what we're trying to do in the company, and that we're making tough product choices to get there."