To counter complaints about Ford gas-guzzlers, Bill Ford Jr. wants to raise the gas tax and make it easier to buy hybrids like the new Ford Escape.
By Ed Garsten / The Detroit News
NEW YORK — At a single media event at the New York auto show Wednesday, Bill Ford Jr. said Ford Motor Co. would add another fuel-efficient hybrid to its lineup, the Mercury Mariner SUV, and took the wraps off a gas-chugging Mustang concept race car.
Then the avowed nature lover told reporters that he supports higher gasoline taxes and more government incentives to encourage consumers to buy hybrids, but conceded that a fuel tax hike probably isn’t politically viable.
Rarely have Bill Ford’s dueling priorities been on such public display. For as long as he has been Chairman and CEO of Ford, he has tried to be a capitalist even environmentalists can respect.
But he has instead been dogged and sometimes ridiculed by leaders of the green movement for simultaneously championing environmentally responsible vehicles and selling fuel-hungry profit-makers such as the giant Ford Excursion sport utility vehicle.
Even as gasoline prices reach record highs, Americans will not change their vehicle buying habits or embrace higher-priced hybrid technology unless they are hit hard in their pocketbooks, Ford said.
He suggested a combination of raising fuel taxes and offering federal tax incentives of $3,000 to consumers willing to pay sticker prices that are thousands of dollars higher for hybrid-electric vehicles than for conventional models.
“The problem we’ve had in this country,” Ford said, “is there’s been a real disconnect between what society says it wants and what individual customers say they want. Why? It’s driven principally by low fuel prices.”
Ford said he did not know what would be an appropriate fuel tax hike but he alluded to statements he made several years ago suggesting at least 50 cents per gallon.
Activists want more
A coalition of environmental groups applauded Ford for expanding its hybrid lineup to three with the Mariner, due in 2006 as a sister vehicle to the Ford Escape Hybrid that debuts this summer.
But the coalition also called on him to “lead the industry in curbing global warming and cutting America’s oil dependence by raising the fuel economy of all of its vehicles.”
Comprised of the Sierra Club, Global Exchange and Rainforest Action Network, the coalition plans to stage a demonstration Saturday outside the Jacob K. Javits Center where the auto show is being held. They will hand out material urging showgoers to call on Ford to raise the fuel economy for all of its vehicles.
A clearly miffed Bill Ford responded to the challenge by ticking off a list of the company’s environmental efforts.
“In a way this makes me mad,” he said, “because if you look at what we’ve done with the Rouge, nobody else has done that. We’re the first American company with a hybrid. We are pushing hard not only on fuel cells but internal combustion hydrogen.”
Ford’s renovation of the Rouge factory complex in Dearborn includes several environmentally friendly features, such as converting paint fumes into energy to help power the plant.
The activists remained skeptical.
Daniel Becker, Sierra Club’s director of global warming and energy programs, scoffs at the idea of using purely economic pressure to drive consumers to buy more fuel-efficient vehicles.
“We’re not opposed to properly structured higher gas taxes,” Becker said. “But manufacturers should also be challenged with higher fuel economy standards requiring them to add technology that will reduce pollution and curb global warming.”
Jason Mark, of the human rights group Global Exchange, praised Ford for marketing hybrid vehicles, which use a gasoline engine and an electric motor to save fuel and cut emissions.
“But we are left wondering: If Ford can build a clean car, why would it continue to manufacturer outdated gas guzzlers?” Mark said. “It’s clear that breaking our oil addiction isn’t a question of technology, but an issue of political will.”
The coalition tried to use helium balloons to launch a giant banner outside the convention hall Wednesday that proclaimed, “Ford: Escape All Gas Guzzlers Now.” But the banner did not get far off the ground before it fell victim to a chain link fence.
Hybrid sales low
Bill Ford said the automaker is working on technology aimed at increasing fuel efficiency across its product line, but offered no specific goals. In 2000, Ford had said it hoped to improve fuel consumption in its SUVs 25 percent by mid-decade but later said it would not achieve that goal.
Some sort of economic carrot and stick may be imperative in convincing reluctant consumers to spend several thousand dollars more for hybrid vehicles since it might take a year or more to realize that much in fuel savings, said Walter McManus, an analyst specializing in hybrid vehicles with market research firm J.D. Power and Associates.
“For acceptance to be very broad ... you have to get the cost/ratio benefit and it’s not there yet,” McManus said.
Japanese automaker Toyota Motor Co.p., has been fairly successful in marketing its Prius hybrid car and recently pumped up production plans, but sales volumes remain small. Through March, Toyota sold 9,918 of the vehicles, a 62.4 percent increase from the first three months of 2003, according to Autodata Corp.
General Motors Corp. has promised to put 1 million hybrid vehicles on the road by 2007, but GM product czar Bob Lutz said convincing the public to move toward more fuel efficient vehicles has always been a pocketbook issue.
“I think you’ve heard GM say the only way you’re going to drive the market toward smaller and more fuel efficient cars is through the market mechanism — gasoline price,” Lutz said Wednesday. “That’s how they get Europeans to drive smaller cars. But you couldn’t raise the price of fuel suddenly. That introduces a shock to the system.”
An immediate jump in gasoline taxes “wouldn’t be good for anybody,” agreed Eric Ridenour, executive vice president product development at DaimlerChrysler AG’s Chrysler Group.
Bill Ford admits that raising gas taxes is almost a political nonstarter. He contends, however, that the combination of higher fuel taxes, plus income tax incentives for hybrid vehicle buyers, is preferable to stricter federal corporate average fuel economy standards, known as CAFE, that have been in place since the 1970s gas crisis. The standards require that cars and trucks meet specific fuel economy ratings.
“Under the CAFE system we’re being pulled one way by the customer and pulled another way by regulation,” Ford said, “and to me that’s unsustainable in the long run.”