Ford urges incentives for auto industry
Lawmakers are asked to devise policies to ensure the survival of U.S. manufacturing.
By Jeff Plungis / Detroit News Washington Bureau
Bill Ford Jr.
WASHINGTON -- Ford Motor Co. Chairman and CEO Bill Ford Jr. called on Washington lawmakers to offer tax incentives to promote environmentally friendly technology and help American manufacturers compete.
Rising gas prices have hurt demand for profitable SUVs, which Detroit's automakers count on for a major portion of their sales and profits.
Ford reported a $1.2 billion third-quarter loss in its core North American unit.
"For longer than we had reason to expect, this country has been relatively immune to the violent swings in supply and demand of a finite commodity," Ford said Tuesday in a policy speech at the National Press Club. "I think most of us suspected we were living on borrowed time; the volatility of the past year confirmed it."
Bill Ford called for a series of steps to help bring new fuel-saving advanced automotive technologies to market, including expanded tax credits for research and development, converting outmoded factories into high-tech facilities and retraining displaced workers.
He said the government could help boost the market for alternative fuel vehicles, like the Escape Hybrid SUV and flex-fuel cars and trucks, which run on gasoline or ethanol, by restricting government fleets to only such vehicles by 2010. Bill Ford has pledged the automaker will produce 250,000 hybrids a year by 2010. Right now, it has two hybrid sport utility vehicles on the market. It has announced plans to produce 250,000 ethanol-capable vehicles in 2006
This was the third time over the past year Bill Ford has used a speech to bring government attention to issues facing Ford and other domestic automakers.
Last November, he called on auto industry executives to engage political leaders to lower health care costs. In September, Bill Ford called for a national summit to discuss the auto industry's role in solving national energy problems.
He reiterated his call for a national summit in Tuesday's speech. Later in the day, Ford met with senior officials in the Bush administration to discuss advanced technologies and the prospects for a summit.
"We were encouraged by their interest in what we are doing," Ford spokesman Ed Lewis said. "They still have our idea of a summit under review. They haven't ruled it out."
Concern about American manufacturing in Washington has spiked with the bankruptcy filing of Delphi Corp. The immediate concern of lawmakers has been to preserve the pensions of workers at companies in Chapter 11, like Delphi, Northwest Airlines and Delta Airlines.
Last week, the Senate passed legislation that would reform pension rules with an eye toward preserving the Pension Benefit Guaranty Corp., the federal agency that insures a minimum pension when companies default on their plans.
Automakers are concerned that some of the pension proposals would make it more difficult for them -- triggering higher pension plan payments based on poor credit ratings, for example. Only two senators voted against the pension bill: Michigan Democrats Debbie Stabenow and Carl Levin.
In his Washington speech, Ford warned that Detroit's automakers still provide 90 percent of the automotive jobs in the United States and have purchased 80 percent of all U.S. auto parts, and that legacy is at stake.
He said the problems facing the auto industry were too big for the automakers to solve alone. Other countries had recognized the importance of industrial manufacturing and governments had devised policies to ensure their survival, Ford said.
"Now, more than ever, with the competitive pressures of globalization, America needs to respond to the economic challenges of our time," Ford said. "Our government must view the challenges of this era through the same lens -- and stand by American workers, and American industry, as it always has."