Ford Touts Environmental Concerns
May 3, 2001 -- Is Ford going green?
As rising gas prices and the Bush administration's energy policy become hot-button issues heading into the summer driving months, the Ford Motor Co. announced today that it has begun implementing its plans to produce more fuel-efficient SUVs, and has created an executive team to develop further solutions to global warming.
Company Chairman William Clay Ford Jr. wrote in the company's second annual "corporate citizenship" report that the earth's increasing temperature, "stands out from other environmental issues because of its potentially serious consequences and its direct relationship to our industry."
And Ford's president, Jacques Nasser, wrote "there's no doubt that sufficient evidence exists" showing that the carbon dioxide released when gasoline is burned contributes to global warming. America's second-biggest automaker, Nasser wrote, must "move from argument to action."
Cautious Optimism from Greens
But are Ford's stated concerns real environmental stewardship or just good public relations? Environmentalists are responding with cautious optimism.
Daniel Becker, director of the Sierra Club's Global Warming and Energy Program, says he "applauds Ford for recognizing the seriousness of global warming, acknowledging that its vehicles create a large part of the problem and committing to cut that pollution," but adds: "Ford is accelerating the race for cleaner cars, but we're only in the first lap."
This is not the first time that Ford has trumpeted its environmental concerns.
Last spring, the company first announced its basic plan to increase the gas mileage of its popular fleet of sport utility vehicles by 25 percent over the next five years.
"Our approach to SUVs and the environment has not always been responsible," William Clay Ford Jr. acknowledged at the time, in a comment that raised eyebrows among environmentalists and stockholders alike.
Even after the changes, Ford's highly popular but gas-guzzling SUVs will still be among the least fuel-efficient vehicles in production — currently the Excursion gets 13 miles per gallon, and the Explorer 16 mpg — but Ford has estimated the better mileage could save 1,700 gallons of gas over the life of an SUV.
Still, as Becker notes, Ford estimates its own vehicles currently account for 400 million metric tons of carbon dioxide, a substantial percentage of world emissions.
"This amount is a shocking figure," says Becker. "If Ford were a country, it would be the 10th-largest global warming polluter in the world." And vehicles built by rival GM, as the world's biggest carmaker, account for a still larger percentage of emissions.
What’s the Incentive?
Certainly Ford has little financial incentive to change its ways. SUVs have accounted for a large chunk of the company's record earnings in recent years, and Ford makes a profit of up to $18,000 on every SUV it sells.
In today's report, the company also admits, "we have already found the going tough," when it comes to implementing environmentally friendly changes to its autos, citing its five-year product cycle and shareholder concerns as obstacles to making cleaner cars.
Still, Ford has not been the only automaker touting an environmentally friendly approach. GM and DaimlerChrysler have announced similar commitments to improving SUV gas mileage.
Additionally, Ford, GM and DaimlerChrysler all have plans to roll out fuel-efficient, "hybrid" gas-and-electric versions of some of their most popular models in the next few years.
Jennifer Finlay, director of business engagement for the World Resources Institute in Washington, says car companies want to be "proactive on the climate change agenda," given the acknowledged link between cars and global warming.
As Finlay notes, companies benefit from a public-relations standpoint if they are seen as leaders on issues of public interest. And government regulators may be placated by such announcements and measures as well.
Ahead of the Bush Administration
Ford's concerns, however, actually have moved them out in front of the Bush administration's position on global warming.
In March, President Bush announced the U.S. would not move to implement the 1997 Kyoto treaty established to help curb global warming — a decision that was greeted with dismay by the United States' European allies.
And the administration seems unlikely to throw new regulations at the auto industry in the near future. Indeed, Bush's chief of staff, Andy Card, served as the chief Washington lobbyist for General Motors prior to joining the White House staff.
Vice President Dick Cheney also announced in a speech this week that the administration's energy policy would be focused on increasing supply rather than cutting back on demand.
"It's ironic that Ford is increasing efficiency just when the government is saying, 'You don't need to conserve,'" says Becker.
But Finlay points out that carmakers may also feel public pressure, particularly with surveys showing Americans supporting environmentally sound programs to a greater extent than President Bush does. An ABCNEWS.com poll released in April showed 61 percent of Americans saying the United States should join the Kyoto Treaty, with just 26 percent opposed.
"There's a gap between what society wants and what the administration is doing," says Finlay, "so there's more pressure on businesses to step and do the right thing and be leaders."
ABCNEWS.com's Mark Baumgartner contributed to this report.