Ford Motor Company chairman William Clay Ford, Jr. largely has his nameto thank for his quick rise to the top. But after just two years on thejob, he’s decided to take on a challenging mission: improving theenvironment while making cars people will buy. Can Ford carry out thisplan while leading a profitable company? The Great Lakes RadioConsortium’s Julie Halpert reports:
Transcript
Ford Motor Company chairman William Clay Ford, Jr.
largely has his name to thank for his quick rise to the top. But after just two
years on the job, he’s decided to take on a challenging mission: improving
the environment while making cars people will buy. Can Ford carry out this
plan while leading a profitable company? The Great Lakes Radio
Consortium’s Julie Halpert reports.
In 1970, the nation’s cities faced a severe air pollution problem. So
Congress passed the Clean Air Act that, in part, tightened standards on auto
exhaust. Car makers said those standards couldn’t be met, yet they were
quickly able to do so. Still, over the next twenty years, automakers
consistently fought new pollution and fuel economy standards as costly. And
every time, they complied with the rules without breaking the bank.
With this kind of track record, it’s not hard to see why domestic
automakers have a credibility problem when it comes to environmental
issues.
But now, Ford Motor Company is trying to set itself apart. Bill Ford
has declared his intent to address all types of pollution coming from cars.
For instance, he decided to tackle the controversial subject of global
warming in a recent speech to environmentalists in London.
“What role should the business community play in
addressing this issue? Well, there’s no doubt that business was overly
cautious — some may even say obstructionist — in its initial reaction.
Whatever reasons there were, and however genuinely felt they were, I
believe now there is more than enough evidence to warrant an immediate
and comprehensive — and considered response.”
Ford’s statement was shocking, since the auto companies typically
have fought initiatives to curb global warming. But it should not has come as
a surprise, because when Bill Ford took the reins of his company, he
announced his plan to make Ford the most environmentally friendly
automaker. So far, he appears to be trying to do just that. He’s promoting
efficient, clean manufacturing. He hopes to make redesign of Ford’s 80-year-
old Rouge manufacturing plant in Dearborn, Michigan, a shining example.
“We think this is a terrific opportunity to transform the
icon of 20th century manufacturing into a model of 21st century sustainable
manufacturing. The new Ford Rouge Center will be a world-class center of
lean and environmentally sensitive manufacturing.”
Ford also is targeting big polluting sport utility vehicles as part of his
environmental mission. He recently announced plans for the first mass
produced SUV to get 40 miles to the gallon. That was a pleasant surprise to
Dan Becker. Becker is with the Sierra Club. He was impressed when Ford
included in its stockholder report a Sierra Club quote calling the Ford
Expedition a rolling monument to environmental destruction.
“The first step in changing your behavior is recognizing
the problem with the behavior. So that when Ford admitted their SUVs were
unsafe and polluted too much, that was a first step that had to come before
they began to change them.”
Ford has pledged to increase fuel economy in sport utility vehicles by
25% over the next five years. But while Becker heralds that development,
others are more suspicious. Jason Grumet directs a group of northeast state
regulators. He believes the company is merely trying to head off criticism of
SUVs while maintaining their share of the market for the gas-guzzling
vehicles.
“They don’t want SUVs to become the fur coats of the
next decade so they’re trying to take some modest steps within the
boundaries of big internal combustion engines to be able to suggest a
corporate ethos of environmental concern.”
But federal regulators say that Ford’s actions shouldn’t be taken for
granted. The EPA’s Bob Perciasepe says that Ford is headed in the right
direction.
“Every little bit helps. We have to take the first step
toward making the existing cars that we use more fuel efficient, while we’re
investing money in newer technologies that will do even better.”
Others applaud Ford for trying to clean up the SUV market.
Automotive analyst David Cole says that Ford can’t simply turn its back on
the popular vehicles.
“You look at Bill Ford and he is absolutely a sincere
environmentalist. There’s no question about that in my mind and at the same
time he is a sincere business person that recognizes that his company, if it’s
going to be able to do what he wants to do over the long term, has to be very
profitable.”
Cole says those SUV profits could then fund ongoing research into
new environmentally friendly technologies.
But the question remains: will such changes be good for Ford’s bottom
line?
David Andrea, chief economist of CSM Worldwide, thinks Ford can
generate profits. He says the effort to reduce pollution in manufacturing, in
particular, could save money.
“If you view any type of pollution as a waste and waste
as a cost, it’s in perfect alignment with continually improving your cost
structure and your bottom line.”
Andrea says that Wall Street will naturally be keeping tabs on the
company’s stock price. Similarly, EPA and environmentalists plan to keep a
close eye on Bill Ford to make sure he lives up to his fuel economy
promises, in particular. EPA will have the chance to measure Ford’s success
when the company unveils its high mileage Escape, due in 2003. For The
Great Lakes Radio Consortium, I’m Julie Halpert.