Ford admits SUVs fall short of environment goals
Date: 12-May-00
Country: USA
Author: Todd Nissen
Ford, in a wide-ranging, 98-page corporate citizenship report, said its market
leadership in sport utility vehicles (SUVs), the most profitable group of
vehicles Ford sells, has created a dilemma for the company as it works to be at
the forefront of improving fuel economy and cutting emissions.
"There are very real conflicts between Ford's current business practices,
consumer choices and emerging views of sustainability," Ford said in the report,
released at its annual shareholders' meeting at the Atlanta zoo.
Ford Chairman William Clay Ford Jr., an avid environmentalist and great-grandson
of founder Henry Ford, has made social and environmental responsibility a key
tenet of his company philosophy.
But sport utilities and other light trucks, which typically are less
fuel-efficient than cars and are allowed to pollute more than cars, have surged
in popularity in the last 10 years as consumers seek more utility and
functionality. Some analysts expect trucks this year to account for more than
half of all light vehicle sales for the first time.
Ford's truck and SUV sales and offerings have also boomed, making its North
American operations the backbone of its worldwide profits. The company now has
six SUVs models, including the new Escape due out this fall, up from two in 1990.
The Ford Explorer is the best-selling SUV on the U.S. market, and the F-Series
full-size pickup truck has been the best-selling vehicle in the United States for
almost 20 years.
One of Ford's SUVs is the massive Excursion. The largest SUV on the market, the
Excursion gets 10-18 miles per gallon (mpg) and has become a target of
environmental groups critical of Ford's offerings.
At last year's annual meeting, William Ford defended vehicles like the Excursion
as responding to customer demands, and doing so in an environmentally responsible
way by slashing their emissions. Ford also said the company could make small cars
that get 80 mpg, but if customers do not buy them, they do not help the
environment or the automaker.
At the meeting Thursday - where Ford's top executives sat behind a
bamboo-bordered dais - William Ford told shareholders that being socially
responsible is a competitive advantage.
Although the automaker is taking a risk by publishing a report that airs opposing
views - including a stinging report from the Sierra Club environmental group -
Ford said it is necessary to show the company is serious about its goals.
"It's all about becoming a transparent corporation and letting others see what we
do," he said.
The Sierra Club, in a response Thursday, said it looks forward to working with
Ford on improving fuel efficiency.
"While it isn't quite the fall of the Berlin Wall, we applaud Ford's recognition
of the environmental and safety problems posed by SUVs and its commitment to
improve the fuel economy of its products," said Daniel Becker, director of the
Sierra Club's Global Warming and Energy Programme.
In its citizenship report, the automaker said its SUVs are a response to
consumers, in particular Baby Boomers, who want the vehicles' versatility. Ford
also said if it did not meet that demand, other competitors would, depriving Ford
of profits. "This in turn would make it more difficult to generate the financial
resources necessary to invest in research and development of new technology and
products," the report said.
Ford said it has implemented short-term measures, including making all of its
light trucks low-emission vehicles. In the longer term, however, Ford said, it
faces the challenge of developing new technologies that meet its environmental
and economic goals.
At the meeting, Ford shareholders rejected several shareholder proposals calling
for more disclosure and representation by more than 96 percent. But one measure,
to put independent directors on key committees, failed by 84 percent.
