Ford S.U.V.'s Use More Gas Than Before

Article taken from the NY Times, July 19, 2003

DEARBORN, Mich., July 18 - The average fuel economy of the Ford Motor Company's sport utility vehicles will be worse for the 2003 model year than the previous year, the company said in a report issued on Thursday.
Earlier this year, the company said it could not meet a pledge to raise the fuel economy of its sport utility vehicles by 25 percent from 2000 to 2005. But the report indicates that Ford is actually moving backward on fuel economy in its sport utility vehicles.
In the 2002 model year, the company's sport utility vehicles were 8.4 percent more efficient than the ones the company made in the 2000 model year. But those produced this year are only 5.2 percent more efficient than those made in the 2000 model year, according to the company's corporate citizenship report.
The report pointed to declining fuel economy in the company's Land Rover division and declining sales of its small S.U.V., the Escape. It also said fuel economy had been worsened by the introduction of the Lincoln Aviator, a luxury S.U.V. only slightly smaller than the burly Navigator.
"We were not able to make the investments in the products and technologies needed to meet the goal, nor were some of the technologies as mature as we thought," William Clay Ford Jr., Ford's chairman and chief executive, said in a letter included in the report.
"But I do reaffirm our commitment to continue to work toward improving the fuel economy of our S.U.V.'s and, indeed, to cutting greenhouse gas emissions across our entire range of vehicles," he said.
The shortfalls in S.U.V. performance were reported today by The Detroit Free Press.
"They're going backward, not forward, at a time when Americans are acutely aware of the consequences of gas guzzling," said Daniel Becker, a global warming expert at the Sierra Club, a major environmental organization.
David Friedman, a senior policy analyst at the Union of Concerned Scientists, said: "They were gambling on a market shift to smaller S.U.V.'s instead of putting technology to work to make their mainstream products do better. Instead, their mainstream products did worse."
Three years ago, Ford's pledge was widely reported and helped burnish the green reputation of Mr. Ford, who was then the company's chairman and had yet to become its chief executive. General Motors and the Chrysler Group of DaimlerChrysler responded by saying their S.U.V. fuel economy improvements would at least match Ford's, raising the hopes of environmentalists.
But booming sales of S.U.V.'s depressed the fuel economy of the average new vehicle sold in the United States to a 22-year low in the 2002 model year, the most recent year for which complete figures are available. Since Ford backed away from its pledge earlier this year, G.M. and Chrysler have reiterated that they only said they would at least match Ford's performance, not its promise.
"Not only have they reneged on that commitment but they're doing even worse this year than last year," Mr. Becker, from the Sierra Club, said of Ford.
Environmental concerns appeared to be low on the priority list as the company opened labor talks at its Dearborn headquarters today. The Big Three's market share is dwindling and profits are faltering as foreign competitors like Toyota and Honda take more of the United States market.
For Ford, a top priority will be getting the United Automobile Workers to accept four plant closings in the United States laid out in the company's turnaround plan, including a plant in Edison, N.J., that produces the Ranger pickup.
"We will need to get the U.A.W. to understand and agree to close the plants we identified," Dennis J. Cirbes, Ford's vice president for labor affairs, said at a news conference.
The company, which lost $6.4 billion in 2001 and 2002, returned to profitability in the first half of this year. But Ford officials said on Tuesday that they expected profits to be flat in the second half of the year.
Nicholas V. Scheele, the company's chief operating officer, wrote in an e-mail message to its white-collar workers today that the costs of its salaried work force in automotive operations would need to be cut by 10 percent. He said the cuts would be made through hiring freezes, attrition and less overtime.
"However, where these actions cannot fully meet the targets, we will have to reduce our salaried personnel structure to address the balance," he added in his message. Ford spokesmen declined to say how many jobs might be cut. The company has about 79,000 salaried workers in worldwide automotive operations.
"We still face uncertain economies around the globe and a fiercely competitive marketplace," Mr. Scheele said in his e-mail message.
U.A.W. leaders have said the preservation of health care benefits is a top priority as costs skyrocket. But analysts and labor experts believe the union will give some ground on other issues. The current contract expires in mid-September.
Mr. Ford, a great-grandson of Henry Ford, the company's founder, has often been outspoken on issues like global warming, at least by Detroit standards. But he has also been sharply criticized by environmentalists for not making much progress since becoming chief executive in 2001.
"We can't contribute to a socially, environmentally and economically sound future if we are not successful in executing the basics of our business - providing desirable, high-quality, affordable products to our customers and doing so profitably," Mr. Ford said in his letter, adding, "the first line of corporate citizenship is being a responsible employer to the 350,000 people who work at Ford."






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