Bill Ford's Failed Hybrid Revolution

In an annual report released in July, the EPA said the industry-wide fuel economy of 2006 model-year vehicles was 21 miles per gallon. Honda led all major carmakers with an average of 24.2 mpg—and Ford Motor Co, at 19.7 miles per gallon, moved up one slot from last place a year ago.

"We don’t produce the most gas-guzzlers" is a questionable victory cry for Ford, especially considering that Bill Ford Jr.—the Ford Motor Co.’s chairman and former chief executive—is a self-proclaimed environmentalist.

When asked if Mr. Ford deserves to be called an environmentalist, Carl Pope, executive director of the Sierra Club, told HybridCars.com, "As a human being, perhaps. As a CEO, no. I completely respect his personal beliefs and passions. He has not yet found a way to make his company live up to his values."

Promises Inside and Out

In the past six years, Bill Ford has repeatedly set big environmental goals for the company. Those goals have—for the most part—failed to materialize. Soon after taking over as chief executive in 2000, Bill Ford promised that the company would improve the fuel efficiency of their SUVs by 25 percent by 2005. The cornerstone of the plan to improve SUV efficiency was the company’s project to produce the first American hybrid and the first hybrid SUV. The Escape Hybrid, which Ford began developing in 1998, languished for nearly six years before finally reaching the market. According to the New York Times, Mr. Ford had to fight with marketing officials who argued that there was no point spending much money on a vehicle that generated sales of only 20,000 units a year, despite its symbolism as the first hybrid from an American car company.

It’s as if Mr. Ford, in moments of solitude, set his mind to steering the company in a new direction but failed to get managers and employees to make his vision a reality.

Which Way is Forward?

The exact scenario repeated itself when Ford announced his "Way Forward" restructuring plan. In addition to shedding 30,000 jobs, the plan established a new and much-trumpeted environmental goal: to build 250,000 hybrids a year by 2010. With gas prices on the rise, maybe this new goal would stick. During the 2006 Super Bowl—days after the plan was announced—the company debuted its new Escape Hybrid television commercial, in which Kermit the Frog proclaimed, "I guess it’s easy to be green." Time Magazine’s cover story on the new plan said of Bill Ford, "He will gamble that saving the planet from the car industry is the biggest long-term priority of all, so he will pour billions of dollars into eco-friendly factories and cars."

Did the new goal stick? Hardly. Five months later, Bill Ford reversed direction again by abandoning the hybrid commitment, and deciding instead to focus on flex-fuel vehicles. He said, "This is in no way a lack of commitment to hybrids. It’s an expansion of our commitment to other technologies." Daniel Becker, director of the Sierra Club’s global warming program, said the company was "rapidly becoming the automaker that cried wolf."

While Ford has abandoned its plans to sell 250,000 hybrids by the end of the decade, Toyota appears to be on track to deliver on its own goal for 2010 of selling one million hybrids globally. Ford is apparently maintaining its plans for hybrid versions of the Ford Five Hundred, Mercury Montego, Ford Edge and Lincoln MKX to debut between 2008 and 2010, in addition to previously scheduled hybrid options for the Ford Fusion and Mercury Milan. Considering the lack of a commitment to any sales goals for the new hybrids, the lack of available of high-percentage ethanol blends for flex-fuel vehicles, and the Ford Co.’s low EPA rankings for efficiency, the company is hardly racing toward the the planet-saving vision outline by Mr. Ford.

Getting Harder All the Time

In Micheline Maynard’s New York Times article on Bill Ford (Is Ford Running on Empty, 7/16/2006), she wrote: "Had Mr. Ford produced more fuel-efficient vehicles like hybrids sooner, he not only would have found his company keeping pace with nimble foreign competitors like Toyota when oil prices spiked, but he would also have been able to illustrate the bottom-line merit of his environmental values. Instead, Ford, is again in the all-too-familiar spot of playing corporate catch-up."

With each new promise from Bill Ford, there’s new hope. With each commitment broken, it seems less likely that the Ford Motor Co. will re-invent itself to face the environmental, political, and business challenges of the 21st-century auto industry.