In 2000, Ford Motor Company (F – $5.92) sponsored Time Magazine‘s Earth Day edition, Heroes for the Planet, and issued a statement declaring that it would henceforth spend as much on its environmental image as it would promoting a new model car. Ford also promised to reduce emissions.
That same year, Ford debuted its Excursion, a sport-utility vehicle (SUV) rated at a meager 13 miles per gallon (mpg) at a time when most vehicles were getting 20.
To burnish its new, green image, Ford hired former environmentalist-turned-consultant Paul Gilding, of Ecos, an environmental-spin firm. One year later, Ford embellished its annual report with a Corporate Citizenship Report and voluntarily admitted releasing 400 million metric tons of carbon dioxide – more than 1 percent of worldwide emissions.
This attempt at honesty earned them kudos in corporate camps but a resounding thumbs down from some environmental groups. Organizations like the Audubon Society and Conservation International accepted mega-donations to the tune of $30 million dollars, paving the way for further "strategic bridging," or the alliance between corporations and environmentalists also known as "The Great Green Sellout."
According to the Union of Concerned Scientists (UCS), 2000 Ford vehicles overall had both the highest emissions ratings and the worst fuel efficiency of any cars on the road. In 2005, in an effort to reduce emissions, shareholders demanded that top executives’ salaries be tied to reducing fuel use. Ford chose instead to tie executive pay to peer groups, and in 2006 Alan Mulally made $39 million for his four-month stint as Ford’s new CEO. That same year, Ford America’s President Mark Fields got almost $11 million and CFO Don Leclair netted a tidy $8 million. Bill Ford himself graciously declined a salary but still made $10.5 million on stock-related items.
Fuel efficiency did not improve appreciably either. In 2007, the UCS called Ford "the best of the worst," ranked it third from the bottom, and observed that the company could have tied for third best if it had achieved European Union emissions cuts in the U.S. as well.
Only the 2007 Focus station wagon, the Ranger pickup, and the Escape Hybrid SUV topped the list in their classes. The Escape, a curious marriage of inefficient vehicle-type (SUVs) with fuel-efficient hybrid technology, is typical of Ford’s environmental backpedaling. The 2008 Focus is rated better, at 35 mpg., but this only applies if you drive 60 miles per hour or less. As one blogger recently pointed out, driving an American hybrid is not saving the planet; the average German car gets 40 miles per gallon. In fact, the European Focus gets better mileage than its American counterpart.
In 2004, environmental groups targeted CEO Bill Ford for breaking his 2000 pledge to increase fuel efficiency. Ford, who personally lobbied Congress to prevent upping national fuel mileage standards, made a 2003 promise to the group – led by Bluewater Network of San Francisco – that he would voluntarily improve the standards without government intervention. When he failed to do so, they ran ads showing Ford with a Pinocchio-like nose and warning consumers not to buy Ford’s environmental rhetoric or his cars. The company responded by threatening to sue.
In 2006, Ralph Nader’s Public Citizen group asked the Federal Trade Commission (FTC) to sanction Ford for advertising its flexible-fuel vehicles (FFVs) in states that had few, if any, ethanol (E-85) fueling stations. Moreover, consumers reported that the 2003-2005 Taurus and Sable, both listed as FFVs, did not run reliably on ethanol, even though Ford used them to qualify for credits against its Corporate Average Fuel Economy, or CAFE, enforced by the National Highway Traffic Safety Administration, or NHTSA, and monitored by the Environmental Protection Agency, or EPA.
CAFE is the federally mandated fuel-economy average for a car company’s entire fleet of cars and light trucks. Flexible-fuel vehicles qualify for credit, not on their ability to run on ethanol, but on the assumption that half their fuel will come from ethanol. In the real world, and most states, this didn’t happen because the ratio of available gasoline to ethanol in 2005 was 94 to 4 (in billions of gallons), rendering Ford’s FFV declarations false from both a reporting and an advertising standpoint.
In 2008, Ford plans to unveil its new Explorer, a crossover SUV whose innovative frame reportedly improves both fuel efficiency and safety. The Explorer was a winner when first introduced in 2000, and sold more than 445,000 units. By 2007, the Explorer’s 17-mpg rating had depressed sales by 33 percent. Reviving the Explorer, however, looks more like nostalgia than good business sense, since Ford plans to market similar crossovers under the names Edge, Freestyle, and Fairlane Concept (another trip down memory lane). This shift in production and marketing is apparently Ford’s knee-jerk response to its failed self-imposed goal of selling 250,000 hybrids by 2010.
If you can’t win, quit.
Ford’s 500-acre, 50-home Superfund cleanup site in Ringwood Borough, Passaic County, New Jersey, is another huge mark against the company’s environmental image. The site, which closed in 1994 and reopened again in 2006 after the discovery of additional tons of paint-sludge waste, also contains large amounts of arsenic. Ringwood residents and the Ramapough Mountain Tribe of Native Americans have filed suit. Ford officials refused interviews and issued a statement typical of corporations caught red-handed, pointing the finger at former iron mining operations in the area. Other investigators dispute this allegation and insist that the levels of arsenic in the paint sludge are higher than Ford has admitted.
Ford says it continues to make SUVs because Americans want, and continue to buy, them. Bill Ford himself seems like a nice guy. Too bad he never learned to say no to bad policies and even worse corporate policy makers, who instigated the ad campaigns that drove Americans to buy SUVs as a status symbol in the first place. Unfortunately, the only way to break an addiction is by going "cold turkey," and that turkey is already coming down the road in the form of astronomical gas prices and Peak Oil.
There are a number of well-known acronyms based on the Ford name, and many have entered the realm of American idiom. Two that come to mind are Fixed-or-Repaired-Daily and Found-on the- Road-Dead. Now I’d like to add my own: Forgotten-or-Reneged-Deals.
Disclosure: I don’t own Ford stock.