By: Clint Wilder
Speaking among the Hollywood glitz and glamour at the Lifestyles of Health and Sustainability (LOHAS) conference last month in Los Angeles -- where fellow speakers included actors Ed Begley Jr., Mariel Hemingway, and Raquel Welch -- Ford hybrid and hydrogen vehicle executives talked a good game. More importantly, they provided solid evidence that the number-two U.S. automaker may finally be delivering on its long-made, often-unfulfilled promises for cleaner cars and trucks. To skeptical observers, chairman William Clay Ford Jr.'s rhetoric of environmental responsibility has rung hollow against Ford's aggressive marketing of some of the most gas-hungry SUVs on the market, especially the Expedition and the Excursion (the latter dubbed by environmentalists as the "Ford Valdez"). Mary Ann Wright, Ford's first director of sustainable mobility technologies, candidly admits the company's past mistakes, particularly the multiple delays before bringing the company's first hybrid, the Escape SUV, to market last year. "We've got to get better," she says. "I'm not going to hide behind the line 'That [the large SUV] is what our customers want.' We have to balance that with our environmental responsibility as a company. Climate change is here, we aren't denying it, and we've got to take action." That's refreshing to hear. "Just giving our customers what they want" has been an annoying rationalization from auto industry players for years, as if they had no influence whatever in shaping customer preferences and behavior. So much for innovation, forward- looking vision, leadership and other qualities that great global companies are supposed to exhibit. Ford says it's trying to take a greener path in the most challenging times in years for automakers, especially Ford and General Motors. Record gas prices, swollen inventories, and the lead of Toyota and Honda in the emerging hybrids market have left Ford and GM looking increasingly like yesterday's news. In first-quarter financial results released last month, GM posted its biggest quarterly loss in 13 years ($1.1 billion) and Ford reported a 38% drop in profit. Wright clearly takes the issues of reducing oil consumption and greenhouse gas production seriously, but what about the execs at Ford's highest levels? "It doesn't happen overnight, but the reality is that senior management is starting to get it," says Wright. "The Escape hybrid -- getting it to market and seeing strong sales -- has been a real awakening for the company." At the other end of the fuel-consumption spectrum, chairman Bill Ford has publicly admitted that gas prices have hurt large SUV sales much faster than the company expected. Throughout the industry, a Toyota Prius marketing rep told me at the LOHAS conference, conventional wisdom was that it would take $4-a-gallon gas prices to significantly change customer vehicle buying patterns in the U.S. Everyone is surprised that it's starting to happen as prices flirt with $3 a gallon. We talk often at Clean Edge about a tipping point for clean energy technologies, and it appears that hybrids have reached it. The record 13,000 Lexus customers who pre- ordered the hybrid RX 400h SUV are just now starting to drive them home from dealers. The Honda Accord hybrid has just hit the market as well. Toyota's first-quarter Prius sales more than doubled, year over year, to 22,880. Ford plans to significantly ramp up Escape hybrid production from this year's 20,000 units, with four more hybrid models coming in the next three years -- the Mercury Mariner, Mazda Tribute, Ford Fusion, and Mercury Milan. And it has a 100,000-unit production target for the partial-zero emissions (PZEV) Ford Focus. Ford is also moving forward in R&D for hydrogen-powered vehicles, including a hydrogen internal combustion engine (dubbed "H2ICE") as a bridge technology while fuel cell cars are perfected. The company featured an H2ICE-powered, 10-cylinder shuttle bus among its demo vehicles at LOHAS; 100 of them will be in trial commercial use in Florida next year. Ford's attitude on hydrogen seems less rosy-colored and more realistic than GM's, which has pledged to develop a cost-competitive fuel-cell vehicle, assuming high production volumes, by 2010. "This is not a moon shot, it's a Mars shot," counters Vance Zanardelli, Ford's chief engineer of hydrogen internal combustion R&D. "It's a long ways off, but the promise is so good that we want to do everything we can to make it happen." Zanardelli and Wright don't underestimate the huge challenges of hydrogen production, transportation, storage, codes and standards development, and infrastructure. Wright says mass commercialization of hydrogen vehicles is 25 to 30 years away. Ford doesn't walk its green talk in every way, still choosing to fight many government efforts on climate change. Ford is part of the auto industry's lawsuit to stop a new California law that would require greenhouse-gas (GHG) emissions reductions for vehicles sold in the state. Wright says the company prefers a national policy approach rather than state-by-state. That sounds good in theory, but it's unrealistic with a Bush administration and Republican-controlled Congress that seem to believe we can drill, refine, mine, and construct (nuclear plants) our way to a new energy future, with only a nod of support for cleaner, more efficient technologies and GHG reductions. It's imperative that influential states -- notably California, the world's sixth-largest economy -- step into the leadership void. But Ford is far from the only company whose legal and government affairs activities seem at odds with its development efforts. Wright also notes that hybrids, cleaner-diesel vehicles, and eventually hydrogen cars won't solve anything unless buyers can afford them. The "sustainability surcharge" is a huge barrier toward broad mainstream acceptance of clean technology, whether it be green power, organic food, or hybrid cars. Singer Rickie Lee Jones, who entertained at the LOHAS conference, said she balked at paying 20% more to have a new house built green. "I'm not sure what I'm sustaining," she joked, "besides someone else's bank balance." It's a lesson that Ford, at least in its latest strategy, seems to understand. Wilder is Clean Edge's contributing editor. E-mail him at wilder[at]cleanedge[dot]com.