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Can Ford Motors Deliver on its Sustainability Promises?

Steve Puma | Monday October 26th, 2009 | 7 Comments

Ford Motor Company may not be the first name that comes to mind when you think about large corporations that are committed to sustainability. After all, the company is one of the oldest and largest industrial corporations around, and produces many of the large SUVs and trucks that are at the center of the current climate controversy. So it may be surprising for some to learn that the company actually has a very extensive sustainability strategy in the works.

Several pieces of this strategy were unveiled in San Francisco last Thursday, at an event entitled Inside Ford’s Electrification Strategy. Ford’s newly-titled Director of Global Electrification, Nancy Gioia, explained how the company is not only planning to build battery-electric (BEV) and plug-in hybrid electric (PHEV) vehicles, but is also working on strategies to build the infrastructure that will support those vehicles. Attendees at the event were also invited to test-drive two news Ford vehicles, the Escape PHEV and the Focus BEV. While my fellow 3P colleague, Mary Catherine O’Connor, will be posting an in-depth look at Ford’s electrification strategy itself, I would like to talk about the company’s overall strategy.

How well Ford Motors’ actions measure up to the statements that the company has made is something that remains to be seen. Some commitments made by the company were only made after pressure was applied by shareholders. As it has been said, the proof of the pudding is in the tasting. However, the company has made some notable past efforts in greening its operations, led by current Chairman of the Board, and former CEO, Bill Ford.

Leading the Charge
Mr. Ford, Great-Grandson of founder Henry Ford is known to be an environmentalist, and has made several attempts in the past to move the company in a more sustainable direction, some very successful, and some dismal failures. His major success was the transformation of the River Rouge plant from a polluted industrial brownfield site into a model of green design, complete with green roof. Failures include canceling the company’s electric vehicle program, and the inability of the company to keep to its 2000 commitment to increase fleet gas mileage by 25% by 2010.

What is interesting about these failures is that the company cited market conditions as the main cause. As long as the consumers were demanding larger vehicles, the company needed to provide them, in order to remain in business. Ironically, it was rapidly changing consumer demand that almost put the company out of business, as the economy, rising gas prices and concern about climate change caused buyers to flee SUVs in favor of smaller cars and hybrids.

Huge corporations are not known for their ability to turn on a dime, they are more like Titanics on a competitive ocean, their rudder (leadership) too ineffective to avoid the oncoming iceberg. Perhaps this kind of disaster is the only thing that would allow such an entrenched company to make the necessary changes.

Ford’s Sustainability Strategy
So what, exactly, is the company’s strategy? According to Ford’s Director of Sustainability John J. Viera, the company is not banking on any one technology to solve the various challenges of emissions and oil dependency. Instead, it plans to introduce vehicles which run on a number of different fuels, and employ different technologies in different situations, appropriate to the situation. In addition, the company will become more involved in the fuel delivery process, as in the case of electricity and biofuels.

This was very evident while I was riding in the new Ford Focus BEV, accompanied by a Ford engineer and several of my media colleagues. The vehicle, a prototype of one scheduled to be released in the US in 2011, has a current range of approximately 80 miles, with the production model slated to have about a 100 mile range. During our ride, the engineer explained that Ford did not intend for the BEV Focus to be a car that would be driven by everyone, but would mostly be marketed as a second car or commuter car for those with commutes in the appropriate range. For longer trips, a PHEV is more appropriate.

Diversifying the Portfolio
Ford is also putting it’s money on vehicles that can run on several different types of fuels, also known as “Flex-Fuel” vehicles. These cars and trucks can use Ethanol as well as gasoline. (There are even rumors of a flex-fuel hybrid.) Another type of multiple-fuel vehicle being planned is one that has multiple fuel tanks, such as a propane and gasoline combination. In addition, the company is moving into biodiesel, and will be offering a B20 biodiesel-capable engine for its 2011 F-series trucks.

Although Clean Diesel vehicles are already being produced in Europe, the cost to bring this technology to the U.S. is currently prohibitive, but, according to Motor Trend, the company is planning on being able to offer a clean diesel engine for larger vehicles, such as the F-150 and Expedition, by 2020. This could potentially result in clean diesel technology ending up on other Ford vehicles.

By introducing an assortment of vehicles, with different types of engine running on a number of fuels, the company hopes to diversify the current U.S. portfolio of vehicles away from gasoline. By having a large number of technologies at it’s disposal and readying its worldwide operations to switch technologies quickly, “Ford anticipates it will be ready to leverage the right vehicle fuel and energy sources when and where they are needed in the future (EcoTuesday.com)“. Like diversifying a stock portfolio, this strategy would reduce the risks of dependency on oil, in addition to reducing overall greenhouse emissions.

Will the Real Ford Please Stand Up?
Speaking to the various Ford representatives, and listening to their presentations, you do get the sense that at least some of Ford’s management are very well-versed in the language of sustainability, and the strategies that they are outlining appear to be sound and well thought out. If these could be implemented in toto, it seems likely that they would work.

However, it does appear that a healthy dose of skepticism is still in order. Ford’s short-term strategy for boosting fuel efficiency is something called “EcoBoost”, which essentially uses smaller, turbo-boosted engines to replace larger engines, something that SAAB has been doing for years. I have to admit, when I first heard about this, I had that same icky feeling that I had when SAAB attempted to pass off turbo-boosting their engines as “recycling”. The catchy, too-green, name, and too-good-to-be-true claims have a faint smell of greenwashing about them; this Wall Street Journal article clearly shows that Ford is likely overstating the fuel economy benefits of turbos.

Perhaps the EcoBoost thing is simply a misstep by a company trying to do anything it can to survive. I really do hope that Ford ends up proving me wrong, for everyone’s sake. A company of this size and influence is in a position to make a huge difference in the multiple fights against climate change and oil dependency. All that is needed is for the company to take its sustainability strategy seriously and to empower good people like the ones I met on Thursday.

What do you think, is Ford going to come through on its sustainability promises?

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Steve Puma is a sustainability and personal technology consultant. He currently writes for 3p as well as on his personal blog, ThePumaBlog.com, about the intersection of sustainability, technology, innovation, and the future. Steve holds an MBA in Sustainable Management from the Presidio School of Management and a BA in Computer Science from Rutgers University. You can contact Steve through email or LinkedIn, or follow him on twitter.


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  • Fred

    I wouldn’t be so quick as to ignore Ford as the next innovative company in sustainability. They’ve been working with Ballard for years to produce a viable fuel cell powered car. They also weren’t holding their hand out for stimulus money during the economic crisis, as they had the fore thought to restructure their company prior to the crisis.

    • kenton dunbar

      Very very difficult to believe or have faith in anything any of these car co auto execs have to say; remember all of these guys could have installed catalytic converters (an extremely minor, superficial and cosmetic, shall we say, adjustment, admittedly) way back in the 50s! Until I see the action I stay with Jack Doyle, “Taken for a Ride: Detroit’s Big Three and the Politics of Pollution”

      • Fred

        And yet, despite your and Jack’s comments, Ford produced the most efficient hybrid that’s currently available. Yeah, Ford is so environmentally challenged, aren’t they?

      • http://www.thepumablog.com Steve Puma

        I think that this points to a much bigger systemic problem with modern business and economics.

        Modern economics makes the assumption that natural resources are essentially infinite, and that human labor is scarce. This is based on the conditions over a hundred years ago, when these statements were essentially true.

        When you combine this assumption with the notion that quarterly profits are paramount, and shareholder value takes precedence over societal value, you have a recipe for disaster.

        The assumption that natural resources are infinitely abundant leads the the mis-pricing of everything, which, in turn, skews every economic incentive against the environment.

        If everything was priced under the assumption that raw materials are scarce and limited (including ALL ecosystem services), then market forces should work to make sure that those resources are preserved.

        In the absence of this sort of ecological economics, businesses will make choices that do not favor the environment. Short-term decision making only aggravates this behavior.

        A level playing field is the final nail in the coffin. One company cannot hope to survive if its competitors can compete on price, when the quality is the same. Given the business climate at the time that catalytic converters were discovered, it is easy to see that the only way that would get put on Ford cars is if ALL their competitors did the same. Doing so for purely environmental purposes would not have sold more cars, at that time, so they didn’t do it.

        The current business climate is much different…

        Steve

    • http://www.thepumablog.com Steve Puma

      Thank you for your comments.

      I am in no way dismissing Ford and its attempts at making sustainable products. As a matter of fact, I think the company is doing quite well, compared to some of their competitors.

      I am merely pointing out the mixed signals that the company is sending, and I think this is indicative of the sheer size and unwieldiness of an old, large, industrial corporation.

      I think that Ford should be commended for the things that it HAS accomplished, and I sincerely hope that Bill Ford’s voice is more strongly heard.

      If nothing else, becoming more sustainable will probably save the company from the slow, painful death that surely awaits GM if they don’t do the same.

      Steve

  • TITI Direct's Blog

    rising gas prices and concern about climate change caused buyers to flee SUVs in favor of smaller cars and hybrids.

  • TITI Direct's Blog

    rising gas prices and concern about climate change caused buyers to flee SUVs in favor of smaller cars and hybrids.

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