(Adds Bill Ford reaction to Sierra Club, paragraphs 12-18)
By Tom Brown
DETROIT, Aug 20 (Reuters) - An effort by Ford Motor Co. to burnish its environmental image has backfired, with the automaker admitting it has made little recent progress toward improving the fuel economy of its vehicles.
In an annual report released on Tuesday, the world's No. 2 automaker highlights various initiatives it has undertaken to fight global warming, which it calls "the most pressing environmental issue facing our industry and our company."
But in the so-called "Corporate Citizenship" report, Ford concedes that the average fuel economy of the vehicles it sells in the United States has remained essentially flat since 2000.
And it admits that carbon dioxide emissions from the cars and trucks it sells in the key U.S. market have held stable since 1997, instead of decreasing in line with its commitments as an environmentally-aware "green" company.
Scientists have identified carbon dioxide from internal-combustion engines as a primary contributor to global climate change.
"This report takes a giant step in the wrong direction for Ford Motor Co., for American consumers, and for the environment," Carl Pope, executive director of the Sierra Club environmental group, said in a statement.
Ford Chairman and Chief Executive Bill Ford Jr., the great-grandson of automotive pioneer Henry Ford, has long sought to distinguish himself as more environmentally committed than his rivals. And Tuesday's report reiterates his previously stated goal of improving the fuel economy of Ford's gas-thirsty sport utility vehicles by 25 percent between 2000 and 2005.
But the report also warns that any further goals for cutting greenhouse gas emissions "will be tempered by our near-term business realities." The automaker, which lost $5.45 billion last year, is struggling to cut billions of dollars in costs as part of a multiyear turnaround plan.
The Sierra Club takes Ford and other Detroit automakers to task for failing to use modern technology to boost the fuel efficiency of standard model vehicles.
Such technology would add to vehicle production costs at a time when U.S. automakers are saddled with razor-thin profit margins amid growing fears about consumer spending.
GLOSSING OVER FAILURE
"Americans want responsibility and transparency from Ford, instead of a slick PR document that glosses over their disappointing failure to produce cars and trucks that go further on a gallon of gas," Pope said.
Bill Ford, who has shocked auto industry insiders with his candid talk about environmental issues in the past, said he was not at all happy about the Sierra Club's criticism.
"I'm disappointed personally because I feel like I have gone out on a limb environmentally and taken some criticism for it over the years," Ford told Detroit's WWJ-AM radio station.
"In some ways it sort of feels like biting the hand that feeds you," he added.
Ford lists the Sierra Club among several environmental groups, including Greenpeace, that it provided support to last year.
Despite adverse business conditions, Bill Ford notes in a statement introducing the "Corporate Citizenship" report that his company's donations to projects focused on the environment, education and community development reached an all-time high of $139 million in 2001.
"It's not helpful to just sort of sit on the sidelines and lob bombs," Bill Ford said in the radio interview early on Tuesday.
"If you want to be constructive, come in and have a dialogue and help us figure this out," he added, alluding to some of the difficulties involved in trying to build greener vehicles while shoring up his company's bottom line.