You Need Green to be Green

Who'd have thought the two biggest players in the U.S. auto industry would be at odds with the White House over global warming — with the automakers competing to get ahead of the environmental curve and the Bush Administration moving in quite the opposite direction?

It wasn't that long ago that the auto industry fought increasingly stricter federal tailpipe emissions and fuel economy mandates with all of the lobbying and financial clout it could muster.

But suddenly there has been a paradigm shift that finds Ford Motor Co. and General Motors Corp. competing to come up with cleaner, higher-mileage vehicles — the very targets they've opposed so vigorously for more than 25 years.

My, how times change.

Don't jump to conclusions, though. Ford and GM aren't in business to lose money by jumping to Sierra Club's every whim. In the end, a “business case” — read that a profit — must be made. In essence, you've got to have green to be green.

Ford, led by Chairman William Clay Ford Jr., has staked out green — the environmental variety — as a solemn calling, prompting a glowing six-page Time magazine article in mid-May. A few days later, however, the Wall Street Journal questioned how serious Ford, the company, really is about taming emissions and boosting fuel economy. Ford hasn't specifically said how it'll reduce carbon dioxide emissions and continues to lobby against changes in corporate average fuel economy (CAFE), which has remained the same since 1978, WSJ underscores. A company's passenger-car fleet must maintain CAFE of 27.5 mpg (8.6 L/100 km), but automakers' light truck fleets — now claiming half of the total market — only have to meet a CAFE requirement of 20.7 mpg (11.4 L/100 km).

There's a bill in the Senate, however, that would require trucks to meet the same level as cars.

It may be the right thing for Ford to do for its customers and the nations where it operates. But the company's most visible moves to date suggest that Ford is equally committed to protecting its commanding lead in the SUV market.

Since last July, Ford has insisted it will increase light-truck fuel economy 25% by 2004 and make gains as well in reducing emissions. That's commendable, but it's also obviously designed to ward off a federal CAFE mandate.

GM pooh-poohed Ford's original announcement, arguing it already was the mileage leader and would match Ford's 25% in the same time frame. Then in May, GM took off the gloves and unveiled a variety of technologies that it says will keep it ahead of Ford (see story, p.25).

Call it enlightened self-interest, but to see these two big rivals fighting for bragging rights on the mileage front is stunning.

Meanwhile, Mr. Bush in March rejected U.S. participation in the 1997 Kyoto Treaty calling for industrialized nations to reduce carbon dioxide (“greenhouse gas”) levels 7% under 1990 levels by 2012.

The treaty still can become effective if nations responsible for 55% of the emissions ratify, but because the U.S. produces 25% of that number, it doesn't stand much chance of becoming realized without American participation.

Mr. Ford reportedly supports the Kyoto Treaty.

For his part, the President says he's against the Kyoto plan because it's not in the “economic best interest” of the U.S. and unfair to boot, since it exempts developing nations.

When the administration unveiled its proposed energy policy in mid-May, there was little in it offering much hope for an early solution to global warming issues. Indeed, critics say it takes a backward step in protecting the environment.

Vice President Richard Cheney, the policy's architect and, like Mr. Bush, a former Texas oil man, cleverly moved to offset criticism and win support from union leaders — traditionally in the pocket of his Democratic Party adversaries — by holding out the promise it will create thousands of jobs.

Especially appealing to labor leaders is the prospect of developing oil and gas production in Alaska's Arctic Wildlife Refuge, a move staunchly opposed by environmentalists and Democrats.

Surprisingly, in view of soaring gasoline prices, the administration killed the eight-year drive, championed by Al Gore, to produce a midsize “supercar” getting 80 mpg (2.9 L/100 km) by 2004.

Government and automaker researchers had made major strides, but high costs remained a tough barrier. Critics long had argued that primarily taxpayers, instead of automakers, were paying for the program. Total investment has reached $1.2 billion.

DOE Secretary Spencer Abraham argues that investments in longer-term advanced technologies now have a higher priority.

To encourage energy efficiency, the new Bush energy policy calls for tax breaks to buyers of higher-mileage vehicles such as hybrids that combine electric and combustion-engine power. Right now, only two cars sold in the U.S., the Toyota Prius and Honda Insight, offer hybrid power. Ford, GM and DaimlerChrysler AG expect to offer hybrids within a few years.

Automakers worldwide are working on vehicles featuring hydrogen-powered fuel cells, which emit only water. However, few doubt such vehicles will become available in volume until around 2010.

So far, no one has the pole position in that race, but green stuff by the billions is on the line.