bill ford on the future of transportation and how no one is at the wheel

Tuesday night, after work, I went to hear Bill Ford, the great grandson of Henry Ford, and current Chairman of the Ford Motor Company, speak at the University of Michigan on the subject of sustainability. I wasn’t, for the most part, blown away by what he had to say, but, then again, I didn’t go in expecting much. My take on Ford, rightly or wrongly, is that he got into the family business as an environmentalist, got beaten down to a small nubbin’ over 30 years, ultimately gave up and stepped down as CEO, and now does a fairly good job of toeing the company line. So, he was at the University of Michigan talking about the historic reclamation of the Ford Rouge plant, their new flex fuel product offerings, and their hybrid SUVs. He also broke a bit of news. First, he announced that the Detroit Lions game being broadcast from Ford Field this Thanksgiving would be the NFL’s first carbon neutral one. And, he announced the launch of a visionary council of advisors including Amory Lovins and Paul Hawken that would help guide Ford in the right direction. (Ford did make a funny joke. When talking about the carbon neutral game between the Lions and the Packers, he said that he didn’t know if they’d taken factored in the production of the cheese heads that would be in attendance.)

The one thing that made a big impact on me is the fact that he didn’t seem to have any more knowledge than I did as to where the industry was headed now that the oil’s running out. I don’t know what I expected, but I thought that he might have some inside scoop. Apparently not though. In talking about Ford’s push for flex-fuel vehicles, he said they made the tactical decision to invest in that area based on the content of a state-of-the-union speech in which Bush said that there was going to be a major government initiative there. He said they jumped in with both feet, thinking that something would come of it, but that very little really has. He said they knew, when they got into it, that food-based ethanol could not offer the efficiency necessary to replace oil. He said, however, that the President’s speech made them think that perhaps a much more efficient, cellulose-based ethanol was on the immediate horizon. Now several years later, it’s still not here. The impression that I got from him was that they desperately wanted someone to lead the way for them. And that brings me to the opportunity I saw.

At some point during the speech, after bemoaning the fact that no one had yet brought together leaders from government, the automotive industry, and the energy industry to discuss the future, he made an offhand comment about the University of Michigan perhaps being the kind of place where such a summit could be held. It’s something that I’ve actually thought about over the past year, and it surprised me to hear the Chairman of Ford not only being receptive to the idea, but actually voicing it himself. It’s exactly the kind of thing that the University of Michigan should be pursuing, in my opinion. It’s the biggest problem of our lifetime, and, given our proximity to Detroit, it’s only natural that UM should step in to offer leadership. I just don’t know who at the University would facilitate such a discussion. Regardless, it’s something that the University should pursue.

It was kind of a shock to hear Bill Ford, the Chairman of Ford Motor Company, admitting that he was waiting for leadership from somewhere else. I would have thought that, given who he was, he could call a meeting himself and get the heads of Exxon, Shell, GM and whoever else he wanted in a room together at the same time. But that’s clearly not the case. At some point later in the discussion, he said that he wished that we in the US could work together like the Europeans did several years ago when their corporate and governmental leaders agreed to make a transition to clean diesel. As he explained it, everyone with an vested interest got into a room together and they agreed to a direction. The governments agreed to tax gas more steeply, making diesel more competitive, and the auto companies agreed to start turning out diesel vehicles that produced less global warming pollution. He loved the idea, but he clearly didn’t know how we’d get there. I found that disconcerting… Clearly everyone is waiting for a strong leader.

(This is a good place for me to reiterate my belief that Edwards should announce that, if elected, he will place Gore in a cabinet-level position in charge of such critical initiatives, and give him the authority to set policy. If this happened, and Gore joined Edwards on the campaign trail, I have no doubt that they would win. Together, they would beat Hillary and anyone the Republicans put up against them.)

Following are some additional notes on Ford’s presentation.

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10 Comments

  1. egpenet
    Posted November 16, 2007 at 11:21 am | Permalink

    My time at Ford as an employee and as a freelancer over many years involved writing speeches (as well as writing and producing films and videos) for Bob Alexander (Chief Car Engineer), a lot of the top sales guys, including Iacocca, several chief design people, and several chairmen (Polling, Caldwell, etc.)

    Caldwell started E.I. (Employee Involvement) which gained wide acceptance among union and salaried personnel, and for which I helped design and create launch materials.

    Since “the duce” passed away and Iacocca lost interest in Ford Motor Company, Ford has been without what I would term a “national voice.” At the same time, GM lost DeLorean, the oil shocks hit, Nixon and Carter ruined the economy and the auto industry began its slide into the pits.

    Ford quality is clearly improved in major ways, but who cares? There is no magic left in the car business. And the very methodical executive career ladders built at GM and at Ford … which created a chain of great industrial leadership at both companies for two generations has been lost. Billy is protecting his family’s assets … most of whom are now second and third cousins, who expect their checks on time and not to bounce.

    We’ll have to see what Cerebrus does with Chrysler, but I have a feeling that Daimler is breathing a tremendous sigh of relief having unloaded one of the oldest workforces in American industry.

  2. Union Household
    Posted November 16, 2007 at 11:47 am | Permalink

    Of course, the only real long term answer to this national transportation dilemma is a state-of-the-art mass transit system. The auto companies have dillyed around with this (Detroit’s ‘People Mover’, for example), but have never been serious as their profits are threatened if such a thing were successful.

    There’s much to learn from Europe in this dept.
    Perhaps the day will come when a person steps into an egg-shaped capsule which can be linked up to other ‘eggs’ and wisped about the world.

    In the meantime, expect China to suck up additional sources of fossil fuels as “American” and other automobile companies tap their rapidly emerging market. This is likely to leave us scrambling for more expensive heating fuel and gasoline.

    In my opinion, the North American auto industry needs to address the needs of human ground transportation from a much broader perspective than ‘just’ automobiles. But for the time being, they can only do what they can to stay on top of a rapidly changing and ever more competitive landscape.

    John Delcamp UAW member

  3. egpenet
    Posted November 16, 2007 at 12:23 pm | Permalink

    GM usef to manufacture buses, diesel engines, locomotive engines and a LOT of mass transit machinery. Some of my former clients included GM Truck & Bus Group, Detroit Diesel/Allison, etc.

    Those were some of the FIRST industries to be moved overseas … and no one complained then. I don’t think anyone noticed.

    Ford Tractor was another client of mine, and now THAT’S gone.

    The only thing the car business is running on at the moment is “momentum” created by the Ford’s, Durand & Sloan, the Fisher Brothers and the Chrysler boys.

    As far as real innovation, creativity, out-of-the-box thinking goes in the car industry … we have no further to look than in our own backyard and the story of Mr. Tucker and his run-in with the Big 3.

    Much later on, I credit Ralph Nader with putting the genie back in the bottle by killing the Corvair.

    All downhill from there.

  4. KT
    Posted November 16, 2007 at 12:56 pm | Permalink

    We need to be taken over by Cuba.

    Someone please tell them that we’d greet them with flowers.

  5. Ol' E Cross
    Posted November 16, 2007 at 2:04 pm | Permalink

    You can’t squeeze water from a rock but you can squeeze oil from sand. I think a lot of us are counting on oil shortages to drive tech advances but there’s more left in the ground than we’ve used, thus far.

    So far, we’ve just pumped the easy oil. Wells we’ve labelled dry in the past retain 80 percent of their oil. New technology allows us to pressure out an additional 70 percent. And, now it’s cost effective to collect that oil, just like it’s cost effective to strip mine Alberta and turn soil into oil and biproduct sludge lakes. (Twenty-five percent of the energy in every barrel extracted from Alberta’s sands is used extracting the remaining 75%.)

    In short, the oil is not running out, it’s just becoming slightly more expensive and far more environmentally costly to bottle.

    I don’t see a solution that doesn’t include major government intervention, in the form of carbon taxes and massive investment in mass transit.

    I can see where Bill Ford would kind of shrug.

  6. John on Forest
    Posted November 16, 2007 at 9:22 pm | Permalink

    Ford (not the man, but the company) has been a follower for many decades. While they’ve had hits with the 1986 Taurus and later the SUV (Chrysler had the minivan.), these vehicles were not revolutionary or even particularly innovative.

    Of course, right now, Ford and GM are fighting for their very lives and a return to profitiablity. A distraction, like alternative transportation for our nation, is not something Ford has the luxury to think about right now. Perhaps in a couple years when they attain profitablity again, Ford could put some energy into such essential thinking. But don’t count on it.

    Of course, another point has to be made on this topic too: Transportation is not the real question; although it is part of the equation. Energy is the real issue. This country, and the world for that matter, needs to develop energy solutions (for heating our homes, running our factories, transporting our people and goods, and roasting marshmallows on a cloudless starlit night deep in the woods) that will sustain our economies.

    And now here comes the reality of global warming. Global warming is not an environmental problem. It is an economic problem. True, species will go extinct and habitats around the world will change; but, that’s been going on since Earth formed. Lifeforms on Earth have adapted and evolved despite the worst the Earth or extraterrestrial objects have thrown at it. But global warming is a phenomenom that will more dramatically affect humans than any other event has, since man began to walk on the earth. Coastal population centers will be covered by the ocean. Weather patterns will change, making once lush areas of the world into deserts and making other parts of the world more inhabitable by man than ever before. The most massive migration of humans ever will be the result.

    Some rich people will lose their wealth. Some rich people will become even more wealthy. Some poor people might become more wealthy; and a lot of poor people will become even poorer. Of course, these events will not be instantaineous. Global warming, and it’s effects will be a gradual process, occuring over decades.

    But, back to our regularly scheduled program: Energy. Those individuals, companies, governements, and countries who prepare for the shift in wealth and who develop sustainable energy stategies for their futures, will be the ones who succeed and become more wealthy, or wealthy for the first time in their histories.

    And those who achieve this success probably won’t even miss the Polar Bear.

  7. Union Household
    Posted November 16, 2007 at 10:30 pm | Permalink

    The Emergency Backup Winter Heating Device in my home is a 100 year old comforter stove (a glorified Franklin pot-bellie, actually) that accepts cardboard, junk mail, yard waste, newspaper, dead tree pieces, etc.
    When the “Big Blizzard” strikes down the power grid, I can retreat to it with my family and wait it out. Might only be about 30% efficient, but the warmth draws cats and people together just to enjoy or to survive as required.

  8. egpenet
    Posted November 17, 2007 at 9:38 am | Permalink

    The so-called minivan was a concept called “Taxi” and designed by Guigiaro (sp?) an Italian designer whose designs inspired car companies like renault and Ford and others. Iacocca wanted to do a minivan at Ford, but il’Duce said no, and that added to their split.

    When Leeee went to Chrysler, he “took a LOT of paper” … meaning design ideas went with him. When another Chief Designer left Ford some years later, “more paper went with him.” I estimate that Foprd lost two or threeee generations of design work to Chrysler … which tells us how Chrysler suddenly came up with all those cool concepts and Ford was left flat-footed.

    All of the attention, including the family, has been on the Ford Motor Credit arm, THAT’S where all the money is made … leasing and fleet and dealer stock financing (floor planning), and a little on retail contracts.

    THAT’s all they care about … produce enough to load up the dealer lots … collect interest from the dealers … load up employees and consumers with expensive leases and collect our family inheritance.

    Same at GM … except there’s no family to hang a hat on … just greedyexecutives who know how to keep the machine oiled and the PR staffs busy writing about impossible and improbable technologies that are “just around the corner.”

    Only thing around the corner … 2008-20012 at this point … is a recession, a few years of stagflation … higher taxes from Hillary or any other Dem. Change your oil every 3000 miles and keep what you got is my advice.

  9. Katy
    Posted November 17, 2007 at 11:20 am | Permalink

    Really interesting to read about Ford’s lack of leadership and initiative. Was at the Mich Radio sponsored panel discussion on the sustainability of consumerism yesterday and the folks there were saying just the opposite. Sentiment there was that industry can/will/must take the lead, and any sort of government intervention will just muck things up. Not entirely surprising to hear from b school types, but I was at least expecting a little more from the guy with a dual appointment in the school of natural resources (with some sort of title that involved the word sustainability).

  10. egpenet
    Posted November 17, 2007 at 11:42 am | Permalink

    Katy:

    Just remember that it is a math formula.

    The car companies each produce just so many thousands of vehicles, financed at a certian rate, to put money in the pockets of owners/
    executives and (once in a while) the shareholders. No more, no less.

    IMHO it’s the shareholders who are getting the shaft, not to mention the next UAW 20,000 layoffs (who have been replaced by lower cost workers).

    Leadership? They complain about “government mucking it up.” And government DOES do just that. But along with the “mucking up” comes government bailouts, lowr mileage standards, highway and suburban sprawl financed by the government and other benies that literlaly force us to buy more cars and trucks … the cycle continues.

    In the long run, it’s our cities and the environment that get “mucked up.”

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