Ford admitted that a conflict between its production policies and environmental concerns, Reuters reported on Thursday, saying that the company’s popular but gas-guzzling sport utility vehicles (SUVs) hamper its environmentalist image.
Ford, in a wide-ranging, 98-page corporate citizenship report, said its market leadership in sport utility vehicles – the most profitable group of vehicles Ford sells – has created a dilemma for the company as it works to be at the forefront of improving fuel economy and cutting emissions.
"There are very real conflicts between Ford's current business practices, consumer choices and emerging views of sustainability," Ford said in the report, released at its annual shareholders' meeting at the Atlanta Zoo.
Ford Chairman William Clay Ford Jr., an avid environmentalist and great-grandson of founder Henry Ford, has made social and environmental responsibility a key goal of his company philosophy.
But sport utilities and other light trucks, which typically are less fuel-efficient and more air-pollutant than cars, have surged in popularity in the last 10 years as consumers seek more utility and functionality. Some analysts expect trucks this year to account for more than half of all light vehicle sales in the US for the first time.
Ford's truck and SUV sales and offerings have also boomed, making its North American operations the backbone of its worldwide profits. The company now has six SUV models, including the new Escape due out this fall, up from two in 1990. The Ford Explorer is the best-selling SUV on the US market, and the F-Series full-size pickup truck has been the best-selling vehicle in the United States for almost 20 years.
One of Ford's SUVs is the massive Excursion. The largest SUV on the market, the Excursion gets 4-7.5 kilometers per liter (km/l), and has become a target of environmental groups critical of Ford's offerings.
At last year's annual meeting, William Ford defended vehicles like the Excursion as responding to customer demands, and doing so in an environmentally responsible way by slashing their emissions. Ford also said the company could make small cars that get 34 km/l, but if customers do not buy them, they do not help the environment or the automaker.
At the meeting Thursday – where Ford's top executives sat behind a bamboo-bordered dais – William Ford told shareholders that being socially responsible is a competitive advantage.
Although the automaker is taking a risk by publishing a report that airs opposing views – including a stinging report from the Sierra Club environmental group – Ford said it is necessary to show the company is serious about its goals.
"It's all about becoming a transparent corporation and letting others see what we do," he said.
The Sierra Club, in a response Thursday, said it looks forward to working with Ford on improving fuel efficiency.
"While it isn't quite the fall of the Berlin Wall, we applaud Ford's recognition of the environmental and safety problems posed by SUVs and its commitment to improve the fuel economy of its products," said Daniel Becker, director of the Sierra Club's Global Warming and Energy Program.
In its citizenship report, the automaker said its SUVs are a response to consumers, in particular baby boomers, who want the vehicles' versatility. Ford also said if it did not meet that demand, other competitors would, depriving Ford of profits.
"This in turn would make it more difficult to generate the financial resources necessary to invest in research and development of new technology and products," the report said.
Ford said it has implemented short-term measures, including making all of its light trucks low-emission vehicles. In the longer term, however, Ford said, it faces the challenge of developing new technologies that meet its environmental and economic goals – (Several Sources).
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