Sep 21, 2005 (From the CalCars-News archive)
Two stories about very encouraging trends. (Note the option will be on half their vehicles lines; this does not say half their vehicles will be built as hybrids.)
Ford to Boost Production of Hybrids Tenfold
By Sholnn Freeman
Washington Post Staff Writer
Wednesday, September 21, 2005; 6:00 PM
Ford Motor Co. jumped on the hybrid car bandwagon today with a promise to boost production tenfold to 250,000 cars and trucks per year by 2010, the strongest commitment yet by a Detroit automaker to build gas-electric vehicles.
Speaking in Dearborn, Mich., Bill Ford Jr., the company's chairman and chief executive, said Ford was acting without prodding from policy makers in the government. He said Ford would choose to be environmentally progressive through hybrid production and "get on with it."
Currently, Ford sells only one hybrid vehicle -- a gas-electric version of the Ford Escape, a small sport utility vehicle. Ford has plans to sell 24,000 Escape hybrids this year. With the new commitment Ford will offer the option of a gas-electric engine on more than half of its Ford, Lincoln and Mercury brands. The Ford announcement comes as gasoline prices have steadily risen, causing consumers to turn away from vehicles with poor fuel economy, particularly gas-guzzling SUVs made in Detroit. Both Ford, the No. 2 U.S auto maker, and General Motors Corp., the largest, have reported substantial slides in profits in their North American operations this year. Bonds from the two were downgraded to junk status by Wall Street bond-rating agencies because of the automakers' reliance on declining SUV profits.
All of the auto companies are pressing hard to catch up with Toyota Motor Corp., the industry leader in hybrid technology. Toyota plans to sell 140,000 gas-electric hybrids in the United States this year. Its popular Prius is on track for sales of 100,000 vehicles. Toyota also has a Highlander hybrid and the RX 400h from Lexus. Additionally, Toyota has said it is looking to bring down hybrid costs. Because of added costs associated with development and production, gas-electric hybrids typically cost $2,000 to $4,000 more than similar gas-powered vehicles.
Carmakers are looking for all sorts of ways to cope with rising gas prices. Mitsubishi Motors Corp. unveiled a program to give U.S. buyers of its cars and SUVs free gasoline for an entire year. The offer applies to 2005 model-year vehicles. The program begins Friday and runs through Oct. 31. Mitsubishi said buyers will be mailed pre-paid debit cards totaling $1,500 to $2,500 depending on which vehicle they buy.
In Washington this week, GM had its public relations machinery in overdrive in an attempt to improve the automaker's laggard image on energy and environmental issues. GM executives from Detroit, including Rick Wagoner, the chairman and chief executive, showed off plans to select journalists and congressional leaders for future vehicles that the company said will get better gas mileage than its current models. A GM spokesman said GM will build 12 hybrid models by the end of the decade. The first will be a hybrid version of the Saturn Vue, a small SUV, followed by larger SUV hybrids starting in 2007, he said. GM will also bring out some large car-based SUV models that get better gas mileage than traditional truck-based models.Sensing a shift in consumer buying habits in the United States, the world's largest auto market, nearly all auto companies with sales here have been seeking a hybrid vehicle strategy. Earlier this month, at the Frankfurt auto show, Volkswagen AG and Porsche AG announced a joint venture to build a hybrid SUV for the U.S. market. BMW Group this month also said it agreed to join an ongoing effort by GM and DaimlerChrysler AG to develop hybrid technology. Ford said it will also offer vehicles that can run on a blend of gasoline and ethanol. Ethanol, a fuel derived from corn and other agricultural products, is cleaner and cheaper than gasoline. Ford's announcement on hybrids drew praise from environmental groups, which have advocated greater use of hybrid technology, and pressed Bill Ford in particular to back up his stated concern for the environment with action.
"Ford has always been willing to listen. But the reality is that their products have continued to lag behind much of the industry in environmental performance," said Jason Mark, vehicles director of the Union of Concerned Scientists, an environmental advocacy group based in Cambridge, Mass. "Ford and GM are in junk bond status. It would be insane to keep offering the same products."
Ford to boost production of hybrids tenfold Wed Sep 21, 2005 8:07 PM BST
By Poornima Gupta
DEARBORN, Michigan (Reuters) - Ford Motor Co. <F.N>, the No. 2 U.S. automaker, will boost global production of gasoline-electric hybrid vehicles tenfold by 2010, Chief Executive Bill Ford said on Wednesday.
By then, more than half of the company's Ford, Lincoln and Mercury cars and light trucks will have hybrid capability, Bill Ford said during a meeting at a research lab here with company scientists and engineers.
Hybrid vehicles twin a gasoline engine to an electric motor and batteries to boost fuel economy.
The CEO said Ford will have the capability to build about 250,000 hybrid vehicles by 2010, with the ability to boost capacity based on demand for the vehicles.
Ford, which is also looking at expanding the hybrid lineup across its European luxury brands, currently makes about 24,000 hybrid vehicles annually.
"We know that our customers are concerned about energy," the CEO said. "Our job is to alleviate some of their concerns with viable options in their choice of transportation."
Ford -- which is struggling with strong competition, soaring health-care and raw material costs, and a slide in U.S market share -- is trailing Toyota Motor Corp. <7203.T> and Honda Motor Co. <7267.T> with the fuel-efficient technology.
The Japanese automakers have been successful in cultivating an image as the leaders in environmental technology by offering a range of hybrid vehicles. Toyota plans to sell up to 250,000 units worldwide this year, mainly in North America.
Bill Ford said he expects the company will make money on hybrid vehicles by 2010.
"As we get into the second and third generation (of vehicles), as volume ramps up, costs will come down," he told reporters at a briefing following his speech.
Ford builds the Escape hybrid sport utility vehicle and will begin production this year of the Mariner hybrid, its Mercury version of the Escape.
MORE ETHANOL-FUELED VEHICLES IN 2006
By 2008, the Detroit-based company said it will have five hybrid vehicles on the road, including the Escape, Mariner and Mazda Tribute SUVs, all based on the same platform, or vehicle underpinnings. The other two vehicles will be the Ford Fusion and Mercury Milan mid-sized sedans.
Ford had previously said it has trouble offering more hybrid vehicles because of a shortage of specialized components and also what its executives have characterized as a "predatory" approach taken by some Japanese automakers.
Phil Martens, Ford's chief of product development, said the company is trying to develop a lot of the technology in house, and is working with U.S. suppliers such as Delphi Corp. <DPH.N> for hybrid components.
Ford gets battery packs for its hybrid systems mainly from Japan's Sanyo Electric Co. <6764.T> and other parts from various suppliers, such as Toyota affiliate Aisin Seiki Co.
In another push to produce vehicles with alternative fuel systems, Ford plans to launch four vehicles in 2006 that will run largely on ethanol, a corn-based fuel. That will raise production of vehicles that can operate with more than just gasoline in 2006 to as many as 280,000 units.
Ford will offer the ethanol-fueled option in its best-selling F-150 pickup truck, and the Crown Victoria, Mercury Grand Marquis and Lincoln Town Car sedans.
The company will launch a new corporate advertising campaign in the fall with the theme of innovation, the CEO said, but he declined to say how much it will spend in the campaign.
Bill Ford also said the company will begin a pilot program that will offset greenhouse gasses such as carbon dioxide, emitted in the production of hybrid vehicles. Through the plan, Ford will pay for projects around the world that reduce carbon dioxide emissions.
Ford shares were down 12 cents, or 1.23 percent, at $9.64 in afternoon trading on the New York Stock Exchange.
(Additional reporting by Ben Klayman in Detroit)