Tell me about Ford’s hybrid program and your work with Toyota.
Right now we’re in production with our hybrid Escape [SUV] and our hybrid Mariner [small SUV] and we just recently brought out the new hybrid Ford Fusion and hybrid Mercury Milan [sedans]. There was a misconception out there that we had used Toyota technology and that’s not true. This is all Ford technology.
One thing we’re very proud of is the Ford Fusion hybrid is getting 41 mpg in the city and 36 on the highway and 8 mpg better than the Toyota Camry. We buy batteries and transmissions, but the in-house knowledge of how you design the system, that’s really in house technology to Ford.
What has the cash-for-clunkers program meant for you guys?
It was a very successful program. It went much quicker than everybody had anticipated, but I think that what’s significant in terms of the overall vehicles that were purchased, the older vehicles that are off the market and that it was a good thing from an environmental stand point in terms of the newer vehicles had better fuel economy.
We did an early calculation showing how much saving the cash for clunkers did in terms of gallons of fuel. It got people thinking again about buying vehicles and coming into the dealerships. The Ford Focus and the Ford Escape, the Ford Ranger were top sellers in the program. A lot of the vehicles that were turned in were older SUVs and some trucks that were replaced with vehicles that got a lot better fuel economy. There are still some challenges with the payment part of it, but I think those are all being worked on.
There had been criticism that Ford has been a bit of a Johnny-come-lately to hybrid technology. The New York Times published a list of the top 10 cars bought and the top 10 traded in, and you did have 2 at the top 10 new vehicles purchased, but you also had 5 of the top 10 vehicles traded in.
Most of the vehicles traded in were 8, 9, even 10 years old. If you look at the market share of Ford in particular at that time, especially in the SUV and truck market, it would not surprise me, because we had a greater share of the market. If you look at the sales we got out of the Cash for Clunkers program, its equivalent to better than our market share today.
There a couple things that I think you should look at. Number one is some of the lists vary in terms of what were the top sellers. Some of the lists break out the Escape 2-wheel drive, Escape 4-wheel drive. I’m not surprised that more of the domestic vehicles were turned in, because the market share at that time was more weighted towards the domestics as well as the types of vehicles that were turned in. Toyota and Honda weren’t even in the market with SUV’s at that time. We don’t have anything smaller than the Focus, we will have that next year so obviously that was not a candidate there. What people were looking for, small cars, small SUV’s and small trucks, good fuel economy vehicles.
In “Who Killed the Electric Car” they make an argument that the big American car makers were given a $9 billion dollar subsidy to develop hybrid technology but didn’t really pursue it.
Woah, Woah, a $9 billion subsidy? Coming from where? We didn’t get a subsidy, I have to tell ya. Let me tell you what I think is wrong with that whole argument, and I’ve told a number of people before. A lot of people have said, “If only you had built the fuel efficient vehicles then you wouldn’t have been in the shape you are, because this is what the people wanted to buy.” I say ok, why, if that is the case then why did Toyota come to the US and build a truck plant? Why did Toyota build a Highlander? Why is the F-150 the number one selling vehicle in the United States? Because people wanted to buy it. So to say, well you didn’t build what people wanted to buy, well that’s not true.
When it comes to what the electric vehicle is, the technology was not right. The Ford Ranger was our electric vehicle, GM had their EV1. You can talk to Toyota about the Rav4 all the problems that we had with those electric vehicles. The people didn’t want to end that because they were getting basically free vehicles which we were heavily subsidizing. We did this because there was a mandate to push the technology. We spent over a billion dollars, I’m talking about the industry, trying to prove whether the technology was ready at the time.
That huge cost was borne by the companies trying to do this. Had there been a market, had there been an opportunity to make money, we would have all still been in there. We didn’t kill it because we didn’t like it, we killed it because it was not a profitable business and there was no long-term gain there. That’s why we’re all trying to get into the electric business now; that we see lithium ion has more promise, but again its very, very expensive and we’re going to have to figure out how do we drive the cost down. When you say that Ford was a Johnny-come-lately, I think Bill Ford has been very outwardly spoken on the environment.