FORD BACKS OFF HYBRIDS

Back when he was running the company day-to-day, Bill Ford, Jr. made headlines by jumping on the “green” bandwagon. At the time, he promised substantial increases in fuel economy for SUVs.

Ford later backed out on that promise.

Now, Ford and his company have done it again. And, this time, it isn’t clear that it’s Bill Ford’s fault.

The promise was that Ford would build 250,000 hybrid vehicles.

Well, forget that. Bill Ford has now announced that the company’s scraping that plan, too. It’s, instead, going to concentrate on improving fuel economy in internal combustion engines.

As though it had a choice on that one, in light of the new CAFE legislation.

Ford claims that an internal review of the marketplace determined that there did not exist a market for hybrids large enough to support the costs of development and production necessary to produce 250,000 hybrid vehicles. 

That’s a bit odd. Toyota has sold 500,000 hybrids in the past decade and projects that annual Toyota hybrid sales will hit 1,000,000 million vehicles per year in the early part of the next decade. General Motors, of course, has introduced hybrid versions of it’s trucks, as well as the Malibu and has development underway for hybrid powertrains in all vehicle lines. 

The real problem may be that Ford was posturing, at least in part, when it made the 250,000 hybrid promise.

When the Detroit automakers were still actively challenging proposed changes in the CAFE standards, they appear to have adopted the odd strategy of trying to prove that they were already well advanced in development of economical cars. They seemed to be trying to prove that Congress didn’t need to act, that they were already taking care of the problems themselves. Ultimately, of course, this seems merely to have convinced the politicians that substantial increases in fuel economy were entirely feasible, so the strategy – if that’s’ what it was – backfired.

Ironically, though, the new CAFE standards may have been the direct cause of killing off what little hybrid program did exist a Ford. 

The first phase of the new CAFE standards becomes effective in 2012. Ford’s desperate cash situation is well known. It seems entirely possible that Ford looked at the expense and timeline of a hybrid program, particularly one playing catch-up in the market place to its competitors, and decided that it was better advised to spend its money meeting the immediate need of adapting current products and those in the pipeline to the 2012 standards.

Ford’s thinking may have some logic behind it, too. It may be thinking that when it needs a hybrid powertrain, it can buy it. Development of powertrains is very expensive. For many years, General Motors has not only supplied it own divisions, but has been a major transmission supplier to other manufacturers, as well. The six-speed automatic transmission used by BMW is actually a GM unit, designed and manufactured by GM. Daimler often outsources its transmission development and manufacture, usually to ZF. It would not be a surprise if Ford is thinking that it, along with a number of other manufacturers, including Chrysler, Daimler, BMW, and Renault/Nissan, are better off letting someone else make the investment.