Ford CEO Calls for Energy Incentives
Ford Motor Co. Chairman and Chief Executive William Clay Ford Jr. urged Congress on Tuesday to offer a package of tax incentives to make the country less dependent on foreign oil and to drive innovation in the struggling domestic auto industry.
Ford, during a speech in Washington, urged Congress to “dramatically increase” tax credits for research and development of alternative vehicles and consider tax incentives to help American manufacturers modernize their factories.
He also urged investments in training programs for American workers, the encouraging of consumers to buy fuel-saving vehicles and partnerships to build an infrastructure of gasoline stations that sell ethanol.
“Now, more than ever, I believe we must take action,” said Ford, who also met with White House officials. “If we put our heads together and keep in mind our shared interest in America’s future, I’m confident that we can innovate our way toward the right solutions.”
Ford Motor and other American automakers have been hit hard by increased competition from Asian and European rivals, steep healthcare expenses and high costs for raw materials.
In September, Bill Ford urged President Bush to convene a summit with automakers, suppliers, energy companies and the government “to discuss our nation’s energy security and our role in helping find a solution.”
Ford, the great-grandson of company founder Henry Ford, said the incentives could build upon those included in the federal energy bill signed into law this year. The measure offers as much as $3,600 in tax credits for motorists who buy hybrid gasoline-electric vehicles and encourages the use of ethanol.
Ford Motor, based in Dearborn, Mich., would need to show that the incentives are not corporate welfare and would help the nation’s fleet of vehicles achieve higher fuel economy, said David Friedman, research director of the clean vehicles program for the Union of Concerned Scientists.
“U.S. taxpayers can’t afford to prop up companies that have basically done poor planning, but we can afford to do it if we get something out of it,” Friedman said.
Ford has launched a public campaign to describe its plans to produce 250,000 hybrids a year by 2010, 10 times the current number. It now sells two hybrid sport utility vehicle models.
The automaker also has announced plans to produce 250,000 ethanol-capable vehicles next year, including its Ford F-150 pickup, Ford Crown Victoria, Mercury Grand Marquis and Lincoln Town Car.
The company reported a third-quarter loss of $284 million last month. CEO Ford said at the time that he would complete a restructuring plan next month and announce significant U.S. plant closings in January and layoffs affecting salaried workers and hourly workers represented by the United Auto Workers.
A day after rival General Motors Corp. said it would eliminate 30,000 jobs and close all or part of 12 facilities, Ford declined to provide details on his company’s restructuring plan.
“Restructuring alone won’t bring success. It’s something we have to do. We will address it. We have plans in place to do it,” he said. “But frankly, that’s not something the customer much cares about. The customer wants the latest and greatest technology. The customer wants leadership in technologies that are going to make their lives better.”
Also Tuesday, Moody’s Investors Service said it might lower Ford Motor’s debt rating further into junk territory, from Ba1, the highest non-investment grade. The ratings firm, citing the automaker’s declining sales of SUVs and other trucks, also said it might cut the rating of finance arm Ford Motor Credit Co. from Baa3, the lowest investment-grade rating.
