Taken for A Ride : Detroit's Big Three and the Politics of Pollution

by Doyle, Jack

• ISBN13: 9781568581477
• ISBN10: 1568581475
• Format: Paperback
• Copyright: 2000-06-13
• Publisher: Perseus Books Group

Summary

Smog was discovered in L.A. in the 1950s, and scientists showed that the city's burgeoning car population was the cause. Thus began almost 50 years of bobbing and weaving by the Big Three auto makers -- General Motors, Ford, and Chrysler -- to avoid responsibility. As the U.S. government became involved in auto regulation, the Big Three countered with threats, intimidation, and subterfuge. Catalytic converters, alternative fuels, and emissions standards all came about long after they could have as a result of this tug of war. In Taken for a Ride, Jack Doyle documents a sordid tale of delay, missed opportunities, and serious environmental culpability.

Table of Contents

Acknowledgments	vii
Introduction	1	(10)
Polishing the Oval	11	(6)
Bad Air	17	(12)
Smog Conspiracy	29	(22)
Eternal Combustion	51	(30)
Attack & Delay	81	(18)
Energy, Cars & Jobs	99	(28)
The 1977 Amendments	127	(22)
Enforcement Wars	149	(24)
Help from Their Friends	173	(22)
Missed Opportunities	195	(14)
Bad Air, 1987	209	(8)
Fuels on the Fire	217	(22)
Gas Guzzling	239	(32)
Not Exactly Electrifying	271	(34)
EV Conspiracy?	305	(20)
The Honda Effect	325	(10)
Ozone Alert	335	(34)
Political Cover	369	(26)
The High Ride	395	(26)
Slow Dance to Supercar	421	(10)
The Last Auto Fights?	431	(8)
Miles to Go	439	(22)
Notes	461	(46)
A Time Line of Technology, Commerce, and Politics	507	(8)
Appendix A: Big Three Recalls for Emission System Failures: 1973-1998	515	(20)
Index	535

Excerpts

Chapter One

Polishing the Oval

The love affair with the automobile might not be over yet, but the honeymoon is.

--William Clay Ford, Jr.

* * *

William Clay Ford, Jr., the forty-year-old great-grandson of Henry Ford--inventor of the Model-T and founder of the Ford Motor Company--was scheduled to give a talk to the Detroit chapter of the Society for Automotive Engineers at the Greenbriar Hotel in White Sulfur Springs, West Virginia. The Greenbriar is one of those secluded places in the country where corporate executives often go to meet in private. It was October 1997. At the time, young Bill Ford was rumored to be in the running to become chairman of Ford Motor. The Ford family still held 40 percent of the voting stock in the company, but a family member had not run the firm since 1980. So when Bill Ford came to give his talk, he had his listeners' attention. Ford's audience that day included scientists, engineers, and auto executives. His topic was provocative, too: the automobile and the environment.

    "Cars and trucks have begun to be seen by some as a social liability, primarily because of their impact on the environment," Ford said. "I want to talk about what we have to do to address those concerns, and rekindle the love affair with the automobile.

    "I believe the environmental issues the world faces are real and daunting. And I believe that for the public--which includes our customers, our employees, our stockholders, and voters--environmental preservation is going to be one of the most important issues for the twenty-first century." Indeed, as Ford spoke, the world of nations was preparing to meet in Kyoto to discuss an international treaty on global warming and ways to reduce greenhouse gases--many of which result from burning fossil fuels in cars, trucks, and various industrial processes.

    Back in Detroit, however, Bill Ford was not directly engaged in the day-to-day management of the Ford Motor Co. and did not have, in the eyes of some observers, enough of an executive profile to run the company. True, he had worked in the company for fifteen years, almost immediately after completing his formal education--Hotchkiss boarding school in Connecticut, a degree from Princeton University, and an MBA from the Sloan School of Management at the Massachusetts Institute of Technology. In fact, Bill Ford had been on a management track since 1979--commercial trucks, advanced vehicle planning, vehicle design, and corporate strategy--rising to become a vice president in the 1980s. But in 1994 he stepped down from active management to succeed his father, William Clay Ford, Sr., as chairman of the board's finance committee. At about the same time, he became vice chairman of the Detroit Lions football team, also owned by the Ford family, and later took over the team, also becoming active in National Football League financial affairs. He also pursued some outside interests: starting a home insulation company at one point, then buying up a fly-fishing rod company in Telluride, Colorado, to pursue his passion in fly-fishing with a childhood friend as business partner.

    For some in the company, Bill Ford's departure from day-to-day management surely meant he was out of the running to succeed then-chairman Alex Trotman, who had successfully led the company in the 1990s, but who might not stay on beyond 1999. Yet Bill Ford's remarks at the Greenbriar--hinting at a new era ahead--had the sound of something more than just another speech.

    "I truly believe there is a competitive imperative to be responsive to environmental concerns," he continued, "and woe be it to the company that ignores them. I think companies that are not environmentally responsive will have difficulty selling their products, attracting investors, and recruiting bright young employees."

    Bill Ford, it turns out, also had some environmental stripes of his own. In recent years, he served on the board of directors of the Nature Conservancy, the Greening of Detroit group, and Conservation International in Washington, DC. And meanwhile, in his various roles on Ford's board--which he joined in 1988--he was also "encouraging environmental action." All of this greenness, especially outside of the company, did not escape the notice of some of the more traditional members of Ford's management. They warned young Bill not to hang out with environmentalists. But he refused to heed that advice. "We need to know these people," he said, "and we need to talk with them."

    At the Greenbriar, Ford laid out the environmental challenges facing the auto industry and why the Ford Motor could not ignore them. "There are 625 million cars and trucks in service around the world today. In the next thirty years, that number is expected to reach one billion as new markets open and living standards rise. As the number of vehicles increases, so will concerns over emissions, energy usage, and over-crowded roads.

    "That concern is manifesting itself in many ways. In some major cities in the United States, loose-knit groups of pedestrians and bicyclists have taken to blocking traffic and protesting cars as the predominant method of transportation. In the UK, Deputy Prime Minister John Prescott has said in this new transportation strategy `some stark and difficult choices may have to be made'--possibly including the elimination of the two-car family. Actually, restrictions on automobile use have already been witnessed all over the world--including driving bans in Milan and Sao Paulo."

    The auto industry, of course, had not been sitting still through all of this, and Bill Ford acknowledged the positive changes that had occurred. He praised the industry's engineers and scientists who had found ways to double fuel efficiency in Ford cars since the 1970s; reduce emissions more than 96 percent nationally; and recycle more than 75 percent of the content of most automotive vehicles. "I know my great-grandfather would have been proud of our progress," he said. "Henry Ford was one of this century's environmental pioneers. He strongly believed in preserving the natural environment as well as recycling." Ford then turned to the future and the new undertakings of the Ford Motor Company--especially the new technologies that lay ahead.

    "I believe that a significant part of the automotive fleet in the future will be vehicles that run on alternative fuels. But we don't know today which technology or which fuel will be the winner ten years from now. The general strategy in the industry has been to pursue all technologies that show promise, continuously improve them, and let future developments and the marketplace decide."

    Ford Motor was then working on a range of new vehicles, some of which were on the road: "flexible fuel vehicles," cars that ran on both ethanol and gasoline; cars that could run on natural gas; and the "P-2000" car, a prototype, lightweight vehicle using an advanced propulsion system that would get three times the mileage of today's cars with very low emissions. Then there was the joint research effort with the federal government, called "The Partnership for a New Generation of Vehicles." Begun in 1993 with a prod from Bill Clinton and Al Gore, the PNGV, as it was called, is a ten-year, moon-shot type endeavor designed to yield "pre-competitive technologies" and a prototype vehicle by the year 2004 that would have a fuel efficiency of about 80 MPG, or three times today's family car, without sacrificing affordability, utility, or safety. "The program has the best minds of Ford, Chrysler, and GM, auto suppliers, government laboratories and universities working together," Ford explained. "The issues are so enormous that the only hope of victory is if government and industry work together to meet the goal of a cleaner future."

    Ford cautioned, however, that "public policy should not prescribe the technological solution." A better approach, he offered, "would be government purchase of new technologies, like alternative fuel vehicles, that would help create demand and reduce the cost of early low-volume production." As for government regulation, he added, the regulatory process should not keep turning into "an adversarial confrontation."

    But perhaps William Clay Ford, Jr.'s most interesting remarks came when he departed from his prepared text to talk about global warming.

Global Warming

Global warming, Ford told his listeners, "is real enough that we all ought to be concerned." The auto industry, he suggested, should not be slow in reacting to this problem, as it had been in the past on issues such as auto safety, urban smog, and automotive fuel economy. "If we're seen as dragging our feet and once again saying no," he said, "I don't think it's going to be good for our companies. I think we need to act as if it's real. I think we need to plan as if it's real. I think there's a risk that we'd be marginalized in the court of public opinion if they make up their mind and we don't do anything about it."

    The US auto industry, however, was not planning as if global warming were real. In fact, for the most part, Detroit's Big Three were hoping it would go away. For nearly a decade, and even through the last several years as more scientific consensus formed around the likelihood of global warming, the Big Three and their colleagues in the chemical, coal, and oil industries took the view that global warming was only theory, that there was no scientific proof, and that any actions taken to regulate industrial emissions or alter new products to meet that challenge would be premature. In the months prior to Bill Ford's speech at the Greenbriar, the auto industry laid out $13 million for an advertising campaign to wage public relations war against the Clinton administration and the possibility of an international treaty to regulate greenhouse gases. This treaty, soon to be considered in Kyoto, Japan, promised to have more teeth than the 1992 version signed in Rio de Janeiro that called on nations to make voluntary greenhouse gas reductions. The new treaty was proposing mandatory reductions with a proportionally greater share coming from advanced nations, which the Clinton administration supported but not with reductions as steep as some environmentalists and Europeans wanted.

    About a week before Bill Ford's speech at the Greenbriar, the Big Three executives--Alex Trotman of Ford, Jack Smith of GM, and Robert Eaton of Chrysler, plus Stephen Yokich of the United Auto Workers (UAW)--met privately with President Clinton and several cabinet members at the White House to make their views known. "We believe the treaty would be bad for the United States in terms of jobs and the economic vitality of the country," said Ford's Alex Trotman to the media after the meeting. The automakers said the proposed treaty would increase gas prices by 50 cents a gallon and boost electricity prices by 20 percent, raising the cost of making cars.

A New Course?

So, was William Clay Ford, Jr. saying something different at the Greenbriar? True, he also took his shots at the proposed Kyoto treaty, saying that by excluding some nations, the treaty wasn't fair and would prove ineffective. "We believe in a global economy," he said. "Environmental degradation is a global problem. We can't have regional solutions." Still, the young Ford sounded more positive about the environment and the economy. "I'm chairman of the finance committee and the environmental committee of Ford's board of directors," he said, "and I don't see the two as being in conflict. In fact, I see tremendous business opportunity for the company that can take the lead in technological breakthroughs that protect and preserve the environment.

    "I think we're going to find that not only are economic growth and environmental protection compatible, they're complementary. We welcome an opportunity to produce vehicles more compatible with our environmental goals. That's what we want, and, most importantly, what our customers will demand. It is America's responsibility, as the world's leading economy, to lead the way."

    David Versical, managing editor of Automotive News , who covered the Greenbriar gathering, called Ford's speech "remarkable." Another listener thought the young Ford's positions "naive." Still another was disappointed Ford didn't push his audience to do more. Yet, Bill Ford appears to be an executive with a sure understanding of what kind of company Ford Motor should be.

    "The Ford Motor Co. should stand for something more than cars and trucks. There is a Ford way of doing things that we cannot lose.... We need to be continuously polishing that Ford oval." At times, Bill Ford even appears to have a social agenda in mind. As the company expands into Asia and Latin America, he says, he would like to find a way to emulate his great-grandfather's involvement in helping to build hospitals, schools, and highways abroad. At home, he has fought to help revitalize Detroit, pushing a deal to bring a new stadium and the Detroit Lions back to the city from the Silver Dome in Pontiac. He says the Lions should have never gone to the suburbs in the first place. When the NFL tried to cancel the annual Thanksgiving Day game that has been a hallmark of Detroit for many years and give it to a better team, Ford chided NFL team owners at his first meeting: "This game doesn't belong to you or to us. It belongs to the fans who've been watching it since 1934--which predates most of the franchises trying to take it away."

    Those who have dealt with Bill Ford are impressed. "He's a brilliant man," says Detroit mayor Dennis Archer. "He has maturity and intellect beyond his young age.... If he looks you in the eye and tells you something, you can take it to the bank...."

    At the Greenbriar, Ford left his listeners with these words.

The love affair with the automobile might not be over yet, but the honeymoon is. Environmental stewardship is a heartfelt concern of our customers and of policymakers around the world. It should be a top priority for the auto industry in the twenty-first century. The challenge is clear: we must lead the green revolution.

I'm confident, that our engineering community is up to this challenge. By meeting it, we'll show the world that the auto industry leads the world in technological progress. We will also ensure that future generations enjoy the personal freedom and prosperity that our industry produces.

And our clean vehicles will allow our children and grandchildren to continue the love affair with the automobile.

    William Clay Ford, Jr.'s remarks--though careful and in the tradition of an up-and-coming executive, and certainly not revolutionary--were still bucking up against a "culture of resistance" on environmental matters; an attitude and way of doing business deeply embedded not only at Ford, but at General Motors, Chrysler, and throughout the US auto establishment. Environmentalism, where it existed at all among the Big Three, had come about only grudgingly, as a force imposed upon them from the outside. Environmentalism was largely seen by the automakers as a threat; as something to be opposed and resisted--and when that failed, maneuvered around or endlessly litigated. This is the way it had always been, for nearly five decades.

    Indeed, Bill Ford had a considerable legacy to overcome if he was truly the environmental Renaissance man he projected himself to be. Could he move the Ford Motor Company, and, through that movement, push the entire US auto industry into a new era? Could Ford become a global leader?

* * *

Less than a year after Bill Ford made his remarks at the Greenbriar, it was announced in Dearborn that he would become the company's next chairman, effective in 1999. He would share power with Jac Nasser, fifty-one, who would serve as president and chief executive officer. On May 13, 1999, Bill Ford was formally installed as the new chairman of the Ford Motor Company. His opening remarks at the company's annual shareholders' meeting, regarded as a bit of contemporary business history, were broadcast live on the large NBC-Panasonic tv screen at Times Square. Ford used the time to restate his administration's goals of corporate and environmental responsibility, noting that company polling of consumers worldwide had found that "universally people are demanding corporate responsibility, especially young people."

    Once in his new position, Bill Ford continued to speak out on environmental issues. In July 1999, Darren Gersh of the Nightly Business Report asked him why environmental issues were becoming so important to his company. "First of all, it's the right thing to do," said Ford. "Secondly, each succeeding generation is going to demand it from us. As you know, as children are taught in preschool and kindergarten about the environment, their expectation about environmental friendliness is only going to grow as they get older. So, for us to capture the consumer in the next century, we have to get on the right side of this issue. Finally, we see it as a competitive advantage. The field is wide open. Nobody has carved out a reputation for themselves as an environmentally friendly industrial company and certainly not an automaker. We would like to change that equation."

    Gersh later asked Ford about the future. "Your family has an incredible legacy. When people look back on your term at Ford, what would you hope your legacy would be and how will you contribute to that family history?"

    "Henry Ford really, in many ways, defined the twentieth century," said Bill Ford. "[P]rior to the assembly line and the Model-T, most people never traveled in their entire lifetime more than twenty miles from home. Ford Motor Company changed that. What I would like for people to look back upon is to say that in the twenty-first century, Ford Motor Company undid the excesses of the prior industrial revolution; that we made personal mobility possible with no social trade-offs."

Copyright © 2000 The Tides Center/Corporate Sources. All rights reserved.