Ford buying Rover? Saw it coming. Nissan and Renault? Coulda told you. I should be making a fortune in the stock market.
About four months ago, I was talking to a very senior vice president of Ford Motor Company, who in essence confirmed a rumor that was being passed around at the Detroit Auto Show. William Clay Ford Jr., chairman of the board, and Jac Nassar, CEO and president, were reputed to have gotten into a shoving match in the executive offices in Dearborn, screaming and cursing a blue streak at each other.
The thought of these pinstriped patricians cursing at each other while horrified staff looked on--well, it is delicious. Ford and Nassar, the Gilbert and Sullivan of the automotive world. But what could they have to fight about?
Then, with William Clay Ford Jr.'s admission last week that sport-utility vehicles are inherently more wasteful and less safe than other vehicles, the tumblers fell into place. Jac Nassar, the mercenary, flesh-eating executive who in the 1990s whipped Ford into shape--indeed, turned it into the most vigorous automotive concern on the planet--would never have endorsed such a statement in Ford's "Corporate Citizenship Report." Jac the Knife would have seen the statement as unmanly and unmanning, threatening to the company's most profitable vehicles, whose design and proliferation he himself oversaw. Jac the Knife could be counted on to stand up to Ford Jr., who, after all, inherited his position, and can claim no transcendent wisdom of it. Jac the Knife would have shoved the boss in frustration, and probably did.
A little background: Ford's statement last week about the liabilities of sport-utilities was, in essence, the acknowledgment of the elephant in the living room. Everyone knows that SUVs--at least truck-based SUVs--are heavier, higher and less stable, less efficient and more polluting. They burn more fuel and produce more greenhouse gases than transportation doing similar work.
Meanwhile, SUVs are less safe, for passengers inside them and cars around them. You are three times as likely to die in an accident if an SUV hits you, as opposed to a car. Also, incidents of turnover and single-vehicle accident rates for SUVs are significantly higher. All this for vehicles that typically carry no more cargo or passengers than station wagons.
None of this is in serious dispute, but neither is these vehicles' popularity or profit. Produced from pre-engineered truck chassis designs, SUVs can represent profits of up to $20,000 per vehicle for companies like Ford, GM and Dodge.
Leading the SUV charge in the 1990s was none other than Ford Motor Company, with Jac Nassar at the whip. First it produced the Explorer--a winning competitor to the Jeep Cherokee--then, in the mid '90s, Ford introduced the embarrassingly large Expedition and Lincoln Navigator. And last year, Ford unveiled the planetary-scale Excursion, a massive 10-cylinder, 7,000-pound monster SUV that galvanized opponents of SUVs and brought the whole notion of safety, environment and corporate responsibility to the front of public debate. There, opponents said, look what lies at the bottom of America's slippery-slope love affair with SUVs.
In the background during all this was William Clay Ford Jr., a committed environmentalist--well, as close as you can get and still be named Ford--who was being groomed to take over the chairmanship. (The Ford family still owns 40 percent of company stock.) Eighteen months ago, he took the top spot at a company he knew was guilty of industrial atrocities and horrible profit-raking.
One of the first actions Mr. Ford took was to mandate that all Ford trucks and SUVs would meet and exceed low-emission vehicle standards by 2001--a bold initiative for which, I think, he went unrewarded.
When the Excursion came out, and Keith Brasher of The New York Times crucified Ford for it--one problem: the Excursion was so big it tended to literally run over cars it hit--William Clay Ford Jr. truly turned the corner. This was an interesting development, because Mr. Ford had never felt the sting of public opprobrium.
The next thing anyone in the automotive media knew, Ford was launching not just a new car but a whole new division--the Think! Division--producing such green-thinking vehicles as electric city cars with plastic bodies made of recycled pop bottles, and electric bikes, no less. During the press introduction for the Think! Division, Jac Nassar himself rode a moped-like bike across the stage at Cobo hall, looking as tormented as a trained Russian bear. Mr. Ford smiled and looked on. It is hard not to see the Think! Division as anything but an atonement for the Excursion.
But Mr. Ford's is not quite a road-to-Damascus conversion. While acknowledging its failings, Mr. Ford said the company was obliged to keep producing SUVs even as it looked for ways to improve them. There are some among us who would have liked a more tangible commitment, such as a moratorium on new big SUVs, but that is probably impractical since, as Mr. Ford said, if he didn't build them, someone else would.
And that points the finger of blame directly where it belongs: on us. Count on GM and Daimler-Chrysler to say something to the effect that, "We build what consumers tell us they want. When consumers tell us something other than SUVs, then that's what we will build." Such a stance obviates corporate social responsibility, of course, but it is eminently practical and inarguably reasonable. Don Quixotes like Mr. Ford notwithstanding, in a capitalist society we get the products, and government, we deserve.