Editors' blog
Anna Simpson, 9 Mar 2010
In last week’s episode of ‘Lark Rise to Candleford’, two women vied for a rare opportunit...
Any colour you like...as long as it's green?
With its burgeoning fleets of vast sports utility vehicles, and its history of ignoring environmentalist pleas, Ford makes for an unlikely green standard bearer. Yet its new chairman insists that it is now committed to a clean revolution, one that will transform both the car itself - and the way we get around. Bill Ford talks to Martin Wright.The view from the chairman’s office, on the top floor of the global headquarters of the Ford Motor Company, is a big one. Wide, open plains stretch out from the Detroit suburbs, out and away, tied down by the ribbons of grey highways. And on them, a steady stream of traffic - not the city runabouts of Europe either, but big cars, for big distances... You don’t need some limp-wristed integrated transport policy to get moving here, the view seems to say; you need dirt-cheap gas and a ‘sports ute’ truck - and in these parts, there’s no shortage of either.The letterhead says it all: “Ford Motor Company, The American Road, Dearborn, Michigan.” The Motor Suburb of Motor City. If the American dream had a heart, it would surely beat loudest here.
Yet it’s from this eyrie that William Clay Ford, Jr, has spent his first year as chairman dropping a series of small bombshells onto what was once the united front of the American motor industry. He’s blown a hole in its polished disdain of environmentalism. He’s warned that it risks becoming a pariah on the scale of Big Tobacco if it doesn’t clean up its act, and he’s invited everyone from Greenpeace to Amnesty International to come in and help him do just that. He’s pulled Ford out of the contrarian Global Climate Coalition, and argued the case for higher petrol taxes.
And his sense of mission seems to have infected his colleagues. In the foreword to its first corporate citizenship report (which in terms of its candour and rigorous self-appraisal, bearing all the hallmarks of veteran UK consultants SustainAbility, is an object lesson for others in its genre), CEO Jac Nasser insists that “Ford can become a company whose decisions... restore the environment and contribute to the creation of social and economic equity in communities around the world.” This is a car company, remember. And that has to be either the biggest slice of motherhood-and-apple-pie-in-the-sky this side of a presidential address, or one of the broadest, most ambitious, and inspiring goals ever defined by business.
On the practical side, chairman Ford is overseeing an investment programme that is pouring R&D dollars into electric cars, hybrids and fuel cells; into ambitious recycling programmes that will turn an old Ford from so much scrap metal into ‘technical nutrients’ for a new vehicle; into a long-term vision that could transform the company’s core business from selling cars into selling mobility.
And he’s replacing the cautious language of compliance with something little short of messianic. “We need a second industrial revolution - a clean revolution. Our industry has brought tremendous benefits - the freedom to live and work and vacation where you choose - but they’ve come at a cost. And that cost is primarily to the environment. If you look at our company, virtually everything that we do touches it. Exhaust emissions, fuel consumption, the way we make and dispose of our vehicles, the way we source the raw materials for them, the energy we use in manufacturing them. So our goal has to be nothing less than an emission-free vehicle that is built in clean plants, which actively contribute to the environment. And it can happen within my lifetime -hopefully within my working lifetime.”
At 43, Bill Ford speaks with an almost boyish urgency, interrupting questions in his impatience to get on to the next point, eager to enthuse over the potential of solar-powered fuel cells, but also to declare a willingness to learn from the protestors in Seattle or Prague.
“There is a growing anti-globalisation movement out there. It has not sunk its teeth into global companies yet, but it will. We want to get out in front of that, and the best way to do so is to be transparent and say: ‘Here’s what we are doing, and if you do not like it then help us figure out a strategy to change it.’” With that in mind, Ford’s started a series of ‘Think Leader’ discussions, bringing leading NGOs, from both the environmental and social justice world, together with senior Ford managers. “I find those discussions really invigorating. We want those guys to be brutally honest with us - praise us if we deserve to be praised, but smack us if we deserve to be smacked.”
To say that he was born into the company is an understatement. His great-grandfather (Henry of Model-T fame) founded it, his uncle was chairman, his father on the board. So his career was mapped out from the start? “Not at all. When I was at university, which is always a rebellious time, I was really drawn to working for an environmental group. For the World Wildlife Fund or Nature Conservancy, maybe - there was Greenpeace, as well, but it felt a bit too radical!” By the time he graduated, though, in 1979, the family firm “was in a terrible state. And I felt that since everything I had in life was due to Ford Motor Company, I owed it my best shot.”
In the early days he hid his inheritance behind the pseudonym ‘Bill Clay’, before coming out as a full-blood Ford as he worked his way up the ladder. He joined the board in 1988, barely into his 30s, fresh from running its Swiss operations - and already possessed of an address book bulging with environmentalists. It didn’t exactly endear him to all his management colleagues. “They told me to stop messing around with the ‘crazies’” - and his refusal to do so continues to irritate an industry whose initial instinct is to file all environmentalists under E for Enemy. As The New York Times put it, he has “alarmed insiders who fear that the scion of a billionaire family could put environmental causes ahead of profit”.
Ford bridles at the notion of a conflict. “One of the interesting little secrets of being green is that it saves you money. Under ISO 14001, for example, [the environmental management standard to which all Ford plants are signed up] we are saving millions of dollars every year through reduced energy and water use, reduced chemical handling, and recycling. None of our competitors has joined us with ISO 14001 because they think it is a cost, when in fact it is a cost saving.”
What his competitors have done, however, is smart over Ford’s recent, high-profile announcement of a goal of improving fuel economy in its sports utility vehicles by 25% over the next five years. For a few days this summer, environmentalists cherished the gloriously unlikely sight of Big Auto’s finest tussling over who’s the greener, with both General Motors and DaimlerChrysler insisting that they’re ahead in the mpg stakes, and more advanced in terms of hybrids and fuel cells, too. Having apparently alienated half the industry and its allies, it must taste sweet to have his rivals bounced into an outbreak of ‘me too-ism’. “I love the fact that the environment has become a competitive issue, because who wins? The customer and the environment win. People say to me that I must be upset because GM or the Japanese say they are greener than me [other critics have pointed to Toyota’s undoubted lead in the hybrid arena], but I think it’s great. Personally, I plan for Ford to be the leader. But even if that doesn’t happen, the fact that we have spurred this debate on is good for society and it’s good for the company.”
Analysts are sceptical that the public is baying for better fuel economy, and Bill Ford acknowledges that “so long as you’re paying less for a litre of gas than a litre of bottled water” it may not be their first priority. (He’d happily see a tax hike of 50 cents a gallon to help sharpen their focus.) But he insists they’re starting to demand it, along with other environmental ‘goods’ -while still wanting all the other car creature comforts. And he’s equally confident that in an age when “people still love their cars -they just hate everyone else’s”, environmental criteria will continue to inch up the customers’, and society’s, wish-list.
“Ultimately, the only way that you can have superior share value, and the only way to have superior returns, is to get the balance right between shareholders, customers and society. So I see no conflict between what we’re doing [on the environment] and profitability and customer satisfaction. I see quite the opposite. If we do not get this right, then we are going to be marginalised as a company and we are going to be marginalised as an industry.”
“For most of my career at Ford, our approach to the environment was one of compliance. ‘Lets meet the law’, period. And we got by for a number of years like that. But that mindset was very frustrating to me. I thought it was wrong and short-sighted and ultimately that it was the road to long-term disaster.” But there must be plenty of people still around at Ford who were quite happy with that approach. Weren’t they suspicious of this corporate road-to-Damascus stuff?
“Certainly, and I think some of them still are. But once I started talking about all this, the support and enthusiasm within the company, from the hourly workers and all the way through the salaried work-force -was overwhelming. The resistance has really come from just a handful of top executives.”
He has a way to go before he wins over all the rednecks. Only last month, The Wall Street Journal carried a sclerotic comment piece from Brock Yates, which savaged him as a guilt-ridden heir who was toying with the fate of a great industry by cosying up to the greenies. And perhaps the greatest backhand compliment came courtesy of a veteran Republican congressman, who pounced on Ford at the end of a speech he’d made exalting industry to embrace change. “I’d hardly gotten off the platform before the guy virtually grabbed me by the lapels and told me: ‘You are going to gain nothing by associating with these environmentalists. In fact, they are going to end up ruining your company. And, young man, just remember that no good deed goes unpunished.’”
With erstwhile friends like these, it’s hardly surprising that Ford’s traditional foes are a lot warmer. For the most part, campaigners have been swift to applaud the new chairman. “We’re very positive”, says Friends of the Earth’s Roger Higman. “The great thing is that he’s starting to convert his enthusiasm into action. Obviously turning round a major manufacturer is going to take years, but we’re very hopeful.” Most are keen to give the man a fair wind, but a few are more sceptical. Phil Radford of Ozone Action in the US says that while Bill Ford “has done a lot - and cares a lot”, when it comes to concrete achievements “a lot of it is green spin”, with the aim of fending off regulation. His colleague Chris Ball has called him “a good man in a tough position, trying to move an awfully big corporation”, but warned that continued commitment to the gas-guzzling sports utility vehicles (SUVs) “threatens to dwarf the good works”.
And it is indeed the ‘sports utes’ - by far the most profitable line for the company -which draw the most flak, with the mammoth 10 miles per gallon Ford Excursion first in the firing line.
There’s one on proud display in the entrance to the Ford HQ, parked incongruously on the marble floor. And compact and bijou it ain’t. It has all the grace of an armoured car, and, some would say, about as many green credentials. In the withering words of the Sierra Club, it’s “the Ford Valdez - the suburban assault vehicle”.
I’d not seen one in the flesh before, and, to be honest, my first reaction was to laugh at the macho absurdity of the thing. Studio apartments smaller than this change hands for small fortunes in Islington. No one, surely, could want a car this size. Even Detroit’s own US Auto Scene newspaper, which loves big cars like life itself, commented acidly: “It’s the end expression of the idea that if big is good then bigger must be better. It’s the same design philosophy that brought the barrel o’soda to convenience stores everywhere.”
Quite how this leviathan contributes to Bill Ford’s clean revolution is not immediately apparent. But he’s seen this one coming a long way off... “Look. The fact is that there’s a real market for vehicles like that. Maybe there shouldn’t be, but there is. If we unilaterally decided that we are going to drop all SUVs and pick-up trucks, not only would we go out of business, but the customers would still be there and they would go and buy somebody else’s. And we can meet that demand more responsibly than anyone. If you buy the Excursion, it’s 43% cleaner in terms of exhaust emissions than its competitors, and it’s made at the cleanest paint shop in the industry.” And he’s keen to point out that Ford is already planning a hybrid SUV; that it’s looking to the days when fuel-cell technology will make emissions irrelevant, and imaginative use of recycled parts drastically reduce the need for raw materials.
Yet you can’t help but get the impression that the monster is something of an embarrassment to the man. He’s on happier ground when he starts to sketch out a vision of how Ford might move beyond simply selling cars, big or otherwise. “People want access to mobility. But that doesn’t necessarily mean they want to own a car. Especially not in the big cities, in London or Paris, for example. I can see the day where you’ll walk into a depot with your smart card, swipe it, and keys will drop out. You then have a car to drive for an hour, a day, a month, whatever. When you’re finished, you drop the keys back in and then you are billed for your usage.”
How would that translate into business for the company? “Well, we haven’t defined the exact model yet, but we’ve already got the infrastructure in place to pull this off. We’ve got the network of Ford dealers, the Hertz rental car depots, and Ford Credit.”
“For us, the whole idea of individual ownership of cars or trucks is something that we are not hung up on. We may, in the future, be producing the same number of cars, but selling fewer. We’d be selling mobility, rather than selling vehicles. Having said that, at the end of the day somebody has to manufacture whatever these things are that we’ll get around in, and we are very good at that. So we’ll continue to do so, but also provide all of the downstream services as well. And if it looks as though the future is in mass transit, then we’ll think about getting involved in that, too. The last thing we should ever do is define ourselves as an automaker. Whatever form mobility takes, we want to lead it.”
“My sister told me the other day that I’m sounding more and more like a ’60s idealist. But there’s one big difference. In the ’60s we could see a lot of environmental problems emerging, but we didn’t have the solutions. Now the technologies are coming onstream so fast that the solutions really are in our grasp.” Unsurprisingly, campaigners have been pushing Ford to take a higher profile on issues such as global warming. A public statement from the chairman of one of America’s heartbeat companies would make waves that even the White House would find it hard to ignore. Ford is reluctant to be bounced. “I’ve told them I’ll do it when I’m ready. Because as soon as I did anything like that, the next question would be: ‘what is Ford doing about this?’ And if I can’t give a detailed road map then people are going to say that I am just blowing smoke. I want to deliver tangible stuff, not greenwash. I want to be sure that when I speak out, I’ve got all the weight behind me to back up what I’m saying.”
“But I have not been half as outspoken in the past as I intend to be in the future.”
Ford to the future
22 May 2001
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