CEO: Ford to Have Full Lineup in 2020

Business Materials 4 December 2007 05:26 (UTC +04:00)

( AP ) - Ford Motor Co. plans to offer a full line of vehicles, including trucks and sport utility vehicles, in 2020 despite tougher federal fuel economy regulations likely to take effect that year, Chief Executive Alan Mulally said Monday."Our commitment is to improve the fuel efficiency of all the vehicles no matter what the size," Mulally said after signing a new four-year contract with the United Auto Workers.

The auto industry's fleet of new cars, sport utility vehicles, pickup trucks and vans will have to average 35 miles per gallon in combined city and highway driving by 2020, according to the agreement that congressional negotiators announced late Friday. That compares with the 2008 requirement of 27.5 mpg average for cars and 22.5 mpg for light trucks. It would be the first increase ordered by Congress in three decades.

The commitment may be difficult for Ford, which doesn't have a single vehicle in its 2008 model year lineup that meets the new standards.

Its most efficient vehicles, the Escape and Mercury Mariner hybrid sport utility vehicles, get 32 mpg in combined city/highway driving. And the company has many truck-based vehicles that get relatively poor mileage. A V-8 powered Expedition large SUV, for example, gets 12 mpg in the city and 18 on the highway.

"I think it'll be a challenge for them. But it's not impossible," said Bruce Belzowski, assistant research scientist with the University of Michigan's Transportation Research Institute.

He said the difficulty of complying with the new standard in 12 or 13 years depends a lot on details in the bill that have yet to be released, including credits for alternative fuel use and how much car and truck mileage can be considered individually.

Majority Democrats plan to include the requirement in broader energy legislation to be debated in the context of $90-per-barrel oil, $3-plus gasoline prices and growing concerns about climate change. The House plans to begin debate this week.

But Sen. Carl Levin, D-Mich., says the measure still must wind its way through both chambers as part of the larger energy bill.

"It's up to the leadership on whether or not the bill can be called up in a few weeks," Levin said Monday at an appearance in Detroit. "The Senate is a place where you can add amendments. In the Senate, they always have the right to raise issues. They don't have the kind of limits we have in the House."

Levin said other issues include how excess profits of oil companies will be used and the standards of alternative energy use by utilities.

Environmentalists have sought stricter gas mileage standards for years, saying that is the most effective way to curb greenhouse gas emissions and oil consumption.

The energy bill will help accelerate plans by automakers to bring more fuel-efficient technologies to conventional engines and alternatives such as gas-electric hybrids and vehicles running on ethanol blends. For the first time, for example, manufacturers will receive credits for building vehicles running on biodiesel fuel.

Domestic automakers and Toyota Motor Corp. vehemently opposed a Senate bill passed in June that contained the same mileage requirements and timeline. They warned the measure would limit the choice of vehicles, threaten jobs and drive up costs.

The companies backed an alternative of 32 mpg to 35 mpg by 2022.

Belzowski said the new standards will make automakers move quickly in coming up with more efficient powertrains, including hybrids, diesels and fuel cell vehicles. In many cases, they are looking at only one or two engine life cycles before the new requirements take effect, he said.

"It really creates a sense of urgency for the manufacturers because not only do they have the regulatory hurdles to go over, but they have the technological success hurdles," he said. "If they can't figure this out, they'll go down."

Ford Executive Chairman Bill Ford said Monday it will be a stretch to meet the 35 mpg standard but he is confident Ford can do it.

"We have to do it, and we have the best people in the industry getting ready to do it," he said.