Ford to Expand 'Green' Offerings

Ford to Expand 'Green' Offerings
January 11, 2005

Joseph Bast

Joseph L. Bast c.v. Joseph Bast is president and CEO of The Heartland Institute, a 29-year-old... (read full bio)

Dear Editor:

Today's Chicago Tribune carries a story titled "Ford to expand 'green' offerings" that darkly warns that GM and DaimlerChrysler are falling "further behind in hybrids ... Hybrid sales in the U.S. topped 80,000 last year, but GM contributed only 500 of the full-sized pickups to the total and DaimlerChrysler none." Ford, on the other hand, is cheered for announcing that it would increase the number of hybrid models it offers during the next three years from 3 to 5, though Ford declined to predict how many vehicles it would produce sell.

More interesting than the author's attempted spin, though, is what else the article says. It says J".D. Power and Associates projects sales [of hybrids] could reach 222,000 this year and top 500,000 or nearly 3 percent of sales, by 2010."

Only 3 percent of sales by 2010? Should GM and DaimlerChrysler be criticized for not competing hard enough for a niche product that "could" reach "nearly 3 percent" of sales in 5 years? Given frequent reports that Toyota and Honda lose money on every hybrid they sell, and Detroit likely loses even more, it would seem prudent for GM and DaimlerChrysler to hold off entering this market until costs come down and performance improves.

The always plainspoken Robert Lutz, vice chairman of GM, is quoted saying: "There's a small, fanatic group of West Coast intelligentsia that wants to document their environmental consciousness with a hybrid so they can say, 'Look at me, I'm green.'" Lutz also described GM's plans to introduce hybrid versions of the Chevy Tahoe and GMC Yukon in 2007.

Lutz is right on. There may very well be a place for hybrids in the future of car and truck propulsion in the U.S., and the market will reward the companies that make the best products at affordable prices. But right now, interest in hybrids is driven more by myths about the environment and regulations in California than real consumer demands. Until that changes, car companies are wise to avoid making too big a commitment in the latest technological fad.

Joseph L. Bast

President, The Heartland Institute

Chicago, Illinois

Editor: Joseph L. Bast (jbast@heartland.org) coauthored a 2000 report for The Heartland Institute on the "Increasing Sustainability of Cars, Trucks and the Internal Combustion Engine." It can be downloaded from http://www.heartland.org/PublicationIssue.cfm?pblId=3&pisId=262.

Joseph Bast

Joseph L. Bast c.v. Joseph Bast is president and CEO of The Heartland Institute, a 29-year-old... (read full bio)