Ford plans SUV redesign to increase fuel economy

The move is an effort by the nation's No. 2 automaker to meet the concerns of customers and environmentalists.

By Compiled from Times wires

© St. Petersburg Times, published July 28, 2000

WASHINGTON -- Ford Motor Co., betting it can please environmentalists and consumers, will redesign its profitable and popular gas-guzzling sport utility vehicles to make them more fuel efficient.

The country's No. 2 automaker intends to increase the fuel economy of its SUV fleet by 25 percent, from 18 miles per gallon to 23, by 2005. Ford does not plan to raise sticker prices to meet its goal, confident that demand will offset higher production costs.

"SUV customers are asking for more fuel-efficient vehicles," Ford president and chief executive Jac Nasser said Thursday during a speech at the National Press Club.

"The average consumer will save $2,400 in fuel costs over the life of their vehicle and save 80 trips to the gas station," Nasser said. "They'll save enough fuel to go around the globe 11/2 times."

While dramatic, Ford's plan falls short of the kind of fuel efficiencies environmental groups and their congressional supporters have wanted for nearly a decade. And Ford isn't committing, for now, to increase the fuel economy of top-selling pickups and minivans. They would be included in any mandated increase in federal fuel economy standards for trucks.

But Ford is committed to boosting the gas mileage on the Excursion,

[AP Photo] Ford said it will increase the fuel economy of its SUV fleet, including the Excursion, above, by 25 percent over the next five years.

the company's biggest sport utility -- so big that it is exempt from the federal fuel economy standard for light trucks.

Ford officials say they will improve fuel economy mostly by using advanced technology on the SUVs it already sells -- reducing weight, improving aerodynamics and making engines and transmissions more efficient.

And Ford has at least one environmentalist group in its corner. In a shift, the Sierra Club applauded Ford's plan.

"We take them at their word that they are committed to doing this," said Daniel Becker, director of the club's global warming and energy program. "But I hope General Motors and DaimlerChrysler will take up the challenge on their own."

SUVs have been one of the fastest-growing segments of the market, making up about 19 percent of new vehicle sales. They also are among the most profitable, with some carrying profits up to $15,000 per vehicle.

SUVs' popularity is so strong that sales in the Tampa Bay area continue to flourish despite the recent climb in gas prices. Autoway Ford in St. Petersburg sold 220 SUVs from April to June, versus 197 from January to March.

"If a customer can afford a $35,000 vehicle, I don't know if they would really let the fluctuation of gas prices stand in the way of purchasing," general manager Brian Smith said.

Ford has made the decision easier for customers by lowering leasing rates. "Incentives have a lot to do with it," Smith said. "We just beg and whine for more of them." On the surface, Ford's plans seem to contradict the lobbying campaign it and other automakers waged to block any increase in the Corporate Average Fuel Economy, or CAFE, program.

The program requires automakers to sell a fleet of trucks that, on average, get 20.7 miles to the gallon. In the early 1990s, the Clinton administration tried to push through an increase, but automakers lined up support to block that move.

Since then, the car companies and their congressional supporters have inserted language into the annual Department of Transportation appropriations bill to stop the agency from even studying a CAFE increase.

But Nasser said Ford's plan is consistent with the company's view that CAFE needs to be dumped. "CAFE is a flawed policy. It's bad for our customers."

Ford's competitors greeted Nasser's announcement by pointing out that their vehicles already have higher fuel efficiency.

"We're delighted. We welcome the competition," said Earl Quist, spokesman for Toyota Motor Co.

- Information from Times staff writer Scott Barancik, the Associated Press and Knight Ridder Newspapers was used in this report.

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