Posts Tagged ‘auto industry’

DANA POINT, Calif. — Have you driven a gas-guzzling planet-warming SUV lately? If so, it’s probably because gasoline prices have plunged in recent months and you’re more likely to trade up to a truck, Ford Motor Executive Chairman Bill Ford said Monday.

And he’s not happy about that.

“When gasoline went to $3.50 a gallon we saw a sea change in customer behavior,” Ford told Fortune Magazine managing editor Andy Serwer at Fortune’s Brainstorm Green conference in Orange County, Calif. “Now people are turning away from more fuel-efficient vehicles and taking the bigger vehicles.”

“I’ve been talking for five years now about the need for a gas tax,” he added. “We have to have some predictability on fuel pricing and that price signal has to be strong enough so customers” will continue buying smaller, fuel-efficient cars.” (Read more on Ford’s talk at Brainstorm Green.)

In other words, Ford Motor (F), General Motors (GM) and Chrysler won’t be able to kick their addiction to the profit margins that come from selling monster cars until consumers go cold turkey on cheap fuel.

Ford, who said he had been considered “something of a Bolshevik” in the auto industry for his early embrace of electric cars, said Detroit needs a floor under gasoline prices so it can make investments in alternative fuel vehicles.

“The worst thing for us is instability,” he said. “We need a much more stable planning horizon. That’s not just true for gasoline but for any fuel we use.”

Ford noted that when he joined the Ford board two decades ago he was told to stop “consorting” with suspected environmentalists. Times have changed in the car business.

“We haven’t had a lot of revolutions but boy are we now. I love it.”

Follow the Brainstorm: Green conference on Twitter at twitter.com/greenwombat and twitter.com/marcgunther.

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