U.S.

For Carmakers, Green Means Go

By CBSNews.com staff CBSNews.com staff

May 12, 2000 / 10:51 AM EDT / CBS

Aware that the SUV fad may be coming to an end, carmakers are developing engines that pollute less and burn less fuel, even before customers know that's what they want, CBS News Correspondent Jacqueline Adams reports.

That's why Ford Motor Company's revelation this week—that sport utility vehicles (SUVs) are are gas-guzzling polluters and a threat to the safety of people in smaller cars—was not a surprise to auto industry analysts.

Ford made the admission to its stockholders Thursday, in a book handed out to shareholders at its annual meeting, CBS News Transportation Correspondent Bob Orr reported.

In the 98-page volume, Connecting With Society, Ford admits that "with a few exceptions, its products are not industry leaders in fuel economy."

The book even quotes a Sierra Club press release that says "the gas-guzzling SUV is a rolling monument to environmental destruction."

At the same time, the company promised to keep building the big money makers.

In Yonkers, New York, Saturday, few customers buying sport utility vehicles could see the logic in William Ford's admission that his most profitable SUVs, like the Expedition, have serious safety and environmental problems.

"I can go to GM," said Jane Williams. "They'll be glad to take my money."

Some dealers, though, are beginning to sense that the sport utility fad may have run its course.

"Your SUV rage is about 10 years old now. Every year, the more and more they produce, the more and more they sell," said Dwight McGuirk, who owns Smith Cairns Ford in Yonkers. "At some point, you have to reach a saturation point."

McGuirk thinks that point may have been reached, and that may be exactly why Ford made the disclosure, industry watchers say.

"It's incumbent on them to be on top of the next fashion," said Micheline Maynard, an author and journalist. "The minute they sense sport utilities are not popular or not as popular—and that's what they sense now—it's going to be okay to dump on sport utilities."

In fact, car makers have begun to slow production of the Jeep Grand Cherokee. Inventories are higher than usual, and for the first time ever, you can get a deal on a new Chevy Blazer, or a Ford Explorer.

In their place, car makers already begun to tout newer, smaller hybrids.

At the Detroit Auto show this winter, GM showed off its futuristic Chevy SSR, a cross between a sports car and a truck. And Daimler Chrysler's tiny PT Cruiser created a frenzy when it debuted last month.

Still, some cynics say Ford is merely throwing a bone to environmentalists and federal regulators.

"What you really have to look at at the car companies is not what they say but what they set up their factories to build, and Ford is not dialing back production of SUVs," said Csaba Csere, editor-in-chief of Car and Driver.

Ford's SUVs were the major engine behind he company's record profits of $7.2 billion last year; some models can carry profit margins of nearly $15,000. It’s no wonder, then, that Ford wants to clean up its SUVs, rather than clear them out.

"We think we can improve highway safety. We think we can improve their environmental performance," says Helen Petrauskus, a Ford Vice-President.

That won't be easy without reducing the size of vehicles deliberately built and sold as big and tough. But after Ford's concession, environmentalists now want action.

"The auto industry, until yesterday, has been ignoring the pollution and the safety problems that they caused," says Daniel Becker of the Sierra Club. "If Ford is actually breaking from that, then it's a big change in attitude of the auto industry."