Bill Ford: Few, if any, trade-offs in going green

LAGUNA NIGUEL, Calif.--The U.S. auto industry needs to "go green" in more than one way, says Bill Ford.

Ford is committed to making its vehicles more fuel efficient by investing in a number of technologies, including electrification, biofuels, fuel cells, and more efficient gas engines.

But auto manufacturing itself needs to be "reconsidered" so that it's not all about smokestacks and environmental hazards, Ford said Wednesday during a talk at the Fortune Brainstorm Green conference here. Ford, the great-grandson of Henry Ford, is the executive chairman of the company's board of directors.

"It's incredibly important to the economic vitality of the country that we make things here. But we won't make things the way we did in the past--we have to do it differently," he said.

Ford was personally involved in the creation of the Rouge River plant in Michigan, which uses a number of techniques to reuse water and use energy efficiently. Companywide, the corporation has targets for reducing its carbon dioxide emissions and water use, which has been cut 62 percent since 2000.

More broadly, Ford said that automakers need to recognize that their ultimate mission isn't just selling more cars and trucks. Instead, companies should investigate new ways of providing mobility to people, through car-sharing programs such as Zipcar, driver-less cars, and transportation services for city dwellers that combine taxis, private cars, and public transportation. He said he's even seen flying cars that work.

"The notion of shoving two cars in every garage in the world just isn't going to work," Ford said. "There's no question that mobility is changing with the urbanization of the world...We ought to not only embrace it but figure how we can move it along."

The good news for drivers today is that technologies now being adopted entail fewer trade-offs than they did in the past.

"It's a great time to be in this industry. There are all these awesome technologies coming," he said. "It used to be that if you wanted to be green, you had to make trade-offs. All this new technology is enabling a customer experience where they don't have to make any, or very, very few trade-offs."

Still, there are a number of infrastructure challenges to broad adoption of electric vehicles, biofuels, and hydrogen, which is one of the reasons that the U.S. should create a national energy policy, he said.

Specifically on battery technology, Ford said that the U.S. as a country should subsidize domestic auto battery manufacturing, which is predominantly done in Asia right now.

"I do think it's a defense issue if nothing else, but it's also really important that we are competitive as a nation in this critical technology. Other countries are supporting it and we should too," he said.

"You can be a purist and say 'Hands off, government. Let the companies go at it on their own.' But that's not the behavior we're seeing elsewhere and that will put us at a real competitive disadvantage," he said.

Biofuels still have legs
There's been a sharp increase in attention on electric vehicles over the past three years as lithium ion batteries have improved driving range and power. But Ford as a company is continuing its development of other technologies.

"As we (look to the) future (of) this industry, it's easy to say that it's going to be electrification. The question is the infrastructure and the time frame so until we get there, we can't stop improving other technologies," he said.

Ford plans to release an all-electric utility van, called the Transit Connect, this year and an electric version of its Focus sedan next year. It is also working on a plug-in based on its updated hybrid platform due in 2012.

Its strategy is to have hybrids throughout its line and have electric versions of its cars, which will give it greater flexibility to respond to demand. All-electric vehicles could be a good fit for city drivers while plug-in hybrids are likely better for people who know they need a longer driving range, Ford said.

But work continues on biofuels, diesel, fuel cells, and making its gasoline engines more efficient with its EcoBoost technology. Making the transition to new technologies requires that different industries, such as automakers and utilities, work together along with policymakers, Ford said.

"Henry Ford had an electric vehicle so it's back to the future," he said. "But it is going to require a level of collaboration across industries and with government that heretofore we haven't had in this country."