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Bill Ford Prods For Energy Policy: Do I Hear Gas Tax?

Posted by: David Kiley on December 16, 2008


DEARBORN,MI—Today, Ford showed some of the wares it will unveil next month at the North American International Auto Show. The details are embargoed until January. But I can say a few things, and the remarks of executives were all on the record.

First, I asked chairman Bill Ford (who is on Larry King Live tonight)if the low gas prices ($1.60 in Michigan) concern him given the investments the company is making in fuel economy.

“There is always that tension. As part of an energy policy going forward some thought has to be given to that [the low oil prices and the big investments being made to cope with toughening fuel economy standards]. If the desire is for greater fuel efficiency in this country, it’s got to be in the customer’s pocket-book interest to buy the vehicle. Whether it’s tax incentives for the vehicles, or a gas tax, or some kind of mechanism to align customer pocketbook decisions with society’s goals. I think that has to happen.”

CEO Alan Mulally said Ford is strategizing around oil being between $80-$120 a barrel, but said that was a price that would develop in step with a broader economic recovery. In other words, if the economy turns North in 2010, Ford is figuring oil prices to be in that price band for most of 2010-2012.

It could be a tough launch year, then, for the Ford Fusion and Mercury Milan hybrids. Despite having first-class mid-cycle upgrades and design tweaks, demand for hybrids is sinking along with gas prices. Look for Ford to make advertising hay anyway out of the fact that the Fusison Hybrid beats the Camry hybrid in fuel economy by five or six miles to the gallon.

Meantime, get ready for the attempted recharge of the Taurus brand. It is no secret that Ford will show a redesigned Taurus at next month’s show. No pictures or tech specs until January. But this car is terrific looking. Where the current Taurus suffers from having been designed like an appliance, the new Taurus is more akin to the European Ford Mondeo. The big question on everyone’s mind at Ford is whether people in sufficient numbers will banish the notion of the old rental-car Taurus from their minds and plunk down hard cash for a Taurus that is finally as good or better looking, inside and out, than any other full-size sedan on the market.

Reader Comments


December 17, 2008 12:27 AM

Don't believe a word from Bill Ford. After taking the helm in the 90s, Bill Ford stated one of Ford's goal is becoming an environmentally conscious company, ie manufacture "green" vehicles. What he didn't tell BW readers back then was his secret plan to emphasize monster SUV and bigger pickup trucks with gas guzzler dirty engines. His sins against the environment: Excursion, Expedition, Explorer, F250, F350, F450. Because of Bill Ford's transgression, Ford Motor is suffering in the current misery. Had Bill Ford kept his word, Ford would have beaten Toyota and Honda in building a mass produced hybrid. Born with a golden spoon in his mouth, Bill Ford knows nothing about the auto business let alone having any plausible vision of where Ford Motor should be headed. In his younger days, Bill Ford cleverly concluded he was entitled to hold a Ford corporate office. His dad told him he needs to work in the Ford auto part warehouse. Many years ago in a shareholders meeting, he even foolishly demanded a management position within Ford Motor Corporation. Fortunately, his no-nonsense dad intervened scold him and told him to shut-up and sit-down. Today, more than ever, Bill Ford needs to remember his dad's sound advice.


December 17, 2008 10:37 AM

Go to the Global Investment Watch blog to read a good article related to the topic of electric cars and the "engine" of the future...


December 17, 2008 1:32 PM

I agree with Bill Ford in increasing gas tax as a way to reduce fuel consumption. The country then can use this money for building better puplic transportation, providing heath care and fundind puplic projects. Meanwhile, we can reduce polution and be independent of foreign oil.


December 17, 2008 2:14 PM

A 38+ mpg Fusion. That would certainly be interesting.

Hugo van Randwyck

December 17, 2008 2:18 PM

David, maybe next time you could ask Bill Ford if he likes an incremental increase in gas taxes, say 10 cents every month, with the tax collected monthly into a separate fund, and refunded equally to Americans over 18? With about 10 billion gallons used every month, after 12 months, e.g. $1.20, it's about a $50 refund/month/person. As the price signal goes up, people have incentives to buy fuel efficient cars - petrol is approx $10 a gallon in Europe - and the government doesn't spend any of the tax, people choose, and free enterprise offers fuel efficient alternatives.

Paul (Vw)

December 17, 2008 9:05 PM

A gas tax at this point would probably be a good thing. OPEC is on the run, lets hit them hard.

If we can keep the price of gas over $3 a gallon (by way of revenue generating taxes), domestic use will continue to decline. I'd much rather have a tax on gas direct people to fuel efficient cars instead of having congressmen tell Detroit what cars to make. We all know what a smashing success CAFE standards were.

OPEC countries like Russia will cheat on their oil quotas (because they will be hard up for cash) which will further decrease crude prices...which in turn means more in taxes revenues without even having to increase the pump-price we pay.

For a well articulated position on this, see:

(Krauthammer was calling for a $4 price, I think that is a little high...but otherwise he makes a good argument)


December 17, 2008 9:51 PM

If you have a "gas tax" it should only be used for roads, nothing else. It should also be kept in a separate fund not mixed with the general fund.

If you think health care is important then each Americans should pay for it out of our income taxes, not a gas tax.

Public transportation should pay for itself.

I think energy independence is a catch phrase. Job loss to other countries is more of an issue.

Countries import oil to US
CANADA 2,055
MEXICO 1,254
IRAQ 575

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