Examiner Editorial: Ford on a roll after spurning federal bailout 

Automakers from around the world gathered in the Motor City this week for the North American International Auto Show. The annual event used to be a very big deal because the U.S. was the largest auto market in the world. But now that China has eclipsed the U.S. as the most important market, and only Ford remains healthy among the once-mighty Big Three, the Detroit show has lost much of its luster. But that doesn’t prevent top auto executives from using the gathering as an opportunity to make statements designed to influence customers and politicians alike. Sometimes, though, their statements say as much or more about them as they do about their industry’s positions on great public policy issues.

Take, for example, Government Motors’ product czar Bob Lutz, who complained to journalists Monday about the fickleness of American consumers: “Every time gas prices go back down, everybody starts buying big stuff again. Gas prices go up a buck, the big stuff is unsellable and everyone wants small cars. Go figure. It’s like the collective memory is about three weeks long. We can’t run a business that way.”

While nobody who has ever run a business would deny the difficulties created by inconsistent or unpredictable federal red tape, the alternative solution favored by Lutz doesn’t make much more sense. He favors “a gradual increase in the federal fuel tax of 25 cents a year, which in my estimation would have the benefit of giving automobile companies a planning base, and giving families that own vehicles a planning base.”

While this might make it easier for car companies to plan their lineups, there is another side to the Lutz proposal. Higher gas costs would force consumers to buy more fuel-efficient vehicles, thus boosting sales of cars like the Chevrolet Volt electric plug-in appearing in dealer showrooms later this year.

Then there is Ford America president Mark Fields, whose company declined last year to join GM and Chrysler in hogging down billions of federal bailout tax dollars. Ford sales are up, especially for its Fusion sedan and Escape compact SUV. Ford’s Fusion Hybrid was just named Car of the Year by journalists covering the Detroit event, and more new products coming this year and next promise the best overall fuel efficiency and cleanest emissions in company history. But demand is way up for Ford’s Expedition and Lincoln Navigator SUVs, so production is ramping up for those models, too. The company’s stock value has quadrupled in the past year — 55 percent just since November. There is a lesson there for politicians.

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Staff Report

Staff Report

A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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