Ford commits to fuel efficiency . . . in the UK

John Dimsdale Jul 17, 2006

Ford commits to fuel efficiency . . . in the UK

John Dimsdale Jul 17, 2006

KAI RYSSDAL: Oil prices fell more than 2 percent today. Relief, if you can believe it, that things haven’t gotten worse in the Middle East. Still, though, we suspect the stratospheric cost of gasoline is behind this next item. Ford announced a major commitment to more fuel-efficient cars today. But the nearly $2 billion the company will spend won’t go into the US economy. Marketplace’s John Dimsdale reports Ford has chosen to go green . . . over there.

JOHN DIMSDALE: Ford will sink 1 billion British pounds — nearly $2 billion at today’s exchange rates — into developing cars that run on biofuels and ethanol, as well as new technologies for hybrid gas/electric motors.

DAVID HEALY: Well, finally, I think it’s the real thing.

David Healy, an auto analyst for Burnham Securities, says it’s about time an American carmaker made a significant commitment to saving gas and cutting pollution.

HEALY: Up to now, Ford has been playing green PR with their single hybrid which will, you know, if they’re lucky, account for half of 1 percent of the company’s worldwide vehicle sales this year.

Healy says due to a lack of demand from their domestic customers, American carmakers are behind in the development of green vehicles. Ford’s research into hybrid technology, for example, fell behind Toyota’s. Toyota snagged all the patents, which meant Ford had to pay royalties for the hybrid SUVs it’s selling now.

Why is Ford making this investment in Britain? Automotive consultant Phil Gott with Global Insight says think race cars.PHIL GOTT: The British have always been terrific innovators. A lot of technology developments have come out of Great Britain in terms of motor sports. If you want to build a winning race car which has to be on the leading edge, you go to Britain.

Ford’s goal is to develop a Ford Focus that cuts carbon dioxide pollution and gets 70 miles to a gallon of gas.

In Washington, I’m John Dimsdale for Marketplace.

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