A Nov. 23 Business article on a speech by Ford Motor Co. Chairman William C. Ford Jr. mischaracterized his comments on a proposed energy summit with the White House. Ford never said the White House had agreed to host the meeting, and one has not been scheduled. (Published 12/1/2005)
Ford Motor Co. Chairman William C. Ford Jr. urged the government yesterday to help struggling U.S. automakers by expanding subsidies for companies that make components for hybrids and other fuel-efficient vehicles, as U.S. automakers race to close a widening technology gap with the Japanese.
In a speech at the National Press Club, Ford asked for more incentives, such as tax credits, to prod consumers to buy hybrids and other vehicles with fuel-saving technology. He also asked Congress for money to retrain workers, and to consider tax incentives to help manufacturers outfit old plants with new equipment. In the speech, Ford said a national strategy is needed to respond to the pressures of globalization, which he called the "economic challenge of our time."
After the speech, Ford planned to meet with economic officials at the White House yesterday, including Allan Hubbard, the White House's adviser on economic policy. Ford said he expected to talk about conditions in the industry and to plan a summit on energy issues that he said the White House has agreed to hold.
Ford and other U.S. auto executives are under intense pressure as automakers lose market share and embark on one of the most difficult periods of industry restructuring in years. On Monday, General Motors Corp. chief executive G. Richard Wagoner Jr. announced 30,000 job cuts and a dozen plant closings by 2008, slashing the workforce of the world's largest automaker by more than 20 percent.
Last month, Ford -- the nation's No. 2 automaker -- reported a $1.2 billion third-quarter loss in its North American division. Ford plans to detail a restructuring plan of "significant" plant closings and job cuts in January. Delphi Corp., a major auto parts supplier for Ford and GM, filed for bankruptcy protection last month.
Ford first called on the Bush administration to hold a summit on energy and automotive technology issues in October. Ford said the billions of dollars that U.S. automakers pay in health care and pension costs are unfairly weighing down the companies, making it difficult to compete.
Ford and other Detroit automakers have not asked the government to pick up those costs. Instead, Ford wants Congress to increase tax credits for research and development to support companies that make advanced technology for vehicles. Ford said the investment from Congress is needed to help build a U.S. supply base for parts for hybrid cars and trucks, especially hybrid batteries. He said the United States is trailing Japanese automakers in hybrids partly because the Japanese government offered subsidies a decade ago to help the industry grow.
In an interview following the speech, Ford said his company is not looking for a bailout from the federal government. "We're just looking for our government to help us," Ford said.
"We can compete with Toyota, but we can't compete with Japan," he said.
A spokeswoman for Toyota said the automaker developed its hybrid vehicles without Japan's help. She said the company's success was based on building products that consumers want to buy.
Congressional staff members say it is not clear yet where a consensus on an aid package for the auto industry might lie, or if lawmakers in states and districts without significant auto operations will ever sign on to help.
Congressional staffers also say that Republican lawmakers are philosophically divided about whether the industry should be propped up or allowed to sink. The last time the government stepped in to stabilize an automaker was the Chrysler bailout of the late 1970s. Under an agreement, the government gave Chrysler $1.2 billion in loan guarantees. The company repaid the loans ahead of schedule.
David E. Cole, chairman of the Center for Automotive Research, who met with Michigan lawmakers last week, said there is no easy solution for the industry's problems.
"The idea that there is some form of magic bullet that could have a major impact -- something that would have a major impact -- just doesn't exist," Cole said.
Faced with the potential of thousands of job losses, Sen. Hillary Rodham Clinton (D-N.Y.) and Michigan Gov. Jennifer Granholm (D) have also called for national strategy to deal with the auto industry's difficulties.
Sen. Barack Obama (D-Ill.) has introduced legislation that he calls "health care for hybrids" that would assume certain health care costs for the industry in exchange for a commitment to build hybrid vehicles.
The Michigan congressional delegation met last week on a package aimed to help the industry. As a result of the meeting, Reps. Sander M. Levin (D) and John J.H. "Joe" Schwarz (R) have been paired and dispatched to work on a health care proposal to assist automakers.
Rep. Candice S. Miller (R-Mich.) said a deal to support the auto industry is a tough sell to other members. But the bad news out of Detroit could be seeping in. "This latest announcement from GM certainly has reverberated throughout the nation," she said. "Many people thought that Delphi was a Michigan or maybe an Ohio problem. Now they are hopefully beginning to see that not all the cuts are coming out of Michigan."