Ford, leaner and greener

WAYNE, Michigan – Ten years ago, the Ford Motor plant here churned out giant Expedition and Navigator SUVs that got 5.10 kilometres to the litre – and it was one of the most profitable auto factories in the world.

Today, after a $550 million renovation, the 57-hectare plant is a symbol of a very different Detroit: a greener, leaner industry focused on smaller, energy-efficient cars. The factory will now build Ford’s newest compact car, the Focus, in four different and progressively more fuel-efficient versions, including an all-electric one that will be unveiled this month and go on sale this year.

Although the transformation has been a long time coming, Ford and rest of the domestic auto industry appear to be finally giving up their addiction to gas-guzzling trucks and sport utility vehicles. Prodded first by rising federal fuel economy standards, then shocked in 2008 by $145-a-barrel oil and a global credit crisis that forced General Motors and Chrysler to seek federal bailouts, Detroit is making a fundamental shift toward lighter, more fuel-conscious cars – and turning a profit doing so.

Japanese automakers still hold a lead in overall fuel economy, and Toyota, despite its recall troubles, remains the top seller of hybrids with its Prius.

But Detroit has closed the gap significantly. Last year, passenger cars made by Ford and GM averaged more than 12.75 kpl, according to federal rankings, compared with 18.70 kpl a decade ago.

GM began delivering a plug-in electric hybrid, the Chevrolet Volt, in December, and the company will show off a new compact Buick sedan at the Detroit auto show. It is expected to get 21.26 kpl in highway driving, a far cry from the lumbering Buick Roadmaster of the past.

Of course, many U.S. consumers have yet to give up their affection for larger vehicles, and the domestic automakers still rely on light trucks and SUVs for a large share of their profits. But the huge, 3,629-kilogram land yachts of yore have given way to slimmer so-called crossover vehicles that have less powerful engines but can still hold seven people.

With oil prices once again trading around $90 a barrel and gasoline topping $3 a gallon, the U.S. auto companies are pushing hard to accelerate their green transition. GM’s new chief executive, Daniel F. Akerson, has told his product executives to plan for oil at $120 a barrel and gasoline at more than $4 a gallon, according to company insiders.

The Obama administration is also nudging the industry along with money for cutting-edge auto technology. The Energy Department has made nearly 50 grants worth $2.4 billion for research and manufacturing. GM alone received $241 million, most of it related to the Volt.

Ford, which avoided the disruptions of bankruptcy that befell GM and Chrysler in 2009, is further ahead than its hometown rivals in overhauling its fleet, and it is eager to get that message out.

This month, it unveils the all-electric version of its Ford Focus – its answer to the Nissan Leaf and Chevrolet Volt.

By 2012, the Focus compact will be available to buyers in four versions: gasoline-powered, conventional hybrid, plug-in hybrid and fully electric. All will be built in the Wayne plant, which can easily change the mix of vehicles produced.

Sceptics concede that the domestic companies have narrowed the gap in fuel economy with Japanese automakers but say that the U.S. automakers need to extend their advanced gas-saving technology to all of their models.

Ford still sold nearly twice as many light trucks as cars in 2010 in the United States. But the vehicle size and mileage of its overall fleet of products have changed substantially.

Its best-selling SUV last year was the smallest in the lineup, the compact Ford Escape, which gets 9.78 kpl and is available as a gas-electric hybrid that gets 13.60 kpl. A decade ago, the iconic Ford Explorer was the industry’s top-selling SUV at 6.38 kpl. (Ford just revamped the Explorer and improved its gas mileage by 25 percent.)

The company is also offering its first full-size pickup with a smaller, turbocharged engine instead of a traditional V-8. And once its big sedans like the Crown Victoria are discontinued, Ford’s largest passenger car will be the medium-size Taurus.

Analysts say that the auto industry’s big investments in electric and plug-in models will not pay off for some time in the marketplace but represent an attempt to gain an important foothold with environmentally conscious consumers.

Last year, hybrid sales fell 8 percent and accounted for just 2 percent of the overall domestic sales, of 11.6 million vehicles.

Far more important to reducing the nation’s fuel consumption are the industry’s efforts to make gasoline-powered cars and trucks more efficient.

“The domestic automakers have done a terrific job of catching up to some of the technology that’s been available, such as direct fuel injection,” Baron said. “Those technologies can get 30 percent improvements in fuel economy, but there is a limit.”

Even if consumers are not necessarily ready to buy hybrid and electric cars in big numbers, the carmakers say there is no turning back on their efficiency drive. New federal standards will require a fleet average of 15.30 kpl by 2016. That is a 30 percent improvement from the 11.48 kpl required for the 2011 model year. “Are we going to stick with improving fuel economy? You don’t have a choice,” Akerson of GM said. “The government has told us what we have to do, and we will meet those goals.”