06/01/2007

Auto industry slow to react to challenges, Ford says

By JOHN FLESHER

Associated Press Writer

MACKINAC ISLAND, Mich. (AP) -- The domestic auto industry is paying the price for reacting sluggishly to foreign competition and rising demand for environmentally friendly vehicles, Ford Motor Co. Executive Chairman Bill Ford said Thursday.

"Our industry is restructuring, causing plant closings, layoffs, rising unemployment and a falling tax base," Ford said in a speech during the Detroit Regional Chamber's annual Mackinac Policy Conference, a gathering of 1,700 business, political and civic leaders.

"At the same time, legitimate concerns about global warming, energy security and the cost of gasoline have created a rush toward arbitrary and poorly conceived solutions."

Ford said he had warned about the "relentless onslaught" of foreign-made cars and other problems plaguing U.S. automakers when addressing the Detroit chamber four years ago.

"Unfortunately, my concerns were well founded," he said. "Collectively, we didn't move fast enough. Much of what I warned about then is happening now."

The good news is the industry and others relying on it are paying attention, he said.

Ford said many in auto manufacturing regarded him as a "crazy radical" years ago for associating with environmental groups and talking about green issues.

"Today, with climate change, soaring gas prices and billions of potential new customers waiting in developing markets, people finally understand that environmental sustainability is the critical issue for our future growth and prosperity," he said.

Ford said he was pleased with his company's projects such as the Ford Rouge Center, a brownfield reclamation project, and its development of the Escape Hybrid SUV. "My only regret is that we didn't move further, faster," he said.

Domestic automakers are investing billions in technology to reduce carbon dioxide emissions that contribute to global warming, but the industry produces only 20 percent of U.S. output, Ford said. What's needed now is a national energy policy and a forum for bringing together other carbon emitters to come up with solutions, he said.

For Michigan, research and development of solutions to climate change is a big economic opportunity, he said.

"We have the assets to transform ourselves into a leading research and development center, including the intellectual capital, a skilled workforce and a first-rate higher education system. Why not take advantage of those assets to help preserve traditional jobs and create the next generation of high tech jobs?"

Fielding questions from the audience, Ford said reforming health care was crucial for automakers and other manufacturers - a recurrent theme of the conference.

"It's a broken system," Ford said. "If we don't solve it, it will be hard to produce anything in this country."

Rep. John Dingell, chairman of the House Energy and Commerce Committee, said automakers had been too lethargic in dealing with health care and trade issues and too timid in seeking action from the White House. The companies should line up behind specific solutions and demand progress instead of simply complaining about their problems, the Dearborn Democrat said.

"They sit around and moan and mope but don't do anything to help themselves," Dingell said in an interview. "It's time for the American auto industry to stand up for itself."

Sen. Debbie Stabenow, D-Mich., said the Senate Democratic Steering Committee would sound out automakers, other manufacturers and labor unions at a meeting in Washington, D.C., next Wednesday.