Ford is in a financial crisis, and it has only itself to blame.
On Jan. 23, Ford Motor Company announced plans to hand out up to 30,000 pink slips to hard-working Americans and close 14 assembly plants in the next six years.
Ford's financial woes are not the fault of its workforce -- which has already done its share to help Ford by cutting health benefits.
What's at fault are the company's SUVs.
The biggest auto trend in 2005 was a shift toward fuel-efficient cars and away from fuel-thirsty SUVs. U.S. buyers are looking for cars that will deliver high gas mileage, allowing them some security from the record fuel prices that plagued 2005 -- and are likely to increase in the future.
At the same time, Toyota, maker of the hybrid Prius, witnessed a 13 percent rise in sales over the past year. The trend toward lighter, gas-sipping vehicles has given Ford's overseas rivals a growing share of the U.S. market. By as early as next year, Toyota may become America's top-selling automaker.
Americans are starting to realize that the price tag for our reliance on oil is becoming harder to ignore. In fact, 66 percent of Americans believe that buying a highly fuel-efficient car is patriotic, according to a March 2005 survey by Opinion Research Corporation. The percentage is slightly higher -- 67 percent -- among NASCAR fans. All this spells bad news for a company that still has the worst fleet-wide fuel economy of any U.S. automaker.
So far, Ford has not done nearly enough to create a more fuel-efficient fleet. Although it will increase hybrid production to 250,000 vehicles by 2010 -- the same number Toyota plans to sell this year -- the company is doing damage by increasing the size of its biggest SUV.
The new, tentatively named Ford Expedition EL (Extended Length) --referred internally as the Ford Everest -- will increase to a gargantuan 19.5 feet in length. That's about a 15-inch increase from the old Expedition.
Instead of laying off its workers, Ford should lay off these SUVs. It should pay attention to its core values, listen to the market and start making cars that today's more fuel-savvy consumer is likely to buy.
Ford must make serious steps toward improving its abysmal average -- at 19.1 miles per gallon -- that still has a majority of its fleet with a lower fuel-economy rating than the model-T did.
If Ford focused on improving its fleet-wide gas mileage to an average of 40 mpg in the next 10 years, the company could create 161,000 more U.S. jobs -- 40,800 in the automotive sector -- and increase profits, according to estimates in a 2005 report by the Union of Concerned Scientists.
Though some argue that hybrid technology is prohibitively expensive to develop, the long-term savings more than compensate for the research and development costs, and would save a net $23 billion dollars in the 10th year alone, the report finds.
What's more, the environment would benefit, and we would limit our dependency on foreign oil.
"We are acting with speed to … deliver the innovation customers demand and create a business structure for us to compete -- and win -- in this era of global competition," Chairman and CEO Bill Ford Jr. said during the recent announcement.
But it appears Ford is acting with speed only when it comes to eliminating jobs.
Meredith Dearborn is Peace Campaign Coordinator and Mike Hudema the Independence from Oil Director at Global Exchange (www.globalexchange.org). They can be reached at pmproj@progressive.org.