Roland J. Hwang is director of vehicles policy at the Natural Resources Defense Council.
He announced a plan to remake his company as an environmental innovator, and, in a twist worthy of novelist Tom Clancy, he sent a letter to President Bush in which he asked the president to help the auto industry find solutions to our nation's dangerous dependence on oil.
Both Washington and Detroit sorely need Bill Ford's leadership at this critical time. As public pressure mounts on Congress to take action, opportunities exist for his industry to team up with Washington to find solutions that also can make Bill Ford's company more competitive.
Not since the oil crises of the 1970s has it been so urgent that we cut our use of oil. Gasoline at $3 a gallon, hurricanes and the war in Iraq have shaken to the core the once firm belief that cheap, secure gasoline is Americans' birthright.
A growing chorus -- with hawks and doves, Republicans and Democrats, Red states and Blue -- is acknowledging what many experts have been saying for some time: An energy policy that relies simply on increasing supply and remaking the Middle East politically puts our economy and national security at risk. In the cross hairs are tens of thousands of well-paying Big 3 jobs.
As a result of this summer's rise in gasoline prices, political leaders on both sides of the aisle are finally beginning to recognize that something must be done.
The energy bill passed by Congress and signed by the president before the hurricanes disrupted the flow of gasoline did nothing at all to fix the problem and may even have made it worse by extending the "dual-fuel" loophole. Not much more can be said for the proposed light-truck fuel economy standards.
Big 3 are hurting
But since gasoline prices spiked, even top Republicans are waking up to the problem. According to New Mexico Sen. Pete Domenici, chairman of the Senate Energy and Natural Resources Committee, "I believe we must take another look at the CAFE standards."
The Big 3 are fighting for survival. As the bottom drops out of the once-profitable large SUV segment, Ford and General Motors are suffering. Those automakers and the Chrysler group are discovering that fuel economy is no longer about corporate social responsibility; instead, it's a matter of corporate life and death.
The penalty for the Big 3's becoming the industry's permanent laggard on fuel economy was illustrated in a recent report by the University of Michigan Transportation Research Institute's Office for the Study of Automotive Transportation and the Natural Resources Defense Council.
Called "In the Tank," the report showed that the Big 3 and Midwest workers are at a major competitive disadvantage when faced with sustained high gasoline prices. Big 3 market share, billions in profits and hundreds of thousands of auto-related jobs are at risk, the report said.
Part of the challenge for the Big 3, of course, is their significant health care and pension costs -- as high as $1,500 per vehicle -- which their import-badged competitors do not face. Tough problems demand innovative solutions.
That's why the National Resources Defense Council helped develop a proposal to create a trust fund that automakers could use to offset those costs. In return, participating automakers would have to reinvest about half the resulting savings in American factories engaged in manufacturing fuel-efficient technologies.
But even with eloquent champions of the program such as Sen. Barack Obama, D-Ill., do we really have the political will for the $10 billion appropriation necessary to fund that program?
It is not without precedent. The government has intervened to help railroad workers, mine workers, the airline industry and Chrysler Corp.
No cheap answers
No one can predict gasoline prices with certainty. Pump prices could conceivably drop back to $1.50 a gallon. Or they could rise even more. We do know that the petroleum supply system is stretched wafer thin at every step from wellhead to gas tank, and there do not appear to be any fast, cheap or easy solutions on the supply side. And in the futures market, a barrel of crude still hovers around $60 for delivery five years from now.
That makes wagering on the return of low oil prices an increasingly dangerous proposition. Detroit must learn quickly how to compete in a market in which fuel economy matters or resign itself to a much diminished future -- perhaps even disappearing altogether.
While one automaker cannot solve this problem alone, a visionary auto leader is needed to break through the gridlock in Washington.
That brings us back to Bill Ford. His letter to Bush suggests that Washington and Detroit finally might open a useful dialogue on fuel economy. All the ingredients are in place. It's time to get rolling.