President Obama isn’t the only high profile American to have travelled over to this side of the Atlantic for a bit of a PR tour lately. Bill Ford has been in Britain to celebrate Ford’s UK centenary. Ford doesn’t make cars here any more, but it does make lots of engines and has long been the car market leader.
Mr Ford popped up in the national media here and he had some interesting things to say about Ford and also the situation of the automotive industry in general. It was his remarks on the industry in general that stood out for me. As car companies, Ford included, charge into the emerging markets where all the demand growth currently is, Bill Ford is one of the few auto industry execs who seems to question where this is ultimately going to end up. This doesn’t look like an auto industry exec simply paying lip service to a sense of corporate social responsibility, as some cynics may charge. Mr Ford, it seems to me, has a bit of vision and the interests of Ford shareholders at heart.
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Ford Motor Company is not only going about the business of selling cars for a profit today; it is also positioning itself for a transportation future in which car ownership growth – that relentlessly expanding global industry pie that has always yielded more new and replacement sales – will face significant constraints. With 800m vehicles on the road globally now, Mr Ford warns of ‘global gridlock’ and helpfully points out that were there to be 3bn vehicles on the roads by mid-century there will be a very pressing question that will be impossible to ignore: where are they going to go?
One goal for FoMoCo is to improve the product to help mitigate any socially negative impacts, environmental or otherwise, while still delivering pleasure and enhancing our lives. For the car company there are some clever things being done or potentially to be done that can alleviate the socially harmful impacts of vehicles – for example with cleaner powertrain technologies, recycling and with connectivity that enhances efficiency in use. Mr Ford is right, of course, to say that a car company needs to push the envelope on product development and investment to be competitive. And Ford, like others, has a strategy in place for emerging technologies.
But he is also right to call for a partnership of industry and governments to address the wider issues of transportation policy and creating the right infrastructure to get an outcome that is in all of our best interests (‘socially optimal’, I suppose). That is not inconsistent with wanting to sell more cars, either because ‘business as usual’ won’t continue unfettered indefinitely; car markets change as motorisation rises (look at what is happening already in congested Beijing and Shanghai).
The important point is that the environment in which the industry operates is constantly changing; rising car ownership levels come with consequences and responsibilities that don’t end when the car leaves the factory or forecourt. It makes good business sense to think these things through and the car industry should strive to be at the heart of the evolving debate and discussion about transportation and exactly where the car fits in. For a car company that wants to be around in decades to come, it’s not quite as simple as build good cars and then sell ’em, even if that’s what dominates the short-term and this year’s results.
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By GlobalDataRefreshing candour from Bill Ford.
