There are essentially two world auto industries: a North American industry, which prefers trucks like the Ford F-150, and the rest of the planet, which prefers to drive sub-compact, high fuel-economy cars.
About 1 billion of the world's 6.5 billion people currently have access to a car or truck, and international sales have the potential to double, if not triple, as more people seek similar access. But the F-150 is an unlikely source for any sizable world increase in market share. In most developing nations, such growth will evolve from a car that sells for $8,000, not $20,000. And it almost certainly won't come from a car developed in Michigan.
While there will always be a global market for luxury cars and specialty light trucks, U.S.-engineered vehicles aren't the right products to meet emerging market demands. This has major implications for our Southeast Michigan economy, where we have an incredible corps of 50,000 or 60,000 engineers expert in American-style large vehicles. American automakers must find a way to make a profit on compact cars if they want to remain competitive at home and expand in global markets.
U.S. consumers have always valued vehicles with power and space. Ford needs to develop something that will give drivers muscle and room, alongside fuel economy. Unless the price of gas spikes above $3 a gallon, it's unlikely we'll see a major shift away from the larger vehicles.
The problem, ultimately, comes down to vehicle choice. If you want to significantly improve fuel economy, you have to get people to climb out of their trucks and back into medium-sized and compact cars.
The irony of all of this is that we don't actually need new auto technology to save gas. There are plenty of more efficient vehicles sitting on dealer lots; it's just that many Americans won't drive them.
Ford should be commended for its commitment to sustainable technologies, particularly in light of its financial challenges. The Company has the only true hybrid in North America today, and it was one of the first automakers to offer alternative fuels some 15 years ago.
The critics don't fully understand the enormous business challenges inherent in socially responsible leadership. There can be painful and terrible tradeoffs on the bottom line, and Ford has done the best job possible in an industry where nothing ever changes overnight. 
Sean McAlinden
Center for Automotive Research
Chief Economist and Vice President for Research
