Public Policy Positions

This section summarizes Ford's positions on key public policy issues currently under discussion in the United States.

Manufacturing Policy

Manufacturing is essential to local, regional and national economies. Manufacturing provides jobs and tax revenue, creates new products and technologies and promotes overall prosperity. When factories are closed, jobs are lost and the tax revenues that support hospitals, social services, local schools and public universities are reduced.

About 70 percent of all the research and development investment in the United States comes from manufacturing. We believe that a strong manufacturing base – with its attendant focus on engineering, science and technology innovations – is important not only for national prosperity but for energy independence, energy security, national defense and sustainability.

A strong manufacturing policy is needed in the United States. The government should implement policies that:

• create a framework that allows companies to compete fairly and freely;
• encourage research and development and investment in the future;
• allow access to competitive capital and create a stable, predictable and globally competitive regulatory environment and tax regime; and
• leverage the power of free enterprise and American ingenuity to create growth and prosperity.

The Department of Energy's (DOE) Advanced Technology Vehicle Manufacturing Incentive Program is an example of good policy that provides access to competitive capital while leveraging American ingenuity to invest in the production of more fuel-efficient vehicles. This program was authorized in 2007 and funded in 2008, and the DOE has awarded loans to a number of automakers, including Ford.

Strong free trade policies – enabling market access and prohibiting currency manipulation – also must be part of this equation. Also important are education policies that help to foster a skilled U.S. workforce. These types of policies are discussed later in this section.

Climate Change/Energy Security

Engaging on policies aimed at cutting carbon dioxide (CO₂) emissions and improving energy security is important for Ford, because vehicle fuel economy and tailpipe CO₂ emissions are one and the same. That is, the less petroleum that is used, the less CO₂ is emitted into the atmosphere.

Federal regulations governing vehicle fuel economy and emissions have been in place since the 1970s. In 2002, California adopted legislation to regulate greenhouse gas emissions from motor vehicles. Such state laws are tantamount to state-specific fuel economy standards; these would pose a major problem for auto manufacturers, both from a product planning and a distribution standpoint. Moreover, the state-by-state standards raised the specter of product restrictions in some states, which would harm both dealers and consumers. In 2009, the federal government, the states and the auto industry reached an agreement to establish a single national program for regulating vehicle fuel economy and tailpipe CO₂ emissions through the 2016 model year. Ford supported the "One National Program" agreement but remains concerned about the possibility that a patchwork of state-by-state standards could re-emerge once the current agreement expires. Measures must be enacted to ensure the continued existence of a single national program for vehicle fuel economy and CO₂ emissions in the 2017 model year and beyond.

The United States needs a national, market-based approach to reducing the nation's greenhouse gas and CO₂ emissions. Thus, Ford supports the creation of an efficient, economy-wide cap-and-trade framework with transportation fuels under the cap and mechanisms to avoid unintended adverse effects on the economy. A comprehensive economy-wide cap-and-trade program would provide flexibility to regulated entities while allowing market mechanisms to determine where CO₂ reductions can be achieved at the lowest cost. Without a cohesive national energy and climate policy that places a price on carbon emissions, we could be caught in a cycle of starting and stopping technology development. That is simply not good policy or good business, particularly when technology development requires billions of dollars of investment.

See the Climate Change section for more on public policy issues relating to this topic.

Health Care Reform

In the United States, national health care reform was the topic of intensive Congressional and public debate over the past year, culminating in the passage of national health care legislation in March 2010. We are encouraged that the new law includes provisions that are aligned with the three key areas (listed below) that we believe must be addressed in order to maximize the value of health care service (a combination of quality, appropriateness and costs).

• Wellness and Prevention – As a country, we must focus on wellness and prevention, and make sure that employers can offer creative incentives that work to engage people in healthy behaviors.
• Health Information Technology – We need a national technology infrastructure that allows the consolidation of a patient's medical records, so that the most appropriate care is given wherever treatment is provided. To accomplish this, we need electronic medical records at every doctor's office and hospital, and they all need to be connected. We also need tools to improve the accuracy and safety of prescription drug dispensing, such as electronic prescribing.
• Understanding What Works – By studying the cost and quality of health care and its effect on health status, we can deliver more effective care. New innovations in technology and drugs are key drivers of cost increases. Therefore, before new innovations are widely implemented, they must be compared to the standard practice to really know whether and how much additional value they bring.

For more on this topic, see the Economy section.

Vehicle Safety

At Ford, safety is one of the key principles that inform and guide our every design and engineering effort. We are committed to continuous improvement in vehicle safety; we are also actively involved in driver education and efforts to promote safer roadways. Ford will continue working with governments and the public to help further reduce auto accident and fatality rates, which reached historic lows in 2009.

Part of this commitment to safety is Ford's open and transparent approach to quickly addressing customer questions and vehicle safety issues. Ford supports the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act, which opened even more transparency and information sharing between the government and the auto industry.

Ford helped lead the introduction of event data recorders (EDRs) in vehicles and believes that certain information recorded by vehicle systems can enhance automotive safety. All 2002 model year and later Ford retail light vehicles sold in North America have been equipped with EDRs that store some crash data. Our newer systems record the 15 data elements required by the National Highway Traffic Safety Administration's regulation that goes into effect in 2012. Ford continues to support a move to require EDRs on all new vehicles as part of our open and transparent approach to safety.

Ford believes driver distraction is a serious issue, which is why we were the first automaker to support legislation for a national ban on handheld texting while driving. Reflecting this public position, Ford recently clarified its employee policy to explicitly ban handheld texting. This is aligned with research showing that manually operating electronic devices that can divert drivers' eyes from the road (not merely talking on cell phones) substantially increases crash risk.

Ford strongly supports maximum graduated driver licensing (GDL) in North America as a means of achieving reductions in crashes, injuries and fatalities by new teenage drivers. GDL is a system designed to delay full licensing while allowing beginners to obtain initial experience under lower-risk conditions. There are three basic stages to GDL: a minimum supervised learner's period; an intermediate license (once the driving test is passed) that limits unsupervised driving in high-risk situations; and a full-privilege driver license upon completion of the first two stages. The Company encourages all states to adopt maximum GDL programs and urges all driver license programs to incorporate maximum GDL requirements, including information on safety belt use and impaired driving. Ford complements GDLs with its Driving Skills for Life teen safe driving program and MyKey® technology that helps parents encourage their teens to drive more safely. MyKey features programmable speed and audio volume limits and a "no belts, no tunes" feature to encourage the use of seat belts, which are still the number-one lifesaving device.

Finally, Ford supports the enforcement of existing laws relating to driving under the influence (DUI) of alcohol and drugs, as well as the use of alcohol ignition interlocks (sometimes called "alcolocks") for DUI offenders.

See the Vehicle Safety section for more on our vehicle safety technologies and activities.

Human Rights

Ford is committed to respecting human rights everywhere we operate, because it's the right thing to do and it strengthens our business in the long run. We are a leader in addressing human rights and working conditions in the auto industry.

In early 2008, Ford joined the United Nations Global Compact, a framework for businesses that are committed to aligning their operations and strategies with 10 universally accepted principles in the areas of human rights, labor, the environment and anti-corruption.

And for several years, Ford has worked with leaders of the U.S. Department of State's human rights programs and the U.S. Department of Labor to explore how to encourage multinational companies to act as a positive force in protecting human rights in global trade, both through work in their own supply chains and through advocacy. We have also consulted with these agencies on how the U.S. government can encourage the protection of human rights through its purchasing practices.

See the Human Rights section for more on our activities in this area.

International Trade

As a global automaker, Ford has a strong interest in issues relating to international trade. With manufacturing facilities in 20 countries, sales in 88 countries and a global supply chain that moves parts worldwide, we are a strong supporter of trade liberalization. In fact, free trade is foundational to our business model.

Ford has supported every free trade agreement (FTA) ratified by the U.S. government since the United States first began free trade negotiations in the mid-1960s. We support pending agreements with Panama and Colombia, as well as the newly launched Trans-Pacific Partnership negotiations, which incorporate the United States into a regional agreement with a core group of markets – the majority of which the United States has already completed FTAs with.

We oppose the U.S.-Korea FTA in its current form because it does not open the Korean market to imported automobiles. In 2008, Korean automotive exports to the United States totaled 616,000 vehicles, while U.S. vehicle exports to Korea totaled only 10,000 vehicles. More than 80 percent (or $10.7 billion) of the current U.S. trade deficit with Korea is in automotive products.

Beyond the current FTA debate, we believe a new approach to trade is required that puts U.S. manufacturing at the forefront. Given the importance of manufacturing to the U.S. economy, Ford supports a manufacturing-driven trade strategy that:

• drives innovation and delivers economic opportunity to its citizenry by maintaining a vibrant manufacturing sector as its cornerstone, and
• enables U.S. manufacturing to compete on a level playing field against the best competition from around the globe.

Finally, we believe the elimination of trade-distorting policies such as currency intervention and manipulation must be considered a key component of any fair-trade initiative. Currency manipulation provides foreign automakers with an export subsidy of several thousand dollars per vehicle, while at the same time acting as the ultimate nontariff barrier, protecting their market from imports. Ford believes the market should set currency exchange rates – not governments.

Massive intervention by the Japanese government in 2003 and 2004 to weaken the value of the yen vis-à-vis the dollar helped to fuel one of the largest bilateral trade deficits in U.S. history. We now see hints that the Japanese may resume intervention. The Korean government, having benefitted from exports driven by a weakened Korean currency over the past year, is now also engaging in currency manipulation to support export industries. Korea must end this unfair and disruptive trade practice.

Education

Ford understands that global competitiveness depends on the ability of our K–12 educational systems and post-secondary institutions to prepare a 21st century workforce. With baby boomers beginning to retire in large numbers, and many high-skilled jobs going unfilled, improving the quality and performance of our schools has become an urgent issue facing communities large and small across the country. Within these communities, too many students are disconnected and unsuccessful in schools that struggle to be as engaging and relevant as they need to be. Add to that the considerable anxiety being generated by an economy in transition – from industrial- to knowledge-based – and education emerges as a critical factor in securing financial health and prosperity for individuals, communities and the nation.

Ford recognizes the importance of these issues and supports public policies and initiatives that are designed to mobilize educators, employers and community leaders to bring communities together to transform the entire educational system. These programs provide students with real-world learning opportunities that help them:

• develop essential higher-order skills, such as: critical thinking, problem solving, communication, innovation and creativity;
• make connections between the academic subjects taught in the classroom and their application in the real world;
• make meaningful connections to higher education; and
• build more sustainable communities by involving local business and community organizations to create service-based academic projects that make learning more applicable to real-world situations and positively impact the community.

By helping communities address this most critical challenge, Ford continues its long tradition of leading and supporting educational initiatives that empower students, strengthen communities, and benefit the American economy. See the Investing in Communities section for more information on the programs we support.

Electrification

We stand at an exciting moment in automotive history – the beginnings of the transition from gasoline-powered internal combustion engines to the introduction and proliferation of hybrids, plug-in hybrids and pure battery electric vehicles. As we make this transition, manufacturers must work together, and with the federal government as appropriate, to set standards for certain technical aspects of these new vehicles, to enable the market for them to proceed forward smoothly.

Consider, for example: When we go to a gas station, we take for granted that the pump nozzle is a size that will work with our vehicle. Early on, a standard size and configuration had to be developed and agreed to across all automobile and gasoline pump manufacturers, so that drivers could have a hassle-free experience when they went to fill up. As demand for and availability of plug-in electric vehicles continues to rise, it's similarly important that consistent standards be put in place regarding the technical aspects of these vehicles.

In North America, the Society of Automotive Engineers, with Ford's participation, successfully aligned all original equipment manufacturers (OEMs) on a standard charge connector and communication protocol that will enable all plug-in vehicles to use common charge points. This will be a key enabler for adoption in North America; the same connector is under consideration in Europe and China. Further standardization initiatives that will be helpful include fast-charge standards (for DC charging) and vehicle-to-grid standards. Global commonality for these systems will also be needed. Ford is also working with other OEMs and suppliers to provide a common database of charge point locations for display within vehicles' navigation systems. In addition, Ford and the industry are working collaboratively with the Obama administration and the U.S. Congress to address the challenges associated with the widespread deployment and commercialization of electric-drive vehicles.

See Electrification Challenges and Opportunities and Ford's Response for more information about our collaborative approach to encouraging the development of electric vehicles.