Public Policy Positions

This section summarizes Ford’s positions on key public policy issues currently under discussion in the U.S. Two important topics are not addressed here: Climate change policy is discussed in the Climate Change Policy and Partnerships section, and policy regarding sustainable raw materials is discussed in the Sustainable Raw Materials section.

Non-CO₂ Tailpipe Emissions

In the U.S., the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) regulate smog-forming tailpipe emissions, including hydrocarbons, nitrogen oxides, carbon monoxide and particulate matter. California finalized Low Emission Vehicle III standards in 2012, and the EPA is expected to issue Tier 3 emissions and fuels standards in 2013.

We will continue to work with the agencies through their regulatory processes to help develop rules that are both effective and feasible. In setting tailpipe emission regulations, consideration of other vehicle rules such as fuel economy and greenhouse gas standards and safety standards must be taken into account to ensure that the total package of requirements is workable.

Ford continues to oppose technology mandates that seek to impose quotas or limits on the production or sale of vehicles with specified powertrain technologies. Regulatory efforts to dictate market outcomes, or to pick technology “winners” and “losers,” have never produced a successful outcome. Manufacturers need the flexibility to build the kinds of vehicles that the marketplace demands based on consumer preferences and other external factors. Emissions standards should be performance-based and should be designed to enable manufacturers to introduce vehicles with an array of different, affordable technologies.

Undesirable Chemicals

The European Union’s REACH program (Registration, Evaluation, Authorization and restriction of CHemical substances) regulates and seeks to phase out chemicals of concern. More and more countries are adopting similar regulations. Turkey and Romania adopted their own versions of REACH in 2009; China adopted a version in October 2010. In 2011, Japan also adopted REACH-like regulations to manage their chemicals. South Korea will adopt REACH regulations in 2013 and will begin implementation in 2015.

In the U.S., the Senate and House both proposed bills in 2010 to overhaul the Toxic Substances Control Act, which was first enacted in 1976. The state of California is in the process of finalizing a “Safer Consumer Product (green chemistry)” law, scheduled to take effect in 2013, which will require manufacturers of selected products sold in California to identify safer alternatives to a potential range of 1,200 chemicals known to be harmful to public health and the environment. The California law will also phase in a requirement that manufacturers whose products contain listed chemicals of concern must conduct an alternative material assessment and replace the chemicals of concern with safer alternatives, or explain to state regulators why the chemicals of concern are needed and warn consumers or undertake steps to mitigate the public’s exposure to those substances.

In January 2009, the United Nations implemented regulations requiring a globally harmonized system (GHS) of classification and labeling of chemicals. In the U.S., implementation of the GHS requirements starts with employee training, which must be completed by the end of 2013. By June 1, 2016, employers must be in full compliance with the revised Hazard Communication Standard (HCS), including complete training of employees on new hazards and/or revisions to workplace hazard communication programs.

We believe that regulatory requirements for the phase-out of undesirable chemicals need to be prioritized and implemented in a workable manner. Government and industry resource constraints mean that not all chemicals of concern can be addressed at once. Moreover, manufacturers and suppliers need adequate lead-time to identify replacement substances that are more environmentally friendly than the ones they replace, and also to design and engineer components that incorporate these new substances. Ford will continue to work with regulatory agencies to help develop rules that target the highest-priority chemicals first, and that drive steady progress toward the elimination of chemicals of concern in an effective and efficient manner.

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. About 70 percent of all the research and development investment in the U.S. comes from the manufacturing sector. 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.

Government is a key stakeholder in helping shape the competitive climate on which the auto industry depends. U.S. policy makers can work together to support manufacturing by shaping a climate for economic growth, regulatory certainty and a strong foundation for U.S. exports. Integrated elements of a competitive U.S. manufacturing agenda include the following:

• Corporate tax reform: The U.S. has the highest corporate tax rate among developed countries. A lower rate frees up capital that can be reinvested in new products, technologies and manufacturing innovation.

• Regulatory efficiency and certainty: We need a performance-based, data-driven approach to regulation – especially as we develop emerging technologies such as vehicle-to-vehicle communications and driver assist features. We need efficiency in the regulatory process that provides certainty and avoids a patchwork of state regulations that can undermine efficiency – often with no societal or environmental benefit. When multiple regulators exist, we need to work together to ensure that we ultimately develop standards that are achievable and consistent with one another so that compliance costs are minimized.

• Trade: Ford has supported every free-trade agreement approved by the U.S., and Ford is the leading vehicle exporter in the U.S. We support strong free trade policies – enabling market access and prohibiting currency manipulation. In addition, trade agreements also can help shape and harmonize regulations. A U.S.–E.U. trade agreement that pursues regulatory harmonization and mutual recognition of standards would enhance both regions’ competitiveness in today’s global marketplace.

• Training and education: We need to continue training our workforce and encourage education in math, science and engineering if the U.S. is to remain competitive and innovative. In our hourly workforce, continued “up-skilling” is critical to maintaining our competitive performance. Existing federal training programs should be flexible, work closely with states, and prioritize incumbent worker training.

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 2011. (Early estimates from the U.S. National Highway Traffic Safety Administration project that traffic fatalities in 2012 increased as the U.S. economy continued to recover.)

At Ford, we take our commitment to safe driving seriously and recognize that driver distraction is a very important safety issue. Extensive research shows that manually operating electronic devices that are not integrated into the vehicle can divert a driver’s eyes from the road and cause drivers to take their hands off the steering wheel, increasing the risk of a crash substantially. That is why Ford pioneered the use of hands-free, voice-activated technology to help drivers keep their hands on the wheel and eyes on the road. It is also why Ford was the first automaker to support a national ban on the use of hand-held devices while driving; we also support graduated driver license programs that restrict cell phone use and text messaging by new drivers, as discussed below. We go further by educating young drivers across the country on the serious dangers of distracted driving. And we try to lead by example; Ford has a corporate policy prohibiting the use of hand-held mobile devices while driving Company-owned vehicles.

Ford is rapidly expanding its research on connected vehicles that can wirelessly talk to each other, when appropriate, to warn of potential dangers, to enhance safety and identify impending traffic congestion for more efficient driving. Ford participates in field tests in the U.S. and Europe to aid in the development of these next-generation vehicle-to-vehicle and vehicle-to-infrastructure communication technologies. We are also working closely with governments, standards organizations and other automakers globally to develop harmonized standards around the world to help deliver these technologies as quickly and affordably as possible.

Ford strongly supports Graduated Driver Licensing (GDL) programs in the U.S. as a means of helping to reduce crashes, injuries and fatalities involving novice teen drivers. The most effective GDL programs require a minimum learner permit age of 16, an intermediate license until age 17, and at least 65 hours of supervised training, in addition to prohibiting night-time driving after 8pm and banning all teenage passengers for intermediate drivers. Although all U.S. states have adopted some level of GDL requirements, some have adopted all elements of GDL while others have chosen to adopt only selected portions. Ford encourages all states and the District of Columbia to adopt maximum GDL program requirements, including information on safety belt use and the dangers of impaired and distracted driving.

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

Human Rights

Ford is committed to respecting human rights everywhere we operate, because it is 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 2008, Ford joined the United Nations Global Compact, a framework for businesses 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.

Several states have passed local legislation to prevent human trafficking, and we are watching for a federal regulation. Ford supports the underlying goals of human rights legislation, and where appropriate, Ford is participating in sector-specific initiatives and with international organizations to systematically evaluate supply chains to determine the most effective measures to combat human rights violations.

For more on our commitment to human rights, see Human Rights in the Supply Chain.

International Trade

As a global automaker, Ford has a strong interest in issues relating to international trade. With manufacturing facilities in the Americas, Europe, Asia Pacific and Africa, sales in all key global markets 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 U.S. first began free-trade negotiations in the mid-1960s. In fact, the auto sector is the largest exporter of goods in the U.S., and Ford is the largest exporter within the sector.

To further increase U.S. exports and support American jobs, 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
• 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 pillar of any 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.

Education

Ford understands that global competitiveness depends on the ability of our K-12 educational systems and post-secondary institutions to prepare a 21^st 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
• 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 U.S. economy. See the Investing in Communities section for more information on the programs we support.

Electrification

As advanced technology vehicles – such as hybrids, plug-in hybrids and all-electric vehicles – emerge onto our highways and roads, manufacturers must work together, and with governments 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 is similarly important that consistent standards be put in place regarding the technical aspects of these vehicles.

In North America, the Society of Automotive Engineers (SAE), with Ford’s participation, successfully aligned all original equipment manufacturers (OEMs) on a standard charge connector and communication protocol that enables all plug-in vehicles to use common charge points. This allows all public charge stations to be compatible with all vehicle manufacturers’ products. For Ford, it enables our plug-in vehicles to charge a fully depleted battery in 2.5 to 3.5 hours. The same approach is under consideration in Europe and China. For faster charging, the SAE (again with Ford’s participation) also approved a standard plug and interface to enable future equipped vehicles to charge their battery in 15 minutes or less. In Europe, the standards organizations adopted this same “fast-charge” framework, called the DC Combo System. Ford is now participating in standards work to harmonize wireless charging globally. In addition, Ford is 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 deployment and commercialization of electric-drive vehicles and infrastructure.

We have also taken a standards approach in the design of the Ford/Leviton charge station. We co-designed a single version of the 240V charge station that not only meets the standards referenced above, but works with all of our plug-in products (i.e., plug-in electric vehicles and battery electric vehicles) and can be used in indoor, outdoor, residential and commercial use throughout U.S. and Canada. In Europe, a similar relationship has been established with Schneider Electric consistent with our European deployment of electrified vehicles.

See Electrification: A Closer Look for more information about our collaborative approach to encouraging the development of electric vehicles.