Why Bill Ford (Yes, That Ford) Wants a Gas Tax Hike

“One thing I’ll tell you for sure: our ability to forecast has been just horrible,” Bill Ford, the executive chairman of Ford Motor Co. said late Monday in an onstage interview at the Fortune Brainstorm Green conference. While the company has brought in a legion of experts over the years to help with vehicle planning — helping to anticipate where the market would move over the three to five years it took to develop a new vehicle — it “might as well have just tossed darts,” said Ford.

Just a few years ago, he said, the buzz at a conference like this one, held in Southern California, would have been about hydrogen cars, which he said “would have been the holy grail,” and ethanol blends, for which the company has made a big push with its flex-fuel vehicle lineup. Even now, he said, it’s not at all clear to the company where vehicle technology will end up.

But one thing that can help focus markets with dart throwers is regulation. In that sense Ford actually endorses a gas tax hike. “If prices are gyrating wildly,” he said, it becomes extremely difficult to know whether the company is planning the right vehicle or technology (if you’re operating under the assumption that automakers should supply what the market demands, and that there’s a lot less demand for fuel-sippers when gas is cheap). Ford noted that in the EU, diesel fuel “became an easy decision” for drivers after the government decided to make it much cheaper than gasoline.

Bottom line, he said, it’s preferable to have a fairly predictable, stable planning horizon rather than even cheap gas for the short-term. In other words, if gas is going to be six bucks a gallon in five years, so be it — at least he can plan for it.

Photo courtesy Flickr user dok1

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