Ford to Boost Production of Hybrids Tenfold

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Ford to Boost Production of Hybrids Tenfold - 09/22/05 02:01 AM

Ford Motor Co., the No. 2 U.S. automaker, will boost global production of gasoline-electric hybrid vehicles tenfold by 2010, Chief Executive Bill Ford said on Wednesday.

By then, more than half of the company's Ford, Lincoln and Mercury cars and light trucks will have hybrid capability, Bill Ford said during a meeting at a research lab here with company scientists and engineers.

Hybrid vehicles twin a gasoline engine to an electric motor and batteries to boost fuel economy.

The CEO said Ford will have the capability to build about 250,000 hybrid vehicles by 2010, with the ability to boost capacity based on demand for the vehicles.

Ford, which is also looking at expanding the hybrid lineup across its European luxury brands, currently makes about 24,000 hybrid vehicles annually.

"We know that our customers are concerned about energy," the CEO said. "Our job is to alleviate some of their concerns with viable options in their choice of transportation."

Ford—which is struggling with strong competition, soaring health-care and raw material costs, and a slide in U.S market share—is trailing Toyota Motor Corp. and Honda Motor Co. with the fuel-efficient technology.

The Japanese automakers have been successful in cultivating an image as the leaders in environmental technology by offering a range of hybrid vehicles. Toyota plans to sell up to 250,000 units worldwide this year, mainly in North America.

Bill Ford said he expects the company will make money on hybrid vehicles by 2010.

"As we get into the second and third generation (of vehicles), as volume ramps up, costs will come down," he told reporters at a briefing following his speech.

Ford builds the Escape hybrid sport utility vehicle and will begin production this year of the Mariner hybrid, its Mercury version of the Escape.

MORE ETHANOL-FUELED VEHICLES IN 2006

By 2008, the Detroit-based company said it will have five hybrid vehicles on the road, including the Escape, Mariner and Mazda Tribute SUVs, all based on the same platform, or vehicle underpinnings. The other two vehicles will be the Ford Fusion and Mercury Milan mid-sized sedans.

Ford had previously said it has trouble offering more hybrid vehicles because of a shortage of specialized components and also what its executives have characterized as a "predatory" approach taken by some Japanese automakers.

Phil Martens, Ford's chief of product development, said the company is trying to develop a lot of the technology in house, and is working with U.S. suppliers such as Delphi Corp. for hybrid components.

Ford gets battery packs for its hybrid systems mainly from Japan's Sanyo Electric Co. and other parts from various suppliers, such as Toyota affiliate Aisin Seiki Co.

In another push to produce vehicles with alternative fuel systems, Ford plans to launch four vehicles in 2006 that will run largely on ethanol, a corn-based fuel. That will raise production of vehicles that can operate with more than just gasoline in 2006 to as many as 280,000 units.

Ford will offer the ethanol-fueled option in its best-selling F-150 pickup truck, and the Crown Victoria, Mercury Grand Marquis and Lincoln Town Car sedans.

The company will launch a new corporate advertising campaign in the fall with the theme of innovation, the CEO said, but he declined to say how much it will spend in the campaign.

Bill Ford also said the company will begin a pilot program that will offset greenhouse gasses such as carbon dioxide, emitted in the production of hybrid vehicles. Through the plan, Ford will pay for projects around the world that reduce carbon dioxide emissions.

Ford shares were down 12 cents, or 1.23 percent, at $9.64 in afternoon trading on the New York Stock Exchange.

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