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Getting to Green

By Micheline Maynard (The New York Times) - January 25, 2007

NEARLY a century ago, Henry Ford declared a customer could have a car in any color as long as it was black. Now, carmakers around the world are trying to convince consumers that their lineups come in green. From BMW to Honda, from Chrysler to Volkswagen, the industry is rushing to make vehicles that use less gasoline or don’t rely on it at all.

The push — involving hybrid-electric cars, diesel-powered cars, flexible-fuel models and vehicles that run on hydrogen — is setting off the same kind of competitive frenzy that has always surrounded the development of sports cars and sport-utility vehicles.

But with those models, the emphasis was on power under the hood and profits that flowed to the bottom line.

Now, in a turning point, the companies are portraying themselves as proponents of cleaner, more efficient vehicles, hoping for a dual payoff in sustainability, both for the earth and for them.

There is “a new DNA for the automobile,” said Lawrence D. Burns, vice president for research and development and strategic planning at General Motors.

Environmentalists, who have begged carmakers for years to get serious about doing more to help the planet, are watching the events with a combination of satisfaction and skepticism.

“They have been dragged kicking and screaming toward producing more-fuel-efficient products,” said David Friedman, research director for the vehicles program at the Union of Concerned Scientists.

Nowhere is the move more apparent than in Japan, where the Tokyo Motor Show, held every two years, features the latest shapes and sizes of environmentally friendly vehicles from Toyota, Honda and Nissan.

The stakes are highest for Toyota and G.M., which lost its title as the world’s biggest carmaker to Toyota earlier this year. Of all the companies, Toyota has spent the most time and money honing its green image, producing the hybrid-electric Prius and other fuel-efficient cars.

It has sold more than a million hybrid vehicles around the world since the Prius went on sale nine years ago. More Toyota hybrids are reaching showrooms this fall, like the Highlander hybrid and the $104,000 Lexus LS hybrid, its highest-priced green car.

G.M., whose most notable environmental effort was last decade’s EV1 electric car, is staying close to Toyota’s heels. It will roll out a hybrid version of a vehicle in its lineup every quarter for the next four years, 16 in all.

Beyond that, it is placing a huge bet on the Chevrolet Volt, a small sedan that can be recharged by plugging it into a wall outlet. Mr. Burns, the G.M. executive, says the Volt marks a rallying point in G.M.’s effort to be green.

Yet, with gasoline prices at $3 or more a gallon, and with the environment a pressing issue for consumers worldwide, auto companies have little choice about paying attention to developing green automobiles.

As Mr. Friedman of Concerned Scientists said: “It isn’t just about making more patriotic and environmentally friendly cars, it’s also good business. Consumers are walking away from gas-guzzling vehicles.”

Mr. Burns agrees, saying, “For pure, raw business reasons, we’ve got to solve this problem because we want to continue to grow.”

That realization has meant some serious adjustments for carmakers who gave the subject little attention or who backed away from their original commitments.

Some analysts say that Ford and Chrysler fall into that camp, a particularly uncomfortable position for Ford, which had a lock on the title of greenest American company a few years ago.

At the time, Ford was headed by an avowed environmentalist, William Clay Ford Jr., Ford’s great-grandson, who served as chief executive from 2001 until last year and remains its executive chairman.

Among other things, Mr. Ford built an environmentally conscious assembly plant in Dearborn, Mich., and pledged to improve the fuel economy of his best-selling S.U.V.’s by 25 percent and to produce more hybrids.

With the company losing billions of dollars, he retreated from both promises, saying that Ford needed to take a broader approach to green issues. But his replacement, Alan R. Mulally, has intensified Ford’s environmental effort again.

Not long after Mr. Mulally joined Ford from the Boeing Company 13 months ago, he promoted the company’s environmental vice president, Susan M. Cischke, making her the first Detroit executive to have the word “sustainability” in her title.

Mr. Mulally told her, “The time for talk is past, now we have to figure out how to be part of the solution,” Ms. Cischke said in a recent interview. As a result, Ford is “trying to figure out how we prepare for a future that may look very different,” she said.

That future will probably include higher fuel economy standards in the United States, if Congressional supporters get their wish.

Detroit automakers were stung last spring when the Senate voted overwhelmingly in favor of legislation that would require their vehicles to get 35 miles per gallon by 2020, up from the current standards of 27.5 miles per gallon for cars and 24 miles per gallon for light trucks.

The action has forced the Detroit companies, along with Toyota, to back slightly higher fuel economy standards and to take other environmental steps.

Ford, for example, is peddling its hybrid-electric Ford Escape and Mercury Mariner S.U.V.’s to Washington lawmakers as patriotic (read: non-Toyota) symbols of their concern for the planet. It has also captured one high-profile customer, former President Bill Clinton.

His official fleet includes a hybrid Mariner, outfitted by Ford to meet Secret Service requirements. It also has rear bucket seats that provide more legroom for Mr. Clinton, as well as a minifridge.

For non-V.I.P.’s, Brian Johnson, an analyst with Lehman Brothers, said he expected Ford to fill out its lineup with fuel-efficient vehicles developed for Europe. There, Ford sells a variety of small vehicles aimed at consumers who are used to paying $6 a gallon for gasoline. Mr. Mulally, he said, “has a pretty good track record of pushing engineers farther and faster.”

Joining Mr. Mulally in the drive for more-fuel-efficient vehicles is Chrysler’s new co-president, James Press, who spent 37 years at Toyota. Chrysler took its own back seat in developing hybrids while it was owned by the German carmaker Daimler, from 1998 until earlier this year.

German officials thought diesel power, widely used in Europe, was the more realistic alternative for fuel economy. They pursued hybrid development mostly through a joint venture with BMW and G.M.

Out from under Daimler’s wing, Chrysler is now moving quickly to focus on its own hybrids. Mr. Press told The Detroit News last month that every vehicle in Chrysler’s lineup would someday be available in a hybrid-electric version.

For those companies, “it’s not too late, but I believe the next few years will be critical,” said Roland Hwang, vehicles policy director at the Natural Resources Defense Council.

As yet, neither Chrysler nor Ford promises anything with the star power of the Prius or the Volt, which G.M. says it will build beginning in 2010. The Volt, in turn, has prompted Toyota to accelerate work on its own plug-in hybrid, which it is testing.

Since neither company has the batteries to power its vehicles so far, the G.M.-Toyota contest is fraught with drama over which will get its car to consumers first. Yet the competition has some environmentalists shaking their heads.

“Companies that want to thrive in a world where carbon matters and there’s $80-a-barrel oil can’t just swing for the fences” with one big effort like the Volt or a Toyota plug-in hybrid, Mr. Hwang said.

“You have to have technology across the whole line to get you singles, doubles and triples,” he said. “You’ve got to have a full suite of technology across the board that you’re using to improve fuel economy and pollution performance.”

That is where Detroit is trying to prove it can lead. Along with hybrids and other high-profile vehicles, G.M. and its American rivals have spent years selling flexible-fuel vehicles, which can run on a variety of fuels, an area where most Japanese companies have lagged.

Mr. Burns predicts that hybrid-electric vehicles, coupled with flexible-fuel models, could account for as much as 80 percent of the cars and trucks sold in the United States by 2030, once scientists fully develop alternatives to gasoline that consumers will willingly buy.

“It’s not just the car that goes from black to green,” he said, echoing Henry Ford. “The energy has to be green as well.”

Where Toyota is concerned, more than 300,000 Prius owners have already bought into that idea, although their hybrids in many cases sit in garages next to vehicles powered solely by gasoline.

No matter what vehicles Detroit and its rivals develop, Mr. Burns says that ultimately car buyers will decide whether the environment wins. “Unless you get consumers involved in this mission, it’s not solvable,” he said.