Green Production and
    Products as Risk Management

The efforts by FoMoCo to promote environmental products and policies go far beyond mere compliance with government regulation. Under William Clay Ford, Jr. as Chairman of the Board and Jacques A. Nasser as President and CEO, Ford recognizes that it is a transnational enterprise that contributes to the commonwealth of many societies. Corporate environmental practices are an obvious place to enhance customer satisfaction with any firm's goods and services. As Nasser puts it, ethics, environmentalism, and economics all push FoMoCo toward more aggressive ecological reforms simply to maintain market share:

In today's world of rising expectations and instant communication, corporate citizenship is critical to a company's market value. It is both a risk management issue and a competitive strategy that can increase the value of a brand. It's also simply the right thing to do.1

Saying it is "the right thing to do" is fine, but the concrete connections to environment to risk management and competitive strategy is much more indicative of FoMoCo's corporate agendas here. As a Ford, Bill Ford, Jr. believes "being a leading corporate citizen is part of our heritage, it is what defines us," but he also agrees "it also is increasingly affecting purchase and investment decisions" so this approach to large public policies will be "a strength we are going to build on."2 For nearly fifteen years, the touchstone of Ford's environmental programs has been to blaze the trail for the auto industry by exceeding current governmental regulatory requirements. At ford.envirodrive.com, the company claims "it is not enough for us just to merely comply with government regulations; we go beyond that and look to combine significant technological advances, affordable costs, and volume application so that we can have a real and immediate impact". On one level, this existing strategy is where Bill Ford says his heart also lies. He serves on the Board of Directors for Conservation International, he features Time magazine's environmental "Heroes for the Planet" and Global Classroom for Ecology at the Ford.com web site, and he supports many of other environmentally-minded partnerships between FoMoCo and local players in the national markets Ford serves. On another level, however, this strategy also plays well among FoMoCo's customers, shareholders, and employees. Hence, "this "greening" of Ford runs throughout the company," and the reason cited for doing it is simple, "because it's the right thing to do".

 

Saying it is "the right thing to do" for FoMoCo to green itself as a corporation is an interesting claim. It can be simultaneously interpreted in ecological, engineering, or ethical terms, but it plainly also has an economic undertone. Like all automobile and oil companies, FoMoCo realizes that the global warming controversy often leads to finger pointing in the political arena as opinion leaders want to indict specific culprits for such anthropogenic environmental changes. Not wanting to be named, indicted, and punished for destroying atmosphere or biosphere, Ford proclaims "we've achieved some great things: We were the first company to reduce the level of harmful emissions from its fleet of SUVs and many other trucks below required standards. We are the only automotive company to meet tough international environmental standards for all its plants. We make the most vehicles that run on fuel other than gasoline. And while we are proud of these achievements, we know it's not enough. We will continue to improve and search for new solutions in the area of personal transportation".

 

So achieving some great things in environmental terms at Ford also looks a lot like excellent strategic risk management. Ford SUVs and trucks are key corporate profit centers, losing that cash flow to either state regulation or buyer rejection could sink the company. As a seller in over 140 markets worldwide, meeting and exceeding the regulatory targets set in the most restrictive ones becomes quick shortcut to complying with environmental regulations anywhere for both its vehicles and its plants. Diesel and gasoline are dirty fuels. They also are exhaustible, and expensive, so working to develop new fuel alternatible along with another fuel cycle infrastructure is a perfect means for prolonging the survival of FoMoCo as an automotive enterprise. These environmental achievements are significant, and they should be praised. Yet, they only have significance, and seem so praiseworthy, because the automotive industry, often with Ford in the vanguard, fought their implementation long and hard until quite recently giving into change. Many members of the car-buying public told FoMoCo that "greening" the firm was the right thing to do in the 1960s, but Ford did not begin to change until it realized in the 1980s and the 1990s that an environmentally-oriented reengineering of its vehicles and production lines also would keep it in the green economically. In fact, Ford now sees itself as one of the world's key vanguard enterprises in the struggle to "clean up and preserve the planet," but this is because FoMoCo also believes "the approach we're taking is really the business model of the future" .

Footnotes



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