Ford Awakens from a Slumber; Post Office Rejects Ethanol

It seems that the reality of our situation is sinking in at Ford:

Ford’s trouble: $4 gas is here to stay

NEW YORK (CNNMoney.com) — Ford Motor Co. executives say they believe that $4 gas is here to stay, resulting in a fundamental consumer shift away from gas-guzzling SUVs and pickups and causing continued losses at its core North American auto unit.

The company said it expects gas prices to remain in the range of $3.75 to $4.25 a gallon through the end of 2009. And that expectation prompted the nation’s No. 3 automaker to announce deep production cuts for what has been its best selling and most profitable vehicles for several decades and could lead to more plant closings and job cuts down the road.

The company plans to ramp up production of smaller cars and crossovers: Ford Focus, Fusion, Edge and Escape, the Mercury Milan and Mariner, as well as the Lincoln MKZ and Lincoln MKX. These models generally cost less and have lower profit margins than the light truck models for which Ford is cutting production, such as the F-Series pickup, still the nation’s best selling vehicle.

I think that’s good news for everyone, except Ford shareholders and some Ford employees.

And a feel-good story about the ethanol industry:

Ethanol Vehicles for Post Office Burn More Gas, Get Fewer Miles

May 21 (Bloomberg) — The U.S. Postal Service purchased more than 30,000 ethanol-capable trucks and minivans from 1999 to 2005, making it the biggest American buyer of alternative-fuel vehicles. Gasoline consumption jumped by more than 1.5 million gallons as a result.

The trucks, derived from Ford Motor Co.’s Explorer sport-utility vehicle, had bigger engines than Jeeps from the former Chrysler Corp. they replaced. A Postal Service study found the new vehicles got as much as 29 percent fewer miles to the gallon. Mail carriers used the corn-based fuel in just 1,000 of them because there weren’t enough places to buy it.

“You’re getting fewer miles per gallon, and it’s costing us more,” Walt O’Tormey, the Postal Service’s Washington-based vice president of engineering, said in an interview. The agency may buy electric vehicles instead, he said.

Perhaps I should have said, “feel-good story for me.” After all, when corn-fueled cars are traded in for electric cars, that feels pretty good to me. In fairness though, I should point out that it does say that the ethanol-fueled vehicles they bought had bigger engines. Not sure why they went that route.

7 thoughts on “Ford Awakens from a Slumber; Post Office Rejects Ethanol”

  1. The fact that the Post Awful did not support the development of hybrid vehicles years ahead of the Prius is unutterably stupid. The driving patterns of their delivery trucks would mean that they would get a far greater relative improvement in mileage from a hybrid/regenerative system than what you see in a passenger sedan. Ditto for busses and other (e.g. UPS) delivery trucks.

    When you think about it, the personal automobile is about the last place where it makes sense to apply hybrid technology (not that it’s a bad thing in absolute terms, but the relative opportunity for savings is much less than in other applications).

  2. The article says they bought 30,000 bigger vehicles that happened to be flex-fuel and only ran ethanol in 1,000 of them.

    The story has nothing to do with ethanol, but it’s written like the 1000 vehicles out of the fleet that actually ran ethanol caused the 1.5 million gallons of extra gasoline usage.

    Did you see the TNT orders 100 more electric trucks at Green Car Congress? Electric heavy vehicles using standard lead-acid batteries for short delivery, yard service and most importantly agriculture are what we should be concentrating on. It can be initiated right now with existing technology and worry about developing single passenger vehicles when battery technology evolves.

  3. I agree with greenengineer. The PO, UPS, Fedex etc should move rapidly to PHEVs. Bring back flywheels!

  4. “and worry about developing single passenger vehicles when battery technology evolves.”

    Bob,we’re being fed a bill of goods by the automakers. There was a hybrid on the roads in 1914 that got 70MPG. There’s nothing wrong with lead acid batteries. They don’t need to last long,because reconditioning is so quick and easy. Service stations could switch battery packs in less time than a gas powered car can be re-fueled. Fact is,automakers are hooked on internal combustion. It’s just a whole lot more profitable. If Congress were to ban the sale of new gas powered cars,automakers would come out with alternatives lickety split. There were 100 electric vehicle manufacturers 100 years ago. It ain’t rocket science.

  5. Presumably the ethanol fueled vehicles had bigger engines because that’s what the manufacturers offer, because the whole *reason* to build flex-fuel vehicles is to get the CAFE bonus for flex-fuel on your gas sucker vehicles.

  6. RR,
    I believe you are missing the bigger story here, a rare miss, I might add. The USPS experience is a microcosm of what is wrong with the way the CAFE rules are bent to encourage flex-fuel vehicles. Those bent CAFE rules has the same effect as the USPS purchasing decision: more low mpg cars sold, thanks to the bogus ethanol credit. End result: a lot more gasoline consumed, significantly higher gas and oil prices. And not enough ethanol burnt to bother mentioning. All because our wise politicians decided that ethanol is the silver bullet that is going to save the day. Even more depressing: some still think so (cellulosic ethanol, stupid!).

    Does it get any dumber than this? Wait, don’t answer me…

  7. Fact is,automakers are hooked on internal combustion. It’s just a whole lot more profitable. If Congress were to ban the sale of new gas powered cars,automakers would come out with alternatives lickety split. There were 100 electric vehicle manufacturers 100 years ago. It ain’t rocket science.
    Excuse me, Maury, but for my own selfish reasons, I’d rather leave Congress out of it. Let’s just say I won’t trust them to confirm that the sky is blue.

    If it ain’t rocket sience there is a huge business opportunity, getting better every day, as oil and gas prices continue their endless climb. Personal prediction: oil prices level off over the next few months, while gas prices see all the action, but I digress.

    Go for it, lad! Help America out, and make a nice profit for yourself. The beauty of capitalism.

    Word of caution: the Tesla Roadster is having a lot of difficulty getting launched, for something that isn’t rocket science.

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