Shareholders Join Growing Chorus of Voices Concerned about Automakers’ U-Turn on Fuel Economy Progress
CONTACT: Cyrus Nemati, (510) 735-8157
DEARBORN, MI – Shareholders will add their voices to the growing national concern about sharply weakened fuel economy standards at Ford Motor Company’s annual meeting tomorrow. At the meeting, As You Sow, a shareholder advocacy group, will move its proposal, filed on behalf of shareholders, asking Ford to declare whether it will maintain its current trajectory of meeting 2025 greenhouse gas (GHG) emission reduction goals or take advantage of weakened standards.
Shareholders are highly concerned that a choice by Ford to take advantage of the Trump administration’s backsliding could risk reputational harm to the Company, decrease its global competitiveness, create legal risk, and slow the critical global decrease of GHG emissions. Any let-up on progress in fleetwide GHG emission reductions sets the company up for harm down the road, especially in the face of Ford’s recent pivot to a lineup of large trucks and SUVs and the recent increase in gas prices.
In April 2018, Ford announced that it will phase out its sedans and focus on trucks, SUVs, and crossovers. This move, coupled with a wider lobbying attempt to weaken federal CAFE (corporate average fuel economy) standards, has roused investor, state, and activist concern.
A coalition of activist groups Public Citizen, The Sierra Club, and Greenpeace USA delivered 250,000 signatures to Ford’s headquarters in Dearborn, MI on Tuesday calling on the company to stop efforts to reverse clean car standards. The state of California, along with 16 other states, recently sued the Trump EPA over their plan to weaken Obama-era auto emissions standards. These standards are necessary for the U.S. to make progress toward reaching Paris Agreement goals to limit climate change to 2 degrees Celsius.
Meanwhile, automakers abroad continue to develop more fuel-efficient vehicles. Volvo has committed to an all-electric lineup by 2019. Volkswagen has committed to 80 new electric car models across the VW group by 2025, with 300 EV models to market in 2030, and BMW has committed to electric or hybrid plug-in vehicles to account for 25% of its sales by 2025.
“Companies that delay GHG reductions risk losing future competiveness to companies rapidly forging ahead with fuel economy improvements and alternative vehicle development,” said Danielle Fugere, president of As You Sow.
Globally, governments are adopting more stringent fuel economy policies and promoting low carbon vehicle technology standards. China will require 40 percent of cars sold by 2030 to be electric and has stated an intent to ban vehicles with internal combustion engines (ICE). Other countries and cities have announced measures to ban ICE engines, including Austria and Germany (by 2030) and the U.K. and France (by 2040). California recently announced an Executive Order to increase the State’s goal of 1.5 million zero emission vehicles (ZEV) on the road by 2025 to 5 million by 2030, a large vehicle market that will be met by companies that are making GHG reductions a priority.
“Ford puts itself and shareholders at significant material risk by slackening its commitment to GHG reductions,” Fugere added. “Regardless of the auto industry’s efforts to loosen federal emissions regulations, the world will continue to demand more fuel-efficient and alternative fuel vehicles. Ford cannot count on lax GHG emissions standards forever. The company must maintain its former 2025 goals to remain competitive in an international market.”
In 2009, Ford successfully applied for a $5.9 billion federal government loan to develop more fuel-efficient engines, hybrids, and electric cars, and to convert truck production plants toward car manufacturing.
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As You Sow is a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies. See our resolutions here.