Ford has developed a version of the Fiesta that seats 5 and gets 65 MPG. Yes, 65 MPG.
But you won’t see it on the streets near you, and you won’t be able to buy it- unless you live in Europe. Why this is so is sparking some controversy. It would seem quite odd that a struggling automaker would not offer a car for which the U.S. market seems primed. Isn’t this the kind of car the government says we should have? Isn’t this the kind of car I’d be interested in buying.
The reasons, as outlined in the Business Week article, reveal the problems that hamper the U.S. economy and attempts to conserve energy. It points out how a business not only must endure its own bad decisions, but government’s bad decisions. And we all come out the losers, at least in the short-term.
Here they are in summary form with some editorial comments by yours truly.
- It is a diesel engine. U.S. consumers have shown an overall aversion to diesel cars. They picture the black smoke coming out of those older diesel engines. I remember Mr. Mahoney’s Mercedes coughing out black smoke before he headed out to work in Boston each morning. That was 30+ years ago. Our perception has not caught up with reality. The newer diesel, and diesel engines, are much cleaner than before and often pollute less than gas engines.
- It is a diesel engine. No, I’m not being redundant. Due to government taxes on the trucking industry via diesel, it is more expensive than gasoline. Considerably more expensive. The U.S. tax policy (federal, state & local) is creating a scenerio where there is a huge disincentive to drive a car that conserves fuel and pollutes less.
- The engine is made in England. Labor costs there are high. Thanks to all the money we are shipping to the Middle East for oil (and China for everything else), the value of the dollar relative to nearly every other currency is down. This makes the car too expensive for the U.S. automaker to “import” in this global economy where they have had to move plants out of the country so the unions don’t put them completely out of business.
- Ford doesn’t have the money to build a new plant in Mexico. They are bleeding reserves, and the $350 million needed to do it just doesn’t make sense since they aren’t sure people will buy it (see the problem with diesel). Their bad decisions in the past, and inability to forecast the future (they could have just asked me, I’ve been anticipating this energy crisis since the 80’s) mean they cannot compete in the present for the future.
- Hybrids are seen as the ’savior’. This is the ‘green’ market. Diesels are so ‘old school’ and hybrids are the hot item.
Ford sees all of these put together as an insurmountable problem that keeps these cars in Europe and you spending more on fuel. Some other automakers are taking the gamble, however. Mercedes, Honda and Nissan will be introducing diesel models to the States in the hopes of changing peoples’ perceptions via advertising, and open up a new, fuel-economy market. And satisfy Congress which wants the average MPG of autos to continue increasing (not a bad thing, it is just how you make it happen).
