As Climate Crisis Threatens, Does Ford Have Something to Hide About Its Stance on Emissions Regulations?

With warnings about the climate crisis becoming more dire at every turn, it's clear that we have to act. And fast. Shamefully, iconic American brands like Ford are not demonstrating leadership in the face of this problem, rather they have remained intransigent. This year, shareholders looking for a sign from company leadership that they are taking climate change into account when positioning the company for the long term likely were deeply disappointed by leadership's lack of accountability at the company's annual meeting earlier this month.

In the Trump administration, Ford has found an enthusiastic deregulatory ally. Last August, the administration proposed flatlining Obama-era vehicle fuel economy and greenhouse gas emissions standards (called clean car standards) and revoking a longstanding Clean Air Act provision that allows states to set their own tailpipe pollution standards to protect public health. The administration admits that its rollback would cut up to 60,000 U.S. jobs and by 2050, would cause 299 pollution-related deaths every year. Outside analysis indicates it would cost consumers hundreds of billions more at the pump and generate an additional 2.2 billion tons of carbon pollution. It would eviscerate the most effective climate change program we have.

Shortly before the Trump administration proposed its rollback, Ford worked to distance itself from the administration's announcement with deceptive statements claiming it supports the clean car standards.

But Ford's actions paint a different picture. In interviews with the press, meetings, official documents and requests to Trump and the EPA, Ford:

• exaggerated the cost of compliance with the existing rule;
• urged the administration to weaken mile-per-gallon targets and add loopholes;
• touted flawed research to analyze the proposed rollback; and
• said that California and other states should not be permitted to set their own pollution safeguards

Ford and the auto industry's political influence over regulators in Washington is substantial. During the first year of Trump's presidency, the auto industry spent $49 million on lobbying - the most since 2008. That doesn't include lobbying and other election-related activity conducted by the Alliance of Automobile Manufacturers, which represents Ford and 11 other car companies. As part of its lobbying, the Alliance has promulgated anti-science reports to cast doubt on the harmful effects of pollution and request new loopholes that would result in emissions increases greater than those the Trump administration proposed. How much money has Ford given the Alliance to support its efforts to gut the nation's clean car standards? We don't know because Ford won't say.

Ford's shareholders are concerned about the company's election influence and lobbying through trade associations and since 2017 have filed proposals calling for transparency. Ford has opposed these every year, and this year was no exception. The two resolutions seeking disclosure failed--at the board's urging--despite a strong showing from Ford's shareholders. The resolutions received 38.1% and 43.5% of shareholder support, excluding the votes from company executives and insiders - which is high, considering that nearly a quarter of voting shares at Ford are controlled by major mutual fund companies that traditionally don't support disclosure.

Why would Ford's leadership oppose transparency? A company's reputation directly impacts the brand's success and a trusted reputation can bring strong shareholder value. One way to prove corporate integrity and to establish a strong reputation is to be transparent. Corporate lobbying and political spending, when exposed, can present real reputational risk that harms the corporate brand and in turn, investors.

Ford's actions paint a cautionary tale for other companies. It has been the target of a national campaign by organizations, including Public Citizen, calling on the company to stop misleading the public and pushing to roll back the standards. Ford's coziness with the Trump administration and closed-door lobbying not only threatens its reputation, but it contradicts the company's stated sustainability goals.

That's why Ford's disingenuous PR techniques and secrecy around its lobbying should be particularly disconcerting for shareholders. The fact that Ford executives won't meet with shareholders in person--opting for a virtual meeting instead--should be a red flag about how willing it is to own up to its reckless behavior.

Could disclosure prevent the type of deregulatory quest the industry has pursued over the past several years? Maybe. But with policy consequences that spell disaster for the climate and look eerily to those that threatened the entire industry in the mid-2000s, shareholders deserve to know the extent to which Ford is pushing deregulation.