Bill Ford Calls for Government-Industry Partnership To Ensure U.S. Competitiveness

Bill Ford Calls for Government-Industry Partnership To Ensure U.S. Competitiveness Key Issues are Healthcare, Fair Trade, Tort Reform and New Technologies

–Manufacturing is still an important engine that drives the U.S. economy and provides •goodê jobs that everyone wants to preserve,” according to Ford Motor Co. CEO Bill Ford Jr., who called on the federal government and business leaders to work together to find new solutions to growing challenges that threaten the long-term health of the U.S. manufacturing sector.

At the invitation of NADA, WANADA was among auto industry groups that turned out last week to hear Ford address the U.S. Chamber of Commerce.

“Some of the key issues are bigger than any one company or any one industry,” Ford said. “In order to tackle them effectively, we need the collective action of government and industry working together, to ensure the U.S. remains competitive, and our economy stays strong.”

He cited four key issues challenging the U.S. manufacturing sector: rising healthcare costs, fair trade agreements, legal reforms and government promotion of new technologies.

Healthcare. –We have the highest healthcare costs of any major nation, and those costs keep increasing rapidly,” Ford noted. –The United States spent an estimated $1.7 trillion on healthcare in 2003 alone. That represents over 15% of our GDP. During the four-year period through 2003, health insurance premiums increased by 11.4% a year, compared to 2.2% for overall inflation. This is a pace we cannot sustain.”

Ford Motor Company currently provides healthcare coverage to over a half million employees and retirees, at a staggering cost of $3.2 billion in 2003. –That adds about $1,000 to the price of every car and truck we build in America. As a company, we spend more on healthcare than we do on steel,” he said.

Ford emphasized that nobody is –looking for bailouts,” or was he suggesting –a slow march to national health care.” He called for a coalition of business, labor, consumer, medical, government, and other stakeholders to find long-term solutions to America’s health care needs.

–I am suggesting using all of the efficiencies of the market, along with the proper role of the government, to provide better health care at a better price. We can do this if we work together,” said Ford.

Tort Reform. Also related to rising healthcare costs, Tort Reform is another critical issue for manufacturers. Ford pointed out that, in 2002, the legal costs paid by U.S. companies totaled $233 billion, –which is ultimately paid by all of us,” he said. –As a percentage of our GDP, we spend more than double the amount of other industrialized nations on lawsuits. But only 20 cents from each dollar spent actually goes to winners in those lawsuits. This is raising the cost of doing business and raising questions about the fairness of our legal system.” He added that passing class-action and asbestos reform –would be a good start.”

Fair Trade. Ford called for –a level playing field,” and said automakers will use the next round of talks on World Trade Organization rules to help open more markets. He pointed out that U.S. is one of the most open markets in the world. –But all too often, when U.S. automakers try to export or build our vehicles in other countries, we face a different set of rules,” he said. –There are tariffs, investment restrictions, import quotas, local supplier sourcing rules, currency manipulations, and unnecessarily restrictive vehicle standards, to name a few.”

He also noted that, –While we welcome the investment of our foreign competitors in the United States, we should never be confused with the competition. The traditional U.S. automakers DaimlerChrysler, Ford, and General Motors are the foundation of the U.S. manufacturing sector” employing nearly 90% of the autoworkers in the U.S, and manufacturing 75% of the cars and trucks made in America.

–In fact, the average domestic content of our vehicles sold in America is 80%, compared to 31% for Japanese manufacturers, 5.4% for European, and 2.1% for Korean. And the money we earn here stays in this country,” said Ford.

New Technologies. Ford admitted he had –my head handed to me” by critics when he called for American industry to seek new technologies to ward off global warming. But he did not back off his point that business must lead the way in developing environmentally friendly technologies that will reduce energy use and greenhouse gas emissions. –But that government support is crucial,” he added. Ford suggested Congress consider advanced technology tax credits on par with those offered in Japan: about $2,500 to $3,500 per vehicle.

In the long term, Ford said, government development of an infrastructure for hydrogen was a key to converting to ultra-clean fuel cell cars.

But, he concluded: –As business leaders, we are responsible for making sure our companies can compete on a world stage. We need to innovate and compete on our own.”