The current policy of forcing automakers to maintain an average fuel economy level across their product lines is not sufficient to cut gasoline consumption and is harming the industry, Mulally said at an automotive conference in Traverse City, Michigan.

"I've never seen a market distorting policy like CAFE (Corporate Average Fuel Economy)," Mulally said.

To keep average fuel economy standards in line, automakers have been forced to produce more smaller cars than there is demand for to be able to produce the larger models that customers really want, he said.

While automakers are committed to squeezing more fuel efficiency out of their vehicles every year, the technology does not exist to make the cuts legislators are asking for unless consumers stop demanding large, gasoline guzzling vehicles, he said.

"The numbers that are being talked about are not possible -- you have to do it by the product mix," Mulally said.

While automakers have doubled the average fuel efficiency of vehicles on the road since CAFE was implemented in 1975, there are now three times as many vehicles on the road and they are driving four times as many miles, he said. And the US now imports 68 percent of its oil, up from 28 percent in 1975.

"Energy independence is really important," he said. "But we've also got to do it in a rational way so we don't destroy a phenomenal manufacturing industry in the United States."

When asked by reporters if he was endorsing a gasoline tax, Mulally said "no, not exactly."

"I think it's so important we all join in this debate and we really decide what we want to do about energy security and global warming. A piece of that could be a tax."

But Mulally indicated he did not think a modest tax, like the 50 cent tax recently proposed by Michigan senator John Dingell, would be sufficient.

Consumers in the United States have already shifted to smaller, fuel efficient vehicles in the face of rising gasoline prices, he said.

When asked what it would take to dramatically shift behavior, he said "the best data on that is in Europe."

"The citizens of Europe made a decision a few years ago to tax the diesel and the petrol. The average size car in Europe is around a Ford Fusion size of a car."

When asked about the progress of contract negotiations with the United Auto Workers, Mulally expressed confidence that the Big Three automakers would be able to reach deals with their main union before the current contract expires on September 14.

He also indicated that significant concessions may be included. "I am very confident that we're going to continue to work with the UAW in a very positive way to create a more competitive Ford going forward," he told reporters.

"We're going to work on all the areas of competitiveness and we all know what it means to be competitive."

Ford is also well on the path to returning to profitability by 2009, as outlined in its restructuring plan, he said and is "on track" to post a narrowed loss in the second half of 2007 and meet its 2008 targets, he said.

Related Links
Car Technology at SpaceMart.com

Memory Foam Mattress Review

SPACE MEDIA NETWORK PROMOTIONS Solar Energy Solutions Tempur-Pedic Mattress Comparison ... Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News