Strategies Changing Quickly in the Green Game
April 22, 2008

By Dale Buss

As Earth Day comes around once more, there are a few different scoreboards for tracking the relative progress of automakers in their attempt to win the green derby.

According to Toronto, Canada-based consumer-research firm BrandIntel’s recent survey of online discussion, for example, Toyota, Honda, Mercedes and Volkswagen have the most “green credibility” due to their hybrid and diesel vehicles. General Motors and Chrysler have been stuck among the least-credible because of their large fleets of trucks and SUVs and weaker lineups of hybrids and diesel options. Ford sits in the middle.

But several automakers are forging strategies for changing such scoreboards in their green credentials. A look at a few:

General Motors

GM clearly has made the industry’s most significant recent effort to improve  its environmental positioning and has put in play the biggest number of factors that have the potential to enhance dramatically – or, perhaps undercut – its growing environmental credibility.

The company has come a long way since being the industry’s most identifiable environmental “bad guy” after its decision to develop and market – and then, quickly, scrap – the EV-1 all-electric vehicle several years ago. And these days, GM’s determination to be regarded by the public as an environmental leader of the industry is palpable. Begin with its breakneck development of the 2010 Chevrolet Volt plug-in hybrid and the willingness of top management to hold the project team’s feet to the fire publicly, in GM blogs and in comments to the press.

Add GM’s plans to debut a new hybrid-electric vehicle every few months for the next three years. Behold the fact that GM made fuel economy the central feature of its advertising on Super Bowl Sunday. Consider that “From Gas Friendly to Gas Free” has become Chevrolet’s most important advertising slogan these days, supplanting “An American Revolution.” And throw in GM’s new, potentially game-changing investment in a cellulosic-ethanol startup company.

David Cole has been a student of GM since his father, Ed Cole, was company president in the Sixties. Now, Cole is chairman of the Center for Automotive Research in Ann Arbor, Mich. And from his long perspective, Cole said that “GM has just historically never talked about” its capabilities to produce fuel-efficient powertrains. “But they are doing it now. They’ve got stuff queued up, and as you see it unfold, it’s going to be more and more impressive to people.”

Al Weverstad agreed. GM’s executive director of environment and energy said that GM has “taken a look and said that we want to be here through the next century. And if so, we’ve got to be part of the solution.” He said GM wants “people to know that we’re not just the company that makes Suburbans and gas-guzzlers. We need a conscious overall expose' of our complete product line and to let consumers know all the other things we’re working on.”

At the same time, Weverstad conceded, “We’ve got to be careful. We certainly don’t want to have our picture painted in The Wall Street Journal with a long nose.”

One illustration of both the growing importance and sensitivity of GM’s green positioning was the decision by Brent Dewar, GM’s vice president for North American field sales and service, to spend an hour online in February with environmental bloggers answering their questions and charges about corporate “greenwashing.” The session followed critics’ attacks on GM not only in blogs but also in other online quarters, including GM’s own 100th-anniversary web site.

“It was very positive,” GM spokesman John McDonald said of Dewar’s experience. “It [means that GM is] talking 'with,' not talking 'at,' our critics and supporters – and engaging a whole lot of people who aren’t really sure yet what the answers are.”

A recent comment by Vice Chairman Robert Lutz also underscored the difficulties that GM will continue to face as it jostles for the green mantle. In February, GM’s colorful product chief dismissed global warming a “total crock of s---.” His boss, GM Chairman Rick Wagoner, quickly attempted damage control by noting that Lutz’s comment was a personal, not a corporate, position. But Lutz defended himself in his popular corporate blog, saying those “spewing virtual vitriol” at him for his remark were “missing the big picture” being painted by the company’s accomplishments in fielding green technology.

But such are the high-profile, and ever-shifting dynamics, of green positioning that even what long has been viewed as a major positive in GM’s environmental quiver could prove to be a bit of a broken arrow.

GM has been the U.S.-industry leader in fielding vehicles that are E85-capable – that can run on a mixture of 85 percent gasoline and 15 percent ethanol. As recently as a year ago, there was nothing but positive in this leadership role for GM’s environmental credibility, because the nation was in the midst of a major push to boost capacity for making ethanol from corn as a way to cut dependence on gasoline.

What a difference a year makes. Now, the question synonymous with the boom in corn-ethanol production is whether it has become the biggest contributor to a spectacular run-up in world food prices, as farmers sell more crops to the thirsty – and in some cases, politically subsidized – energy market.

“People have been for and against corn ethanol from the beginning,” noted Derek Tronsgard, U.S. director of Prime Research Inc., in Ann Arbor, Mich., which monitors and analyzes American news-media coverage of corporations and issues. “But now, the people who think it is a negative have a good tail wind going.”

Of course, GM is ready with an answer for what spokesman McDonald called “a persistent, commonly held misbelief” about the relationship between corn-ethanol demand and food prices; it centers on the fact that 81 cents of every corn-price dollar is for fuel, transportation, packaging and non-farm costs, not the base costs relative to ethanol demand.

But something else that GM is doing harbors the potential for blowing the corn-ethanol controversy into oblivion and, over the long term, for single-handedly delivering green preeminence. That is the company’s investment in Coskata Inc., a Chicago-area startup that is completing a pilot facility for producing cellulosic ethanol in significant volumes.

If GM someday can claim to have brought the world a way to make ethanol from old tires, plastic bottles, weeds and other non-crop sources, it may win the green mantle for all time.

Toyota

Toyota has been the presumptive leader in the industry’s green sweepstakes since it put the first Prius hybrid on American streets in 2001. And the company has nurtured its lead since then by deploying the industry’s largest contingent of hybrid vehicles by far, a selection that continues to grow.

But Toyota’s claim to the green mantle has been tarnished lately by consumer doubts about the price-worthiness and fuel-economy performance of hybrids, in general, as well as by the fact that clean diesel is making a strong bid as an alternative technology. Meantime, Toyota also has been introducing new vehicles in segments such as pickup trucks and large SUVs that are decidedly not environmentally positive.

“The two primary pillars that people want to see when they visualize Toyota is ‘quality’ and ‘green,’” Cole said. “Now, GM is not as ‘evil’ as it once appeared when it comes to things environmental, and Toyota isn’t as ‘green.’ Proportionally, the negative impact of that on Toyota is probably more important than the positive impact on GM.”

It isn’t clear whether Toyota’s American executives perceive this loss of status. At least they don’t concede it. “We don’t see that there is a [green] mantle to win or to lose,” said Mary Nickerson, Toyota’s national marketing manager. “Our commitment to the environment is part of how we conduct ourselves and our business. We’re not positioning ourselves in any way.”

Yet, Nickerson maintained, “No one has the history that we have -- and the dealerships with the history to stand behind – our products. People can go to our web site every day and see the carbon dioxide that’s been saved by driving our vehicles.” Toyota also is sponsoring what it calls Highway to the Future: Mobile Hybrid Experience, a traveling, hands-on “museum” that is in the midst of an 18-month odyssey to teach Americans about the company’s hybrid technology.

In general, Toyota is reinforcing its environmental convictions in three ways, Nickerson said. There are its products, ranging from its hybrid lineup to “additional technologies and alternative fuels” to its development higher-capacity lithium-ion battery technology to propel Toyota’s rival to the Chevrolet Volt extended-range electric vehicle.

Second, Nickerson said, is how Toyota approaches its business – continually seeking ways to reduce the environmental footprint of its products, for example. The use of more natural fabrics inside Toyota vehicles is one major example.

Third, Toyota’s facilities are becoming lighter on the environment. For example, Toyota has what Nickerson called “a zero-landfill commitment, where we’re constantly focusing on how we can recycle and re-use our products. And we’re helping dealers to design ‘green’ dealerships.” Such are ways for the company to “pay it forward” to U.S. communities, Nickerson said – and, presumably, to remain at or near the front in the industry’s green derby.

Ford

No other automaker has dropped as far as quickly in the race for the green baton as Ford. After its success debuting the first hybrid-powered SUV, a version of Ford Escape, in 2004, and plenty of green rhetoric coming from the office of former CEO William C. Ford III, the company clearly has dropped back in the environmental esteem of the American public.

But far from giving up, Ford executives have pledged to renew their attention to green positioning even as they redouble their product-development efforts in the environmental arena. For example, the company is touting its new EcoBoost initiative. This family of gasoline engines, Ford said, will use turbocharged direct-injection technology to deliver up to 20 percent better fuel economy, up to 15 percent less carbon-dioxide emissions and improved driving performance over bigger engines. Ecoboost technology will be deployed for up to half a million Ford vehicles a year in North America within the next five years.

“Everyone says that they’re very concerned about the environment, but that percentage drops off significantly when they’re asked to make a sacrifice for it,” said John Felice, Ford brand marketing manager. EcoBoost, he said, “is a way to satisfy” all the components of a green consciousness.

Ford also has made “green” one of the “four pillars” of its new, long-term, omnibus marketing campaign under the overall rubric, Drive One. (The other three pillars are safety, quality and nifty technology.) Ford is doing other things as well to better leverage its marketing savvy to remind American consumers that it has some claim to leadership in the green sweepstakes.

On a recent episode of Extreme Makeover: Home Edition, one of the primary TV-advertising venues for Ford, the company developed and installed a solar-powered elevator in the home of a needy family. “They’ve been thinking about the environment” at Ford, said Ty Pennington, the show’s popular host, as he explained the elevator.

Chrysler

Chrysler is widely regarded as the laggard among major OEMs when it comes to green positioning. The reality is that existential problems have predominated at the company lately as it seeks to improve product development, Chrysler has a number of priorities in addition to environmental concerns.

But clearly, Chrysler executives have moved "green" to the top of their priority list. Among other things, the company is debuting hybrid versions of its otherwise thirsty Dodge Durango and Chrysler Aspen SUVs. It also is “focusing on next-generation materials for comfort, convenience, and an environmentally friendly experience,” said Peter Arnell, Chrysler’s acting chief innovation officer.

“There are a lot of different ways to achieve” green positioning, said Deborah Meyer, Chrysler’s chief marketing officer. “And you have to work at all of them. That’s what’s cool about all the innovation going on at this company.”

And Arnell suggested that getting closer to the green mantle may not be as difficult for Chrysler as many outsiders perceive. He said that, so far in the industry, what OEMs have accomplished for the environment “has been more lesson-based than solution- or success-based. (Toyota’s) Prius is an example of that: What it did as a message to the world is much more important than its measured effects on the environment. But by making that commitment, (Toyota) inspired and encouraged that this path can be followed by a whole industry.”

Chrysler could possibly catapult to the front of the green derby, Arnell explained, by introducing some sort  of game-changing technology or idea in the manner of Apple with its iPod.

“You would not describe (Apple CEO Steve) Jobs’ introduction of the iPod, and its success, as bringing up the tail of the MP3-player category nine years after it was created,” Arnell said. “Early in doesn’t necessarily mean ‘leader’ – and tail end doesn’t necessarily mean ‘loser.’”

Honda

In contrast to Chrysler, Honda long has been given vast credit by American consumers for its green credibility – based on its historical predilection for fuel-efficient engine technology, for example, as well as its joint leadership with Toyota in hybrid-electric vehicles. In recent online discussions of fuel economy and other environmental topics, in fact, Honda boasted the highest regard of any OEM, according to BrandIntel.

“Environmental awareness is a big part of everything that we do, from designing products that are efficient and eventually recyclable, to manufacturing our products with minimal environmental impact, and even building green facilities as we expand,” said Honda spokesman Chris Martin. And as far as “positioning” is concerned, he said, “Our products lend themselves better to these messages than others.”

Honda also joins Nissan in making a commitment to diesel technology: its Acura upscale division next year will roll out a diesel-powered version of the TSX sport sedan, and a Honda-badged model will follow.

Nevertheless, there is a sense that Honda may not sustain public-perception advantage, especially as its rivals fiercely fight to wrest away the green mantle.

Nissan

Nissan is playing catch-up to most of its rivals in this area. But spokesman Fred Standish said the company is focusing “more on the mid-term, two to four years out, than the short term. We’re dealing with some of the changes that we have to make.”

Among other things, Nissan is developing a proprietary hybrid system that is due for use in a vehicle in 2010; right now, its Altima Hybrid employs a Toyota-made system. Nissan also will have a clean-diesel debut in its Maxima sedan in 2010. “On the vehicle front,” Standish said, “we’re not putting all our eggs in one basket.”

In fact, Nissan may be able to name itself among the world’s most aggressive automakers in terms of producing dedicated all-electric vehicles. It has announced electric-vehicle programs in Denmark and Israel, where both vehicles and the required infrastructures will be introduced by 2011, Standish said. “By 2012,” Standish said, “we will be mass-marketing dedicated electric vehicles in the United States.”

Photos:

1. Ford Focus Flexi-Fuel with wind turbine that provides power at the company's Dagenheim manufacturing site in the United Kingdom (courtesy Ford Motor Co.)

2. Badging from GM's 2009 Chevrolet Sierra Hybrid pickup, the first fullsize pickup to leverage hybrid-electric technology (courtesy General Motors Corp.)

3. Toyota's Lexus LS600h L hybrid-electric flagship sedan (courtesy Toyota Motor Corp.)

4. Honda Motor Co. Ltd. president and CEO Takeo Fukui and the 4-cylinder diesel the company's Acura division will launch in the U.S. for 2009 (courtesy Honda Motor Co. Ltd.)

5. Nissan Hypermini electric vehicle (courtesy Nissan Motor Co. Ltd.) 

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