Posted on 16-12-2002

GM & Ford Shareholders File For Climate
By J.R. Pegg (Photo shows Sister Patricia Daly, a Caldwel1 Dominican nun
from Newton, New Jersey)

WASHINGTON, DC, December 12, 2002 (ENS) - Shareholders of Ford and General
Motors (GM) have filed resolutions to pressure both automakers into more
aggressive action on reducing greenhouse gas emissions from their plants
and vehicles.

The resolutions, filed by religious groups that belong to the Interfaith
Center on Corporate Responsibilities (ICCR), indicate that the relative
inaction by both Ford and GM on climate change is not only an environmental
concern, it is also a risk to the financial health of the companies. "This
isn't just about what is bad for the environment, it is also about what is
bad for investors of General Motors and Ford," said Sister Patricia Daly,
executive director of the Tri-State Coalition for Responsible Investment,
which represents some 30 religious orders and Diocesen members from the
states of Connecticut, New Jersey and New York. "The high greenhouse gas
intensity of U.S. vehicle manufacturers undermines the competitive
positioning of U.S. automakers both here and abroad, as the world,
including their competitors, move forward to address climate change," said
Daly, speaking on behalf of her organization as well as the ICCR.

The resolutions call for both automakers to measure and report to their
shareholders on carbon dioxide emissions from their plants and products by
August 2003 and to commit to significantly reducing those emissions by
2012, with further reductions by 2020. They also call for an evaluation of
what new public policies would enable and assist the company in achieving
those emission reductions. Cars and trucks are a major source of carbon
dioxide, a primary greenhouse gas that has been linked to global warming.
U.S. cars and trucks are responsible for some 20 percent of the country's
carbon dioxide emissions, accounting for more carbon dioxide emissions than
all but three countries in the world.

According to Daly, these resolutions were triggered by the continued
efforts of GM and Ford to undermine efforts to increase fuel economy
standards at both the state and federal level. GM and Ford also had the
highest carbon emissions of the top six U.S. automakers in 2000, Daly said,
and GM's "carbon burden" grew 13 percent between 1990 and 2000, with Ford's
increasing 26 percent over the same period.

These are the first global warming resolutions filed by GM or Ford
shareholders since 1999. Those earlier resolutions, which were filed by
many of the same groups, were withdrawn as a sign of support for the
automakers' withdrawal from the Global Climate Coalition (GCC), a now
defunct industry group that challenged evidence of global warming and
lobbied against climate change initiatives. Recent lobbying against a
Senate bill aimed at increasing fuel economy standards as well as
opposition to a California law requiring automakers to cut emissions and
sell zero emission vehicles finally drained the remaining positive capital
either company had earned from leaving the GCC, Daly said. The resolutions
cite the failure of GM or Ford to "to propose alternative plans to achieve
comparable environmental results."

Ford and GM, for their part, claim their fuel economy is increasing and
that they are already doing much of what these resolutions ask of them.
Ford points to its public commitment to improve the fuel economy of its
sport utility vehicle (SUV) fleet by 25 percent by 2005 as well as to cut
carbon dioxide emissions of its European fleet and manufacturing plants by
25 percent by 2008. The company said a record of its greenhouse gas
emissions is publicly available. GM officials say their company's
greenhouse gas emission figures are available in its annual sustainability
report as well as on its website. Both automakers are pursuing hybrid
vehicles, with Ford aiming to release a hybrid SUV next year that the
company predicts will get 35-40 mpg in the city and 27-29 mpg on the
highway. By comparison the 2003 Ford Explorer XLS gets 17 mpg in the city
and 21 mpg on the highway.

The shareholders who filed the resolutions and their supporters believe
both firms could be doing much more. Japanese automakers, notably Honda and
Toyota, have seized the lead in hybrid vehicles and fuel efficiency, and
have also recently debuted hydrogen powered fuel cell vehicles. A recent
report ranking the environmental performance of automakers by the Union of
Concerned Scientists found Ford and GM trailing Honda, Toyota and Nissan.
"Ford and GM should be shedding environmental liabilities instead of being
stuck in the mud in yesterday's economy, while the Japanese competition
steps boldly ahead to capture the emerging market for greener vehicles,"
says Kevin Knoblach, executive director of the Union of Concerned
Scientists. "These companies are not at a technological disadvantage
compared to Honda or Toyota," he said. "Rather, these companies have been
less aggressive and more risk averse at putting the technologies on the
road." Companies with highly rated environmental records perform better
financially, Daly said, and the filers of these resolutions do not want to
see Ford and GM fall further behind Japanese automakers who have more
readily reacted to concerns over global warming. According to the
shareholder resolutions, available and emerging improvements to
conventional technologies could allow automakers to build a fleet of
vehicles that average some 40 miles per gallon (mpg) by 2012. Hybrid
gasoline-electric vehicles could boost that average to at least 55 mpg by
2020, the shareholders add, and these "fuel economy gains can be achieved
without sacrificing safety, comfort or utility for consumers."

The current U.S. fuel economy standard, known as the Corporate Average Fuel
Economy (CAFE) standard, for cars is 27 mpg and has not been changed since
1985. The standard of 20.7 mpg for light trucks was established in 1996.
Critics of raising either standard say smaller, more fuel efficient
vehicles are less safe, and mandating higher fuel economy would limit
consumer choice. Officials from the Department of Transportation have
drafted a proposal to for a 1.5 mpg increase in the CAFE standard for light
trucks, which will be phased in over three years. Environmentalists have
labeled this change "miniscule."

The request that Ford and GM increase fuel efficiency and reduce greenhouse
gas emissions has national security implications, Knobloch said. U.S. cars
and trucks consume some 11 percent of the world's total oil production and
account for 40 percent of U.S. annual consumption. The United States
consumes some 20 million gallons of oil a day, a figure expected to grow to
27 million by 2020, and more than half of the oil consumed in the United
States is imported. Less pollution from vehicles could also have a
noticeable impact on public health, Knobloch added. Nearly 100 million
Americans live in areas with levels of smog, particulate matter, sulfur
dioxide and other pollutants deemed unhealthy by the U.S. Environmental
Protection Agency.

Neither Ford nor GM would comment directly on the resolutions, which will
be voted on at the companies' annual meetings in spring 2003. How pressured
the automakers feel by these resolutions, filed by groups that hold only a
fraction of their stock, remains to be seen. Shareholder resolutions on
global warming are on the rise and are gaining more support, according to
Doug Cogan, deputy director of the Social Issues Service of the Investor
Responsibility Center (IRRC), an independent research firm that tracks
proxy voting activity. There were 19 global warming resolutions filed in
2002, with support levels averaging 18.8 percent, Cogan said. The
resolutions filed with GM and Ford in 1998 and 1999 averaged less than five
percent support, but Cogan predicts the current resolutions are likely to
find "double-digit support." "The emerging trend is that institutions are
coming to see global warming as an issue that could have a material impact
on the companies they own," Cogan said. "They increasingly feel they have a
fiduciary responsibility to support more disclosure from management on this
issue."

A copy of the shareholders' resolution can be found by clicking here
www.hastingsgroup.com/GM_Ford_global_warming_resolution.pdf