A New Age of Regulatory Requirements As imperative as it is to understand what the Ford Motor company is doing to improve its environmental footprint and how it is planning to reduce environmental impacts and advance sustainability efforts, it is just as crucial to understand why Ford, like other automobile manufacturers following suit, are undergoing such a seemingly challenging transformation. No industry likes to be regulated, especially by third party entities and lobbies with their own agendas. In a world where the bottom line ultimately drives all business decisions, companies coming to terms with answering to a “higher authority” is often a challenge in and of itself. Stakeholder management, however, is a key component of doing business, and automakers are not above the law, beyond the reach of the government, or outside the scope of …show more content…
First, transparency in the industry has been a huge roadblock to gains in sustainability efforts. Consumers have had only very limited information about fuel economy and its impact on future expenses. In an effort to educate consumers and provide them with information critical to making responsible vehicle purchasing decisions, the EPA’s new fuel economy labels provide user-friendly and comprehensive data. Armed with new information and access to transparent studies, a major issue remains: consumers’ loss aversion. Consumers are simply unwilling to fully rely on possible future fuel-saving benefits in the face of uncertain future petroleum prices. What this has meant in the past is that consumers have shown greater preference to factor their affinities towards other vehicle attributes such as increased vehicle size, off-road ability, power for acceleration, electronic or luxury amenities – all of which automakers have extensively marketed ("New Automobile Regulations: Double the Fuel Economy, Half the CO2 Emissions, and Even Automakers Like It",