Ford boss says higher U.S. fuel taxes not so bad

Ford CEO Alan Mulally has told reporters at the Management Briefing Seminars today that higher fuel taxes would be a better alternative to raising Corporate Average Fuel Economy (CAFE) to reduce fuel usage and emissions. The CAFE proposal being voted by the US government would see carmakers forced to lift their fleet average fuel economy figure to 35mpg for cars by 2020. However, according to Mulally, more efficient cars won’t actually make consumers use less fuel.

«The numbers being talked about today are not technically possible,» Mulally explained in regards to the CAFE proposal, adding that a better solution would be to tax fuel more at a higher rate, similar to what they do in Europe where prices can reach up to $6 per gallon. We’d like to see how well that goes down with the American car buying public.

Meanwhile, at the same seminar, Mulally revealed that Ford was on track to return to profitability by as early as 2009 despite declining sales predicted for the US, reports Reuters. You may recall that just last year Ford lost a massive $12.5 billion, but things are already looking up. Ford announced a surprise profit of $750 million in the second quarter, so Mulally’s 2009 claim doesn’t seem so far fetched.