By Roxana Tiron - 06/05/08 06:43 PM EDT
An upstart business venture backed by former auto executives wants Congress to revise safety standards for law enforcement vehicles in an effort to capture a share of the market dominated by Ford Motor Co.
Atlanta-based Carbon Motors Corp. has a bold plan: to completely redesign police cars by building them based on the needs and input of police. It hopes to compete with Ford , which now controls 80 percent of the police car market. General Motors and Chrysler have much smaller stakes.
But its odds could be improved if Congress changes the safety regulations for police cars.
Police departments commonly buy cars that have been approved as safe by the National Highway Traffic Safety Agency (NHTSA). Those cars are then outfitted with lights, sirens, computers and radios.
The newly outfitted cars do not have to meet any new safety regulations. That’s what Carbon Motors would like to change.
If Congress required the outfitted cars to be tested by the NHTSA, it could boost the new company, since its vehicles would be built from the ground up as cars designed specifically for police. The vehicles will be tested when they come off the assembly line to meet federal safety standards.
The NHTSA only regulates the standards for vehicles that come off the assembly lines.
“All cars [sold to the police] have to meet the federal standards,” said an NHTSA spokeswoman. “Any types of add-on things in the police cars that are put [in] after the fact —those are state-by-state issues.”
The company, created by former Ford executive William Santana Li, is still looking for a manufacturing site for its E7 diesel-powered vehicle, and has yet to hire any lobbyists.
But it does boast an impressive roster of advisers to its board, including former Homeland Security Secretary Tom Ridge; Lee Hamilton, vice chairman of the 9/11 Commission; and Lee Brown, former President Bill Clinton’s drug czar.
“It is an excellent idea. I wish I had thought of it,” said Brown, who has been introducing the idea to law enforcement officials around the country. He said he would not hesitate to meet with members of Congress.
“Once it is exposed, there is no downside,” he said.
If the new standards were imposed, the cars Ford sells would have to go through safety inspections after they are sold and outfitted. Some law enforcement officials believe that could be a very costly, time-consuming and cumbersome proposition. In addition, they said, vehicles in the same department may not have the same equipment and therefore there would not be a uniform basis to test the vehicles.
Ford doesn’t seem worried about the competition, and notes that its outfitted vehicles are completely safe.
“Ford partners with law enforcement agencies to provide high-quality vehicles that meet their needs and comply with all federal motor vehicle safety regulations,” said Michael Moran, a Washington spokesman for the automaker. “It would be hard to comment on the viability of a startup company.”
Even though the company would not disclose any numbers, the police car business has been a lucrative one for Ford and the company intends to keep dominating the market. Other auto industry sources said about 75,000 cars are sold to law enforcement agencies annually.
Ford has police advisory boards that work closely with law enforcement agencies, according to industry sources. A proposition such as the one from Carbon Motors could also create strong resistance from companies that currently supply the equipment for police cars, industry sources said.
Another potential problem for Carbon Motors is that its E7 would be hard to sell on the civilian market once a department takes it out of service. Most police departments sell their used cars and refurbish equipment in order to save money, these sources said.
But Li counters that the E7 is comparable in price to all the other police cars and will last a lot longer. A base E7 vehicle would sell at $29,000 and could go up to $74,000 if the departments exercise all equipment options.
By comparison, an outfitted Ford could cost as much as $60,000.
Because it runs on diesel, the E7 would be more fuel-efficient, and owners would get a 40 percent savings, according to Li. The 425,000 police cars around the country now burn a gallon of gas every six to 14 miles at a cost of $1.5 billion.
The E7 is currently being designed and engineered in Arizona, California, Georgia, Michigan, Germany and the United Kingdom. Ultimately, Li projects that his company’s manufacturing line will create 10,000 direct and indirect jobs in the U.S. and have a $3 billion economic impact.
But auto analyst David Healy with Burnham Securities Inc. is skeptical that the Carbon Motors operation will get off the ground.
“I would not hold my breath for that to happen. There are 50 state police departments — I do not think they want to be meddled with.”
Healy holds no stock in the auto-making business.