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Ford builds Transit Connect passenger vans to avoid "chicken tax"

Consumer Reports News: September 23, 2009 11:34 AM

When my colleague Jim Travers and I had a chance to drive the new Ford Transit Connect, we kept asking ourselves the same question: Is it a commercial van or a passenger van? Ford said it was initially aiming for commercial buyers. Yet almost every time we saw a Transit Connect on the auto show circuit, it was set up with a three-passenger rear seat and side windows. (Taken a step further, we could envision it configured as a small camper.) There was a clear disconnect between presentation and reality.

We’re not the only ones left wondering if this is a passenger vehicle or not. Port authorities must wonder, as well. It turns out, the vehicles are both, and poultry is to blame.

The Ford Transit Connect is converted from passenger to cargo vehicle when it arrives in the United States, thanks to the "chicken tax," according to the Wall Street Journal. The so-called chicken tax is a 25-percent levy on imported commercial trucks and vans levied by President Lyndon B. Johnson in retaliation for a tariff Germany placed on American chicken exports. At the time, the only foreign automaker selling trucks in the U.S. was Volkswagen with its Transporters.

Since then, almost all foreign carmakers have sought creative ways to circumvent the tax. At first, Volkswagen marketed its Transporters as "station wagons" complete with up to 23 windows and seating for up to nine passengers. Later, VW and other automakers built factories in the U.S. and moved production of its trucks there.

Now, according to the WSJ, Ford has found a new way around the tax for its Transit Connects. The company reportedly ships all the vans from Turkey, where they are built, to the United States with rear seats and windows installed. As passenger vans, they are subject to a much lower tariff of 2.5 percent.

When they arrive here, they are shipped to an independent company, where the rear windows and seats in most Transit Connects are removed. The windows are replaced with solid panels to turn the Transit Connects into cargo vans. The seats and glass are then shredded and recycled.

We’re enthusiastic about the Transit Connect and the prospect of seeing it replace less-efficient large vans. But even if Ford found this is the cheapest way to bring them here, this seems like an enormous waste of energy and natural resources. On the other hand, it may mean a passenger version may be relatively affordable to offer, should there be demand.

Eric Evarts

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