Ford Death Watch 13: Ford Feels Edgy

Star Trek based many of its best episodes on simple homilies. In “The Lights of Zetar” (Star date 5725.3), Memory Alpha is attacked. Creatures from the planet Zetar concoct an energy storm that ravages the planetoid. The Federation’s main computer database, containing all of the cultural and scientific data they’ve ever gathered, goes fubar, and with it, the Federation. What did they expect? To put a little Yoda spin on it, into one basket all eggs should not go. OK, now, Earth date October 16, 2006. Dearborn rolls out the Ford Edge. See what I mean?

It’s been a month since Ford's “Black and Blue Friday.” The product(s) driving the new new Way Fordward are rolling off assembly lines. The Ford Edge and Lincoln [Mary] EmKayEx carry FoMoCo's financial future in their five passenger hulls. Mark Fields is on record as stating that these are the Blue Oval’s halo cars, not the rarified Shelby Mustang variants. Halotosis or not, industry analysts and market mavens will keep keen eyes on the cross border crossovers, as their success or failure will no doubt foretell Ford’s.

Early Edge opinions are favorable. While not personally sold on the CUV, TTAC’s resident west coast wheelman Jonny Lieberman was impressed with the Edge's interior, engine, ride and handling. The buzz sounds promising; Ford reports that some 50k webheads have specced-up virtual people movers. FoMoCo hopes this translates into 135k units annually: a razor’s edge shy of one percentage point of the entire United States automotive market. With base models starting at around $26k, that translates into about $3.2b in much needed revenue. Given estimates of a crossover boom to 3.2m sales by 2010, the promise of profits by ‘09 could boldly move onto the horizon. Of course, there are a few “challenges” to that theory.

The Edge’s CUV competition is already a whole product cycle ahead of Ford. An estimated 1.6m SUV refugees have upped stakes for Dearborn’s foreign competition. This year, Nissan has flogged over 62k Muranos to Ford’s “Phil” and 16k FXs to his more affluent buds. Honda has reached out to 116k CR-V customers. In September alone, ToMoCo moved over 11k RAV4s and Highlanders. Each. The General has badge engineered troops ready to invade the segment and DCX is already there. And speaking of a cloak on invisibility, Ford’s Freestyle is [still] floundering about in this genre.

The Edge must lure the public back to the Blue Oval fold. Assuming it does, that’s one segment, one basket. Mark “My Title is Huge” Fields told the press on Monday that The Blue Oval plans to ride out the current vehicle lineup until 2008. Product led turnaround indeed! With nothing new in the pipeline, with its history of model neglect, any FoMoCo interest generated by the cross-border crossover is bound to cool, and quick. And then… nothing much.

Don’t take my word for it. After spending “a lot of time looking at the where the market is going,” Marky Mark Fields publicly declared that “on a scale of 1-10, the revisions to the 2007-08 product program rate a 2.” In other words, the market may have changed, but those ships have sailed. As for the products arriving at the end of the decade, Fields rates the amount of revision as “something like a 6 or 7.”

That's four years away. No wonder the company is feeling, as the Brits would say, at sixes and sevens. Ford projects its market share to continue its decline, bottoming out at around 14%. Given that drop, given dwindling sales of profitable SUV’s, expensive production cuts/buyouts and their models' inherent cost disadvantages vis-à-vis non-union competition, it’s difficult to see how the Darlings of Dearborn can generate sufficient profits to keep the lights on. Selling fewer quantities of the same less profitable vehicles is no recipe for enlightenment. Even if the Edge becomes the segment leader, it’s only one product, and simply not enough to cover the losses left in the third seating rows of big SUVs.

In his first company-wide email, in his second week at the helm of America's soon-to-be third largest automaker, CEO Alan Mulally warned his [remaining] troops that Ford needs more than an Edge to keep its edge. “Pockets of success aren't enough. Not today. Not in this competitive environment. We need success across our entire enterprise. To get there, we need to have a universally agreed to and understood business plan. It needs to be a single plan, and it needs to work for the entire company.” What? A new new new plan? Apparently so. According to Ford's Thirty Five Million Dollar Man, this one will be built (remember: it’s a work in progress) around PEOPLE, PRODUCTS and PRODUCTIVITY.

While it’s nice to hear that Alan's minding his P’s, there’s a big Q hanging over the entire enterprise: can Ford find more baskets and make some better eggs? Or, if you prefer, it remains to be seen if Ford's got the starships needed to re-boot and scoot.