Go Further Down: A Proactive Ford Can't Keep Up With Tanking Europe

No money is exactly the problem. Poor economy and they're taxed within an inch of their lives.

@panzerfaust I've said it before, many disagree with my prediction, but I'll say it again: While Ford's premium pricing creep (or sprint) has worked a short term miracle under Mullaly during a time when Ford was able to cuts massive costs out of its structure (thanks to leverage on labor and the ability to cut excess manufacturing capacity due to GM & Chrysler's prepackaged bankruptcies shedding legacy costs and instituting a two tiered hourly wage), Ford will find that it's just not a feasible strategy over the longer term. We're now in a world where major global manufacturers of large volume badged cars, such as Toyota, Honda and even Volkswagen are holding the line on price (or even cutting prices in real terms), and if a manufacturer can't market its product as a genuine premium brand, getting consumers with high disposable incomes to buy that marketing (ala Audi), it will inevitably have to: a) Dramatically scale back production to maintain pricing power (and this is hardly possible for Ford, IMO, given its large worldwide manufacturing footprint), or b) Lower prices to preserve volume, and hopefully, market share. The latter is far and away the path of least resistance for Ford, from both a business AND a political/labor perspective.

@DeadWeight It'll be interesting to watch. So far, one of the most successful bets for the future has been Renault-Dacia/Nissan-Datsun and on an Eropean level, VW-Skoda. Bertel himself has said this is the way to the future and I believe him cause Bertel really knows the business. At this time, Ford does not seem to have any strategy like this. Maybe they will be able to pull off the whole full line One Ford thing (from subcompact to luxury), but it remains to be seen. Anyways, it'll be fun to watch.

@Marcelo de Vasconcellos The world's manufacturers are going through a tough restructuring (rationalisation) phase. This will require a long period of time to become apparent. I can forsee many buyouts, aliances and partnerships being formed. Not all will be successful. I do think Ford's one vehicle model will work. It's working for the Germans's and Asian manufacturers and they are the one who will be there in the end.

@Marcelo de Vasconcellos Hey Big Al! I agree, mostly. The Japanese had to invente Acura, Lexus and Infiniti in América to sell luxury cars. They haven't made a dente in Europe in that area. In South América neither. Hyundai may be on to something with the Genesis though. VW is another exception. Their luxury offerings have all had lukewarm success, except when packaged as Audi. However, Bertel has pointed out that Europe is dying (demographically). The future is in SE Asia, South America, India, China, the Arab world. Many of these places are growing (economically and demographically) and millions upon millions of people are buying their first cars and many millions more gream of the day they can. A low cost brand seems to be of the essence. In Brazil, Ford can sell from the Ka to the Fusion in good numbers. Fusion is a luxury car here, almost on par with the Germans. With the advanatage of being more discreet. However, our Ka has nothing to do with the Euro one as soon the Brazlian VW Up will share little with the European one except for the sheetmetal (here, it'll seat 5 for example). I really can't make my mind up anout One Ford, but something tells me Ford will be forced to change that. Don't worry, it won't affect you. It'll be our loss.

@Marcelo de Vasconcellos I agree with the prestige Japanese manufacturers, except I do think Lexus has a better chance of maintaining success over the others. The US is their main market. I see only the German's (even then maybe 2 will be left), Fiat, Renault/Nissan being the only Europeans left in the end. Ford will eventually grab GM (that's my crystal ball). This comment will cause a stir. And the smaller Japanese players will be bought out, maybe even by the Koreans or Chinese or by Toyota. Nissan/Renault will buy PSA and then maybe Mitsubishi will go to them. And the Chinese, who knows what will happen there. It's like the world vehicle manufacturing market in the 40s at the moment. But it will rapidly transform. That's my crystal ball guess at the moment (subject to change:). Some may not choose to believe. I made a big call:) We will see.

@Marcelo de Vasconcellos Hey Big Al! I just took a peek into my Crystal ball and saw remarkably the same things! The only major discrepancy is that I saw GM independente from Ford. The rest, is pretty much the same.

@Marcelo de Vasconcellos The reason for the Ford/GM call is the US will want to have a mega manufacturer to maintain as much a monopoly of the industry.

@DeadWeight hey big al, oh, now i see. Economic nationalism is on the rise in Americans, so i see your point. I think fiat will be more interested in suzuki, cause of india, than in mitsu. Bmw will be sold as soon as family loses interested. Mercedes, i have no idea. Chinese too murky yet to tell. The rest i agree with you.

@Marcelo de Vasconcellos The auto industry is 20+ years behind the aviation industry in restructuring, but it will follow a similar path. Maybe as not nationalistic. The vehicle industry will also have several more dominant players than in the aviation industry. The civil aviation big players are now Boeing, EADS, Bombardier and from your country Embraer (a couple more, but more military). In the 70s their was at least 20 players in the aviation industry, now 6 biggish ones. Just like the aviation industry you will end up with common standards for vehicles globally. Maybe 6-8 manufacturers will end up owning and controlling most vehicle manufacturers. This doesn't include the Chinese. There are several causes for this, one is the cost of developing technology. The setting up of future massive manufacturing hubs ie Thailand. This is to maintain competitiveness. This is going on now. Just like the aviation industry components will be more global than now and sent to where ever required. I work in the aviation industry more or less on the 'coal face' on the mechanical side of the business. But I find the motor vehicle industry interesting.

@Marcelo de Vasconcellos BMW will go to Toyota. For two reasons, first Toyota has the cash and lots of it, second BMW and Toyota are working together with light diesels and hybrids.

@Marcelo de Vasconcellos Hey Big Al, BMW, in its current form, has no where to go but down over the long term. They are collaborating with Toyota, have collaborated with Peugeot and Chrysler for diesels and smaller gas engines. I think the Qandt family should really think of selling it off pretty soon. Wait a while until not only Toyota, but others like Ford, Fiat Renault-Nissan are flush with cash and they could have the deal of the century. If they wait too much and the ticking time bomb of European demographics takes its toll, they might be left with a rich history but no means to compete (a la Jaguar or Land Rover before the takeovers). In our hasty analysis we forgot Tata and Mahindra. I think that because of their origin they too will become bigger over time. I agree with the aviation industry, but there's one key difference: there are many more buyers. We may have hundreds of airlines, but car buyers are in the millions. I think that guarantees space for at least 10 or 12 world players, big and small. But there does seem to be a strong consolidation movement in that the big players (Toyota, VW, Renault-Nissan and even Ford, Fiat-Chrysler and GM) are getting bigger and the mid players (PSA, Honda) are going no where, with Hyundai the possible exception (all it takes is a few botched launches for them to become vulnerable again). That leads to an interesting question. Honda. They also need to grow, and fast. But like Ford, they seem unwilling or unable to dwell into the low cost brand strategy. In its current form Honda remains vulnerable. Thanks for all the speculation. Gazing into the crystal ball is always fun, and harmless for us with no real stake in the game.

I just love these sorts of speculations. Don't rush too much in writing BMW off. With MINI and RR they've shown that that they can compete without the BMW name. Add to that that the BMW name is worth a *lot* worldwide they are not in any sort of crisis on a worldwide basis. As long as they can keep the finances under control they're future looks ok. Honda is about in the same headspace except there's not the branching out except for Acura. Toyota acquiring someone is interesting. When they took over Fuji Heavy Industries I was amazed but I think that they only have a chunk, controlling interest probably, but not a total take over. I don't think that Toyoda himself would like anything not close to him to have to rule over. I can't see Toyota being comfortable owning a European company. I have been surprised that there haven't been more Magna-Steyrs pop up world wide. As the cap-ex gets reduced I'm sure someone will offer up that sort of solution to the automakers as they need to ramp up production on particular models. Maybe Ford will see this as their future in Europe.

@Dimwit Roll's and Mini's are powerful brands without the assistance of BMW. BMW only bought them because of their stature as brands. Really, any manufacturer could have made Roll's and Mini work, if they had the engineering to support the brands. BMW does have exceptionally good engineering.

@Big Al- Neither BMW nor Toyota will ever be acquired by any other manufacturer, IMO, barring a most exceptional crisis that literally shakes the globe in a truly unforeseen way. BMW and Toyota are both symbols of nationalistic pride in their respect countries of origin, and even though BMW isn't nearly as large as Toyota, is has de facto backing for whatever it will ever need from the German government. I can see the sharing of motors, hybrid systems or other things, but these two will never merge, nor will Toyota ever be able to acquire BMW, assuming it even would want to.

Hey everybody! I don't like Ford. For real! I'm not even lying! Lerp derp!