Adoption is a lengthy process. Prospective parents must submit to all kinds of scrutiny to prove themselves suitable child care providers. And for good reason. You can’t give ‘em back, as they say. Not so in the business world. Ford has officially put siblings Jaguar and Land Rover up for sale, with some sources placing Volvo’s custody in question. The move ends nearly a year of speculation, or nearly two decades of speculation, depending on how prophetic you’ve been.

A great many car people groaned when Ford grabbed the cat’s tail back in ‘89. Presciently enough, they worried that the American automaker wouldn’t “understand” and “respect” the Jaguar brand. Ten years later, they groaned again when Ford purchased Britain’s provider of “Chelsea Tractors” (Land Rover). BMW, OK, maybe. But Ford?

Analysts considered both purchases losers. Even if the brands could be brought up to snuff, they’d cost too much money to repair. When Volvo and Aston Martin joined the Premium Automotive Group (PAG), critics were more optimistic about those marques’ chances. In the end, both armchair analysts and the professional soothsayers were proved correct.

Last year, Ford lost $12.7b. The Blue Oval doesn’t break out PAG’s numbers, but insiders suggest the European brands lost $2.32b of that total. Volvo broke even last year and Land Rover climbed into the black. Aston Martin has moved on, leaving the cat holding the bag.

Despite protestations of corporate loyalty, Alan Mulally’s mob instructed Goldman Sachs and Morgan Stanley to launch “Project Swift” (a perfect codename for anyone wondering about Ford’s desperation level). The money men are set to handle the sale of Jaguar and Land Rover– though that may not be the best word to describe the divestiture. 

Land Rover is on track to sell about 195k vehicles this year, bringing in about $9b. After looking at the costs of doing business, Merrill Lynch and Co. told the Wall Street Journal they think the outfit is worth about $2.7b. Ford paid $3b for Landy ten years ago. Factor in inflation and, well, that’s sad. But it’s better than Jaguar's progress (or lack thereof).

Ford bought Jaguar for $2.6b (approximately $4b in today’s dollars). In the last three years, they’ve lost an addition $2.9b. Ford’s in the hole $600m so far this year. That puts Jaguar’s value in the negative numbers. While that’s not unusual in the car business– DaimlerChrysler had to dangle a plenty juicy deal to get Cerberus to bite-– it’s not good either.

Citigroup analysts reckon Jaguar and Land Rover could fetch $8b. As the marques share parts and production facilities, splitting them up could drastically reduce that number. Others don’t put the number that high in the first place.

This is where Volvo comes in. Although Ford has stated the Swedish brand is staying, when inside sources are questioned they tend to whistle and look the other way. Volvo is considered viable. To ensure all three PAG brands find a good home, Ford may have to throw in its Swedish contingent.

And where might that home be? Speculation is, at the moment, a lot less than rampant.

The aforementioned DaimlerChrysler is not in a buying mood, as they are in the process of selling their suffix. General Motors has been brand hungry since formation, but they’re a little shy this week (year, decade). Toyota traditionally favors natural conception. Renault said it isn't interested, as their cash flow has diminished as of late. Fiat has voiced some interest in future acquisitions, but like The General, their reach presently exceeds their grasp.

As recently as January, BMW AG publicly expressed desire to purchase Volvo. The deal never ripened. Considering the complications-– like the weirdness of BMW taking control of Land Rover seven years after selling it to Ford-– further discussions seem implausible. That said, many in Munich feel the BMW brand is stretched to its limits. Adding another brand, as the company did with MINI, may be the best way to grow the biz.

Ford sold Aston Martin to a consortium of investors including Prodrive’s David Richards and a pair of Kuwaiti companies. This financial formula portends the most likely scenario: Land Rover and Jaguar’s buyers will come from outside the current automotive arena.

Jon Moulton, of the private equity firm Alchemy Partners in London, told Businessweek he was interested in Jaguar and Land Rover “on an emotional level.” (He also thought the price would probably be too high.) Though neither company has made much or any money for the owners in the last 20 years or more, he insists the brands are “alluring.”

Private equity firms like Alchemy and Cerberus are not considered solid stewards for wayward automakers. They shun scrutiny, avoiding the kind of open communications one looks for in a happy family. They can, however, put food on the table. That’s about as good as it’s gonna get.

Last year, the Ford Motor Co. lost $12.7b. The company is carrying $188b in debt. Its bonds are non-investment grade. It’s got to the point where less than one in ten American analysts recommends the former blue chip stock. In fact, by any measure of financial health, Ford is knocking on death’s door. So why did Alan R. Mulally leave Boeing to heal The Blue Oval– aside from the $45m plus transferred into his bank account? Mulally is an engineer, a man who can’t resist taking something apart and trying to put it back together better. Or, if you prefer, Humpty Dumpty.

Mulally is looking at a lot of broken eggs. Ford’s dealer network is obese, its product line lags, UAW negotiations loom, healthcare costs outpace kudzu and the corporate culture is a capitalistic tribute to the Kremlin. But to an engineer, all things are simple. To solve even the most complex problem, just break things down into their smaller components, then repair, reengineer and reassemble. Simply put, simplify! 

That is, after all, how Ford made its bones. Crazy Henry designed simple cars that were easy to operate and maintain. He built them on simple assembly lines, with simple jobs that were easy to master.

Mulally understands how things work (or don't, as the case maybe.) Upon installation, he called for a company-wide audit to find ways to cut costs and complexity. Those auditors are just now sending in their reports.

They’re discovering (surprise!) that Ford wastes an obscene amount of money on unnecessary duplication. For example, The Blue Oval builds its products on no less than 30 engineering platforms. In contrast, Honda has six platforms and Audi has four. Sure, these companies don’t manufacture a vast variety of cars. But they make money and Ford doesn’t.  But wait! There’s [lots] more! No two of the vehicles Ford builds upon these 30 platforms share seat rails, springs, hood hinges and God knows what else.

Last January, Ford announced Sync, a voice-command system for phones and MP3 players. The company will start rolling out the new (soon-to-be-obsolete but that’s another story) technology in the fall– but not on Volvos or Land Rovers. The system is incompatible with Volvo and Land Rover’s existing electronics– even though the Swedish and British marques haven’t really been “foreign” for over a decade. 

Analysts call it Balkanization. Ford has four disparate operating units around the world, each with its own costly management team, research and development staff and production facilities. This wouldn’t be a problem if they shared, which they don’t.

No wonder Mulally recently read his execs the Riot Act: "There's no global company I know of that can succeed with the level of complexity we have at Ford." 

Mulally knows that streamlining production and development is like finding money. Audi was formed on this principle; the Volkswagen Group hangs onto the principle like grim death. By the time this century hits its early teens, Audi’s new modular MLP platform will be the one ring to rule them all. 

Lotus is vending their version of a universal platform: Versatile Vehicle Architecture. While not known for mass-production, Lotus is very adept at selling its services, and they’ve had a fair amount of interest in the technology. And why not? Automotive research and development costs are not receding. It costs about $1b to create a new platform, why not do it once or twice, instead of 30 times?

But even as Mulally the engineer strives to simplify Ford’s design, engineering and production process, once again aiming to replicate Toyota’s methodology (as he did at Boeing), Ford’s entrenched bureaucracy is hard at work, striving to keep things comfortably labyrinthine.

"The managers take refuge in the structure when things get tough,” Allan Gilmour, Ford’s now-retired Chief Financial Officer and Vice Chairman told BusinessWeek. “Rather than innovate or try new ideas that seemed risky."   As the popular management expression says, “Culture eats strategy for lunch.” One wonders if the engineer in charge of Ford gets it. Perhaps so. Mulally has pow-wowed with Gilmour twice since taking the reins. And Mulally ain’t no dope. 

Last September, Mulally’s underlings told him the Focus loses Ford roughly $3k per sale. "Why haven't you figured out a way to make a profit?" he asked (demanded?). The suits explained that Ford needs to sell lots of Foci to maintain its corporate average fuel economy (CAFE) ratings, AND that the car is made in a high-cost UAW factory. "That's not what I asked," he replied.  

There's an old engineer’s adage: you can have something good, on time or under budget. Pick two. Mulally's about to test the theory’s inverse. When you're out of money and, as your competitors jack-up their existing efficiency, out of time, can you still create something good? The answer is painfully simple.

At Thursday's annual Glass House Gang get-together, eight of ten shareholder proposals got the axe. The kyboshed suggestions include a mandate to disclose the identities of all execs collecting upwards of $500k, another giving 10 percent stakeholders the ability to call stockholder meetings, and a directive asking for a strategic plan for Ford’s future health care liabilities. The Ford family also fell under attack via a motion to remove their Class B stock “super- vetoing voting” powers.  It isn’t the first time that the Ford family’s control has come under shareholder scrutiny, but that plebiscite perished too, albeit by a smaller margin than ever before.

The proposal to terminate the Ford family supervoting shares– by recapitalizing all outstanding stock to one vote per share– won 27.4 percent of the vote (up from 22.9 percent in 2006). While The Mutiny on the Where's the Bounty? failed, clearly, the crew's not fully on board with the Board.  

The biggest backers of the Class B breakup: the California Public Employees’ Retirement System (CPERS).  With $79.6m invested, the institutional plutocrat carries some weight. CPERS spokesman Brad Pacheco told The Detroit News (DTN) that the Ford family’s veto power rendered shareholder meetings “undemocratic.” Pacheco figures reform would inflate shareholder value. The common stock holders aren’t the only voting members thinking this way.

If Pacheco is anxious to generate a little extra cash for his employers, imagine Ford family members’ anxiety. “The family” has watched the value of their collective interest in the all-American automaker descend from $2.25b to $578m in the last seven years. AND they won’t see a dividend payment until 2013 or until Ford pays off its $23.5b loan. Think about it: Ford paid out $130m in dividends in ’99. YOU try living like a multi-millionaire on a couple a mil or less a year.

It’s no wonder that “the Family” got together three weeks ago to listen to two of Wall Street’s hottest M&A (Mergers and Acquisitions) wiz kids: Joseph Perella and Peter Weinberg of Perella Weinberg Partners. The dynastic dealing duo discussed the Family’s megalomaniacal role as shareholders, and whether or not they should consider “losing” some of that control.

Sources close to the meeting (but not the caterers) suggest that Billy Boy’s big sis, Sheila Hamp, and family adviser Bruce Blythe, are hoping for some kind of RJR Nabisco-sized M&A to bolster the Class B’s value and render some respectable remuneration. Meanwhile, FoMoCo Chairman Billy Ford’s stock amongst the cash-flow deprived family continues to sink. 

Camp Hamp’s concerns were echoed by common stock holders at Thursday’s shareholder meeting. In the opening minutes, Billy Jr. was called a “failure and a loser” by a Ford retiree. Whether or not he’s the biggest loser, Billy Boy has the continued support of his cousin (Edsel B. Ford II) and father (William Clay Ford Sr.). Apparently, Elena Ford is ready to scoop up any familial stock sell offs, in an effort to keep it all in the family.

Given the current state of affairs, the family should put those M&A guys on speed dial. Fueled by Ford Sales Analyst George Pipas’ monthly recital of “this was a challenging month” and “it fell short of our expectations,” analysts are still advising their clients to sell Ford stock. They still suspect that the Ford turnaround will be nothing more than a cash intensive whirling dervish that will eventually leave The Blue Oval broken, busted and bankrupt.

April’s perfect storm– a housing funk, lethargic consumer spending and escalating summer gas prices– did nothing to lift the gloom. Even monolith ToMoCo took a hit, posting the smallest month-adjusted gains since August 2004. Back in Motown, Ford faired the worst. The family is facing yet another month where double digit decreases (-17 percent) in retail sales are plaguing their highly leveraged company.

On Friday, Standard and Poor’s (S&P) analysts told UK investors there was little possibility that they’d upgrade Ford’s investment rating– currently five notches below investment grade– anytime soon. Analyst Robert Schulz predicted that a general U.S. economic downturn of just 10 percent could create “severe complications” for the automaker, leading to default.   

In his first appearance in front of the shareholders, CEO Alan Mulally calmly faced the music. With Billy Boy at his side, Big Al attempted to pour oil on troubled waters with a combination of piercing glimpses into the obvious and vague promises. “We are not where we need to be, but we are making very good progress”.

The 79 Ford shareholders gathered at the Hotel du Pont will be forgiven their skepticism. If dropping another thirteen points worth of sales, relying on incentives and being on the Corporate Library’s “pay for failure list” is progress, where do you think Ford is headed?  Ford Family members are starting to figure it out.

In 1997, Kiwi film director Lee Tamahori brought playwright David Mamet’s words to the silver screen in an Alec Baldwin/Anthony Hopkins vehicle called The Edge. Ten years later and David Mamet lensed an ad campaign for a crossover utility vehicle by the same name. Mamet’s trademark dialogue takes center stage, pitting the Blue Oval’s most important cute-ute against the upscale competition from Germany (BMW X5) for speed and Japan (Lexus RX350) for quietness. Does Mamet’s champion edge out its pricier rivals? Duh.

As the first ad’s fast-talking protagonists suggest, the Ford Edge is .2 seconds faster to 60mph than a BMW X5. And, as the same wisecracking thirty-somethings conclude in the second ad, internal Ford testing proved that the Edge’s interior is tighter lipped than the Lexus RX350.

True story? Not quite. In an echo of the Ford Fusion ads, where Car and Driver “helped” FoMoCo compare an all wheel-drive Fusion against a front wheel-drive Camry and Accord, The Glass House Gang has stacked the deck in their favor.

Mamet’s [not gay] guys could make their claim because the Ford vs. BMW drag race pitted the Edge SEL AWD– the optional four wheel-drive version– against BMW’s entry level all-wheel-drive 3.0si X5. In fact, the Edge AWD’s .2 second margin of victory is actually something of a coup for Germany; the least powerful X5 has 900 lbs. more SUV to lug and 25 ft.-lbs. less grunt with which to do it. 

As for quietness, listen closely. The ad’s characters say that the Edge is more silent than the Lexus in “a quiet test.” That’s “a” as in one test. While the Ford product has a lower decibel count at highway cruising speeds, the same can not be said about its NVH (Noise, Vibration and Harshness) during acceleration or stop starting around town.

To paraphrase the original P.T. cruiser, you can fool some of the people all of the time but not Art Spinella. The president of CNW Marketing Research argues that the ads will be extremely effective at getting consumers’ attention, but not generating sales. “Nobody goes out and buys a Ford thinking they’re getting a BMW”. Nor should they; which raises another problem.

Anybody remember Lincoln? Hello? Lincoln is supposed to be Dearborn’s Bimmer beater, not the blue-collared Blue Oval. Lincoln’s website lists both the Lexus RX and BMW X5 as the MKX’ direct competitors. Unfortunately, Lincoln’s badge engineered Edge adds extra luxury, a.k.a. weight. Bottom line: the X5 3.0is hits sixty from rest 0.3 seconds faster than the Lincoln. 

According to Barry Engle, GM of Ford Division marketing, they compared the Edge to the X5 because buyers typically trade in bigger buck whips for Ford’s CUV. That’s an encouraging sign for Ford, but disheartening for FoMoCo. Mamet’s marketing mavens seem the have forgotten basic economics. When the corporate mothership is struggling to keep its head above water, the higher profit, lower volume brand is a more appropriate flotation device.

Truth be told, FoMoCo needs to start banking bucks, fast. Yesterday’s first quarter results indicate that Mulally’s minions are getting closer to meeting their metrics, but they’re so far not out of the woods that they’re still deep in them.  

Through March ‘07, the Blue Oval’s bean counters pocketed some $400m in NorAm cost savings– and still posted losses of $614m. Optimistic analysts will cite Ford’s reductions in staff, improved revenues and the successful jettison of PAG pieces (namely Aston Martin) and ACH (Automotive Components Holdings).

Realists will notice North American operations scuttled $172m more than last year and that revenues are already down $1.6b (from $19.8b to $18.2b). And there’s still a multitude of moribund metal littering over 4000 U.S. Ford dealer lots.

The Fusion/Milan/MKZ triplets and cute-ute crossover twins continue to be hot items, but the rest of the metal is actually repelling costumers. Ford can now lay claim to having the oldest fleet in the biz. The Powers at J.D. report that only four percent of Ford owners traded in their old whips for something new from Dearborn. Translation: Ford is still losing almost half of their already shrunken client base. The world’s new number one automaker– and many others– are stealing Ford’s customers. 

Industry analysts predict Ford’s April’s sales to sink again from last year. They expect the Big 2.5 to be hit hardest.  Continued construction slowdowns are eroding truck sales quicker than California’s sedimentary cliffs.

In the first three months of his employment, Ford CEO Alan Mulally earned himself a cool $28.2m. So how’s the high flying ex-Boeing exec doing in his campaign to save the embattled automaker? According to Big Al, “it’s going pretty well." He’s “reduced complexity” (i.e. paid bureaucrats to leave), sent Aston packing, unloaded the first of thirteen surplus-to-requirements Visteon plants and started to make good on cost savings targets. On the income side of the ledger? Not so hot.

Earlier this week, Ford flackmeister George Pipas proudly proclaimed that FoMoCo market share is now, finally, Thank God, stable. His underlings trumpeted “record sales” of The Blue Oval’s mid-size Mexican troika and Canadian crossovers. The Fusion had its strongest month ever; 15,790 units made a run for the border. The Edge is selling at a level deemed “comparable to long-established crossover products,” boasting 37 percent increases in the U.S. and doubling in Canada. 

The company now hopes (against hope) that the badge transmogrified Taurus and hot-off-the-press Flex will generate interest in all things “Dave” and jump start the automaker’s entirely theoretical nascent sales recovery. Never mind product overlap. (Ford will have three identically-sized crossovers— Edge, Taurus X and Flex—with identical powertrains.) Feel the buzz.

Meanwhile, it’s flat tires at all four corners. The Glass House Gang has just completed its fifth consecutive month of dismal sales and declining market share. 

Given the housing slowdown and sub prime debacle (Big Al: “It’s a concern”), the pinch is being felt damn near industry wide. Ford is faring worst of all. A quick glance at the less shiny numbers indicates that FoMoCo is on pace to move just over 2.5m units this year, roughly 400k less than last year. Nine percent fewer FoMoCo products hit the street in March ’07 than in March ’06. Rounding out the first quarter, 13 percent fewer people have bought a Ford, lately.

The usual sales stalwarts, the Mustang and Explorer, are facing declines of 17 and 26 percent respectively. Most disturbing, Ford’s cash cow has come a cropper. The F-Series pickup has been knocked from its perch as America’s best selling pickup, into the dirt. Year-on-year March sales are down 15.1 percent to 71,481 units. And consider this: the numbers represent the F-Series’ best sales month since August 2006.

Ford’s new ads stress the F-150’s competitive strengths, but it’s not just a matter of keeping traditional Ford customers from opting for Chevy, Dodge and Toyota pickups. It’s a question of getting people to come on down.

CNW Marketing Research reports that automotive showrooms are emptier than Paris Hilton’s panty drawer. Other than Toyota, every major automaker’s dealers are seeing less foot traffic than the year– or month– previous. Ford suffered the most from the footfall freefall. Showroom floor traffic sank 18 percent in January, and then slid roughly 28 percent in February and March. Even a 450 horse F150 sold by the CEO himself won’t cure those kind of numbers.

The Detroit News reports that The Big Boss is pressuring Mark “Movie Star” Fields (El Presidente del Americas) and Cisco Codina (group think vice president for NorAm Marketing, Sales and Service) to initiate a “full court press” to win back the masses. Failure is not an option. There’s been talk of kicking Mark Fields off the corporate jet (saving the company some $5.75m in executive over-compensation) and replacing Cisco Codina with customer service president Daryl Hazel.

Ask the Ford family scions who’ve seen half a billion dollars wiped off their stock value and their dividends disappear. All this corporate turbulence sucks. But it’s nothing compared to the UAW-shaped storm cell that lies dead ahead. 

If Mulally can wrest significant concessions from the United Auto Workers this summer, he'll be worth every penny of his $30m salary. The problem is his $30m salary. Quite how Big Al expects the rank and file to take a hit for the team when he’s banking tens of millions of dollars, while his family enjoys free corporate jet travel, is an interesting question. Perhaps not as interesting as “Why can’t the workers have some of those billions you borrowed?” but close.

Yesterday, Mulally warmed-up for the Ford – UAW Detroit Death Match by announcing that The Blue Oval Boys don’t have specific targets for wage and benefit concessions. Nope. They’ve got a non-negotiable "economic envelope for competitiveness."   If you could read the back of that envelope it would probably say “we can't pay you now so we'd like to pay you later.”

In truth, Big Al doesn’t have a hope in Hell of convincing Big Ron’s team to offer anything other than window dressing. Without increased sales or decreased labor expenses, Big Al will fail. He may even get fired— provided Ford can afford Mr. Mulally’s $27.5m severance package.

"We are absolutely going to do what it takes to keep our product fresh and keep it relevant in the market.” Now THAT’S what I’m talking about! A Ford exec making a public commitment to ongoing excellence. No more cut and run. No more vehicles dying on the vine or losing out to some new “flavor of the month.” Oh wait. Ford's truck marketing manager wasn’t talking about keeping it real for the core models. Ben Poore was celebrating the company’s decision to offer a Chip Foose edition F-150. Oh dear.

I’m all for “mass customization.” The MINI and Scion brands nailed it: encourage buyers to give a nice car enough individuality to make it their own– without destroying resale value. But these are niche brands. While the same principle may someday apply to mass market automobiles, most of today’s buyers still frequent dealers with hundreds of roughly similar vehicles waiting for a new home.

And that means that Ford’s big push for “limited editions,” its newfound faith in so-called “microsegmentation,” is yet more evidence that Ford’s fundamentals are broken. The Chip Foose Edition F-150 (450-horsepower 5.8-liter V-8 and Overhaulin’ stylin’), the Shelby GT-500KR (yet more horses for an overpowered death car) and the Funkmaster Expedition (Why not the Funkmaster Flex Flex?). All of these vehicles will do precisely nothing for the sales of the brand’s core products.

I know. They’re fun! They’re exciting! They create “the kind of buzz in the marketplace that keeps companies healthy." Anyway, that’s Ben Poore’s theory. And a plenty popular one it is too; at least amongst the people who really love muscle modded mainstream motors. As far as hard-nosed beancounters are concerned, it’s a less well established principle.

In 2000, Ford flogged some 200K Mustangs. The next year, they offered the 265hp 4.6-liter Bullitt edition. One year and 5582 Bullitts later, ‘Stang sales sank to 155K. In ’03, FoMoCo launched the 305hp 4.6-liter Mach 1. The company sold 9600 of those bad boys. The next year, Mach 1 sales slipped towards subsonic, dropping to 7100 units. Overall ‘Stang sales slid to around 140k units. In short, the hard core variants either cannibalized Mustang sales or did sweet FA to stop the rot. 

Ah, but what of the so-called halo effect? Like many testosterone-crazed auto execs, Poore was implying that way cool Mustangs, F-150’s and Flexible Flyers will create warm fuzzies for the models’ more pedestrian stable mates, or the Ford brand in general, or something. It’s strange to see this trickle down branding concept re-emerge from the Glass House Gang– given that the automaker recently deep-sixed their entire SVT tuning division and pulled the plug on the world class Ford GT supercar.

And fair enough. As we’ve argued before, halo cars are a waste of time and energy that reveal company-killing ADD (Studebaker Avanti anyone?). Sure, Ford’s fire-breathing mutants make US happy. But we’re pistonheads. We love the extreme, the amazing and the unique (ish). Let’s face it: the vast majority of the American car buying public couldn’t care less about a 450-horse pickup truck, or any other wild-ass vehicle. They want vanilla. Plain, old, vanilla.

So never mind all the marketing gobbledygook about intangibles like a special model’s effect on “brand positioning.” At the sharp end, special editions are nothing more than a way to earn the dealer a little extra cash, or provide dealer drive-by props, or give the sales manager a cool car to drive instead of the plain Jane sedan he beats to an inch of its life. Again, you gotta wonder, why bother?

Never underestimate the impact of corporate culture on a company’s priorities. Toyota is on a mass market mission. Does ToMoCo have a halo car? No. Ford is… confused. Their culture is no longer about doing the hard work needed to endlessly improve and promote core vehicles like the Crown Victoria, Escape, Explorer or Freestyle. It’s all about finding a Hail Mary pass that suddenly saves the company from ruin.

High-priced limited edition vehicles are not going to save Ford. They’re not even going to help them. Truth be told, this showboat-load of special edition models only exist because they give Ford’s dispirited marketing and PR folk something “interesting” to do. What’s the bet Ford will provide DOZENS of high quality press pictures of the Shelby ‘Stang— while they remain oblivious to the fact they can’t provide one decent shot of the Focus. Or, for that matter, a decent Focus. Or, quite simply, maintain focus.

Again, don’t get me wrong. I celebrate automotive diversity in all its forms. But someone’s got to remind Ford that their brand isn’t about diversity, or horsepower, or Funkmaster Flex’ fanatical followers, or anything else that smacks of spizzarkle. Ford is about value for money. Period. 

Back in ’98, the BBC aired a fly-on-the-wall documentary series called “Back to the Floor.” A camera crew followed five British bosses who left the relative safety of the executive suite for a week's labor with downtrodden workers at the sharp end. When the show migrated to America’s PBS, it lacked the undercurrent of class warfare that gave Auntie Beeb’s original its zing. When Ford CEO Alan Mulally recently revived this scenario by playing car salesman, the results were equally dire.

Of course, Alan didn’t sell cars for a week. He “worked” for an afternoon at Village Ford in Dearborn, Michigan and Galpin Ford in L.A. Hanging with the Village people, Ford’s top dog supposedly set a blistering sales pace: four cars in forty minutes. Wow! Assuming Ford needs to sell 5.3m cars for a turnaround, Mulally should train 375 salesmen to repeat his voodoo. Working ten hour days, six days a week, they’d return Ford to ’05 sales levels by the end of the fiscal year.

Anyway, Nancy Miner was one of Big Al’s scalps. After a bad dealership service experience in New York (which Big Al didn’t investigate), Ms. Miner decided to go car shopping in Ford's home patch. That said, the main reason behind her journey was a visit with her son Kevin, a longtime Ford employee. Now don’t get to thinking Ms. Miner was a Ford family ringer, carefully prepped for purchase. At least, not according to the debrief provided by the divine Mr. M.

"She was down pretty much to a Camry and the Fusion,” Al said, displaying a car salesman’s knack for data capture. ”So I told her all about the Camry because I've had every Camry, I've had Lexus cars, I know all about Japan. I told her about the [Fusion], asked what her needs were. The Fusion was really for her."

It's a shame Ms. Miner didn’t ask Ford’s CEO why he chose Toyotas and Lexi over Fords and Lincolns for all those years, and whether this sudden change in brand loyalty had anything to do with his FoMoCo-sponsored $35m compensation package (plus unlimited G5 air miles). As opposed to, say, a recent, radical shift in Ford's comparative product quality.

Ms. Miner might also have enquired if Mulally’s all-encompassing knowledge of Japan includes insight into that country's automakers' ability to generate millions of sedan sales without relying on rental, taxi, livery and/or law enforcement fleets. While we're at it, readers with sales experience might like to know why “call me Alan” switched the qualify (ask about the customer’s needs) and present (tell her about the car) parts of the official Ford sales process. Never mind. I guess Mulally is more of a closer. 

Big Al put this proposition to the test at Galpin Ford. Needless to say, the L.A. Ford franchise isn’t one of those Midwestern stores where the tumbleweeds blow across the sales floor and the dealer principal can’t afford to even think about divorcing his second wife. Galpin is, in fact, the world's top-selling Ford dealership. Suffice it to say: fish, barrel, Ford, Mulally.

Once again, “Call me Alan” sold four vehicles. Once gain, little was left to chance. Longtime customer Danny Harrington— 15 vehicles and counting– was teed-up. The general contractor was “warned” in advance that FoMoCo’s top dog would be on site, and took full advantage of the opportunity.

Herrington sat in the room where small pens sign big checks with Ford’s CEO and Galpin Sales GM Terry Miller. The Associated Press reports that Herrington wanted more money for his 2000 F-250. M&M did some pencil pushing and reduced the builder's payment to his target of $600 per month– for six years. Oh, and Big Al clinched the deal by throwing in a set of floor mats (I kid you not).

"There were a couple of things that were in question as to be part of the deal," Herrington said post facto. "I think because of him [Mulally] it went my way."

While the word “think” doesn’t indicate that everything went Herrington’s way, there’s a more important question: what did Alan Mulally learn from this exercise?

Call Me Al didn’t face any of the drudgery association with car sales: waiting hours for “ups,” filling out reams of tedious paperwork, making sales calls to old customers, etc. Nor was he subject to any of the psychological pressures facing salesmen and women: depending on a sale to make ends meet, facing down the GM, competing for bonuses, etc. Nor did he get a taste for a “real” customer interaction; all the prospects knew Big Al was Ford’s CEO. In short, The Blue Oval's Big Boss learned more about PR than people.

In the “Back to the Floor” doc series, the egghead CEO always gained an appreciation for his street smart employees’ difficulties— many of which were the direct result of company policies. The basic idea: something will change. In contrast, Mulally’s flying visit to the front line was a cynical move that changed nothing and fooled no one– except maybe Mulally himself.

February’s sales figures are in. Ford continues to sing the blues. While FoMoCo’s spinmeisters invite us to savor the consistency of their domestic market share and clock their lessening fleet business, The Blue Oval’s retail sales are still slumping. The situation hovers somewhere between serious and six feet under. What’s worse, the domestic automaker’s execs seem bound and determined to shoot themselves in the feet, repeatedly. First, the numbers…

Ford has maintained a 13% U.S. market share average since June 2006. Meanwhile, Dearborn’s dealers moved just over 211k vehicles in the previous four weeks. That’s some 33k less than a year ago. While Ford’s PR flacks blame this [steady] decline on lower fleet sales, the sector accounts for less than half of February’s foibles.

Checking the dealer lots, some 603k FoMoCo vehicular orphans are still left looking for homes. Clearly, The Blue Oval Boyz need motor-city March madness to start now. Unfortunately, even if March sales come in and go out like a lion, Ford’s revenues will still be quiet as a lamb. 

As the crossover twins (Edge, MKX) and Mexican troika (Fusion, Milan, MKZ) continue to lead the way Fordward, the gravy-train known as F-Series is spinning its wheels. F-Series sales are down twelve percentage points. Worse still, production of Ford’s most profitable of profitables, the diesel-powered F-Series Super Duty pickup, hit a bump in the road due to “supplier issues.” 

Back in January, Mulally’s legal beagles filed a lawsuit against Navistar International Corp. for warranty claims. The engine maker threatened to cut supplies quicker than locks at the Spears’ household. The threat was realized Monday, when Navistar halted production of Dearborn’s 6.4-liter diesel, claiming short payments by the Glass House Gang. 

Despite a court order putting those oil-burners back on the front burner (and forcing Ford to pay up), Navistar won’t be bothering their logistics teams any time soon. Getting the glow plugs glowing again will take time. When the lines were halted, Navistar cut back their blue collar workforce and kyboshed some parts orders needed to pound out the PowerStrokes.  Even with a backlogged supply at the ready, when Louisville fires back up next week Navistar, Ford and their dealers will all be playing catch-up. 

Truth be told, the Super Duty was already late to the party; Ford was scrambling to fill the near 37k diesel-equipped dealer orders when the production lines fell silent. Peter Nesvold of Bear, Stearns & Co. prices a one month lag at $1b in lost revenues. Even if Louisville gets back on track today, sidestepping this supplier drama won’t be enough to dodge some bigger bullets.

The credit raters at Fitch Inc. report that Ford’s former health care woes are back, and they’re bad. The 2005 union health care “concessions” have been outrun by rising costs. Ford’s health care tab now accounts for $490 to $705 per vehicle produced. While that amount will slide slightly next year, Fitch says costs will recommence their rapid escalation in ’09– and beyond!

No question: health care costs will take center stage at this year’s UAW contract talks. Ford (and the other 1.5) will “ask” the United Auto Workers (UAW) to follow the United Steelworkers example and pick up the tab on their retiree health care costs. Ford’s reportedly looking for a 25% reduction in their employees’ medical costs. Also no question: the UAW will tell Ford to go sing.

The Wall Street Journal reports that the UAW has begun accepting changes to its restrictive working practices. But any chance of pay conciliation pretty much disappeared when Ford’s Board of Directors suddenly decided that their $35m CEO and his minions deserved a raise. An SEC filing revealed that they’re bumping up Alan Mulally’s stock options by a cool million.

In a stunning move (considering the brouhaha surrounding Prez Del America’s Mark Field’s weekend Florida commute via company jet), the Board bestowed Big Al with a second set of keys for the corporate plane, so his family and guests can jet set without him. 

But wait, there’s more! FoMoCo’s BOD also decided Mulally isn’t the only executive who deserves a little something extra in their pay packet. Mulally’s “one nation under a groove” approach means top ranking team members can now collect up to eight times their annual salary in compensatory bonuses. To balance out the old program, envelopes stuffed with undisclosed amount of cash were delivered to joyful execs.

Speaking of spondoolies, let’s finish this sucker with a quick update on the total tally for Mulally’s turnaround (you know, should the company’s planned return to black stay on track). I make it $11.18b. That’s up $2b since the last time we looked.

As thousands of Ford’s white collar workers collect their payouts and leave their “Knowledge Retention Toolkits” behind, as the UAW [rightly] sneers at Ford executives’ greed, the line between tragedy and farce is growing thinner. The final chapter in this sad saga is on its way.

Sin City’s casinos are designed to create the illusion of chance. Vegas’ neon lights, chiming bells and piped-in oxygen keep hopefuls dazed, confused and distracted while their dollars are vacuumed from their wallets. And yet all the neon in Nevada couldn’t distract the Ford floggers at the recent National Automobile Dealers Association (NADA) convention. The Blue Oval’s metal movers and shakers hit town looking for one thing: assurances that FoMoCo’s new, new turnaround will work. They got nada.

That said, Big Al Mulally’s first tète-a-tète with his dealers garnered mixed reviews. Although Al won kudos for his straight talking style— promising to dial back Ford’s dealer dissing corporate culture and a pledge to play car salesman for a day— his audience was far from convinced. The mood remains… tense.

“This is it for them,” Wisconsin dealer Steve Marshall pronounced. “Their last shot.” Ford's NADA members are well aware that their immediate future depends on FoMoCo’s ability to implement their new, new Way Fordward. They’re skittish, and no wonder: the dealers are looking at Ford’s “new” models for ’08 and thinking pigs and lipstick shades.

This year, Ford’s offering a refreshed Five Hundred, Montego (which is, let's face it, a refreshed Five Hundred) and Freestyle. The models are scheduled to receive a new three bar grill nose, a larger 3.5-liter six cylinder engine, more safety kit and an as-yet-unspecified interior upgrade. Given the troika's modest sales, the rejigged pigs might not fly.

Last year, Ford sold 165,152 Five Hundreds, Freestyles and Montegos, down 22 percent from 2005. The $23,785 Five Hundred SEL and $26,670 Freestyle SEL currently have $2k customer cash on the hood, while the $24,585 Montego comes with a choice of $2k or 0% financing. They may not be lame ducks, but neither are they what you’d call high flyers.

As of January first, Ford/Mercury dealers harbored an 89-day supply of Five Hundreds, a 115-day supply of Freestyles and a 105-day supply of Montegos. Getting rid of these “old” models is Job 1, and it ain’t gonna be easy, or particularly profitable, for anyone concerned. Sensibly enough Mulally waited for NADA members to return to their car-choked car lots to unveil his biggest product news: the Taurus lives! And the Sable! Well, at least in name.

Mulally hinted as much at the start of his tenure; dissing the ancien regime for killing off storied monikers in favor of a farrago of “F” names and alphanumerics. In an announcement at the windy city auto show, Mulally formally resurrected Ford’s last chart topping automobile. The Five Hundred now becomes the Taurus, the Freestyle becomes the Taurus X and the Montego becomes the Sable.

As you read this, auto writers around the world are trotting-out the old “rose by any other name” shtick. The more charitable amongst them are already claiming that Ford’s retro-moniker machinations represent some kind of “back to basics” movement by Ford’s Glass House Gang. Writing in the Detroit Free Press, Mark Phelan says “Reviving the Taurus name is a small correction, but it shows Ford customers, dealers and employees that the captain is awake at the wheel.”

Or not. In a profound sense, the name changes are the most cynical examples of badge engineering yet inflicted on Ford’s dwindling (if gullible) customer base. What’s old is new, and new for you! Even if they’re not true, rumors that Ford may retrofit unsold Five Hundreds, Montegos and Freestyles with three-bar body kits and new badges shows the creative bankruptcy behind the “re-christening.”

Indeed the Captain may be fast asleep. Last month, Big Al proclaimed that he liked “the Taurus brand; everybody has such fond feelings for it." First, the Taurus was a model, not a brand (Big Al should be forced to watch re-runs of the Taurus-era TV show Eight is Enough). Second, “everybody” doesn’t share Alan’s enthusiasm for the model– especially those who, unlike a chauffeur-driven Boeing executive with a Lexus in his private parking space, experienced the Taurus at the end of its long, sad decline, courtesy of Hertz.

Perhaps Ford should give Mrs. Mulally a randomly selected Taurus fresh off the assembly line for a year’s driving and see how that turns out. Meanwhile, Joe Phillippi, president of AutoTrends Consulting Inc. shares our skepticism. “Its laughable that they take a brand that they just killed that was so damaged and then put it on a car that’s been struggling, and assume that the face-lift will work some sales magic.” 

So the model that saved Ford and inspired a book that inspired an airplane guy whose success inspired a Ford scion to hire the guy to save Ford, lives. It remains to be seen if the carmaker that made the model that conquered the market that faded into mediocrity can use such blatant sleight of hand to hold on long enough to ante up to win the pot and play again. 

Once upon a time, a dapper German auto exec named Wolfgang Rietzle dreamed of running BMW. When the Bavarians gave Wolfie the cold shoulder (twice), he left their employ to build his own, even larger fiefdom: the Premier Automotive Group (PAG). Technically, Ford owned Wolfie’s farrago of upmarket car brands. But as far as Wolfie was concerned, “his” five luxury marques vould vun day rule ze vorld! Three years later, Bill Ford tried to fail Wolfie upwards. The mad professor banked his bucks and blew town, leaving a Frankensteinian monster for Ford to fix. Yesterday, Ford said it lives! I say, grab your pitchforks!

According to Ford’s Chief Financial Officer Don Leclair, the Premier Automotive Group will make a profit in ’07. Although the Jaguar brand is drowning in a sea of red ink and Land Rover is treading water, Leclair sees Volvo’s bank balance as a rising tide, lifting PAG's financial results. He predicts Volvo’s gains will cancel out Jaguar’s epic losses, and them some.

At the same time, Aston’s upcoming sale will generate $1b or so, making the whole PAG bottom line thing look mmmmighty fine. For a company that’s seen its U.S. market share melt like a popsicle in a sauna, a carmaker that’s hocked everything up to and including its own logo, a multinational enterprise that dropped $27b last year, this is extremely welcome news. OK, “informed speculation.”

If Ford gets Jaguar back on track and into the black, the automaker can serve some major humble pie to all those analysts who told them to deep six Jag (and Aston, Land Rover, Mazda and Mercury) and build a few nice Fords, for Christ’s sake. There’s only one problem: it ain’t gonna happen.

Automotive News reports that Volvo has generated about $1b a year since Ford created PAG back at the turn of the century. Unfortunately, the winning streak ended last year, in the second and third financial quarters. Automotive News attributes Volvo’s declining sales to its “aging product line;” which is only kinda true.

Yes, the S60’s ’01 roots are showing. But the XC90 was da bomb back in ’03, the S40 and S50 are box fresh (’05), and the C70 refresh is in da house. Looking ahead, the S80 and XC70 are scheduled for an ’08 update. Volvo’s stalwart V70 is up for renewal early next year. Whatever bounce Volvo gains from these models may restore their bank balance, but it won’t send it into the stratosphere.

To really stoke-up the financial furnace, Volvo’s called brand extenders (we ain’t afraid of no ghost). In the late summer, the funky chunky C30 hatchback appears. Next year, the XC90’s mini-me, the XC60, checks in. Yes, but– to iron out all the bugs, Volvo will be “soft launching” these models in Europe. In other words, even if they’re a hit, it’ll be a couple of years before they’ll make any significant contribution to Volvo’s bottom line.

Meanwhile, Jaguar is busy dying. TTAC has obtained Jag’s final worldwide numbers for ’06 (ironically enough, the American department responsible for collating the data was recently cut back). Last year, Jaguar sold 75,013 vehicles, down from the previous year’s total of 89,802. 

In many ways, Jag’s ‘06 sales mix is even more depressing. In the American market, Jag dealers sold roughly five thousand examples of each of its four models. Abroad, Jag sales tilted heavily towards the British marque’s entry level whips. The X-Type generated 27,305 sales, while the S-Type clocked-up 13,222 (as compared to 7250 XJ’s and 6540 XK’s).

On one hand, the relatively strong sales of Jag’s cheaper models may indicate that the brand’s finally gaining traction amongst younger buyers– at least overseas. On the other hand, it may not. Anyway, last year, Jag lost $750m– just over $10k per car.

Ford claims Jag’s losses will fall to $500m this year, $300m next. How? Either the company is about to cut production big style or… what? The new fish-faced XK is pretty much dead in the water. The X, XJ and S are long in the tooth; only the S is close to emerging from reconstructive surgery (Spring ’08).

What’s more, 4Car reports that Jaguar’s bosses have yet to sign-off on a new model range. And no wonder. While there’s talk of axing the XJ in favor of a crossover or resurrecting the F-type, Jaguar’s current product mix has trapped the upmarket brand in down-market Hell. Taking the X and S out of the portfolio would be catastrophic.

All of which leaves Jaguar where it’s been for the last seven years: an open wound draining Ford’s precious bodily fluids. It’s time– past time– for the pain to stop. Ford’s not-so-freshly- minted CEO Alan Mulally continues to talk about his company’s need to “face reality.” The reality is that Jaguar is a lost cause Ford can no longer afford.  

[This piece replaces an editorial based on factual inaccuracies. I apologize to Jaguar, and to those of you whose comments disappeared along with the previous piece. Please feel free to repeat your remarks below. RF]