Speaking of barnyards, someone forgot to tell Ford watchers not to count their chickens until they hatch. The MSM is ready, willing and able to pronounce the Blue Oval Boyz’ turnaround plan for the ailing American automaker as good as done, and skip the “it worked!” part of CEO Big Al Mulally’s canonization. The Detroit News is down with this fait accompli meme. “As one fund manager who controls a sizable chunk of Ford’s stock and bonds put it: ‘The biggest threat to Ford’s future is that Mulally steps off the curb tomorrow and gets hit by a bus.’ Such sentiments, blunt as they may be, are a testament to the progress Ford has made since Mulally took over as CEO in September of 2006. He predicts the company should settle into profitability by late 2011.” So that’s it, then, save “Mulally is no stranger to success” and “He’s been an agent of change” and “For many Ford employees, he has rock-star status” and I think they ought to think it out again.
Not to go all Nixonian on you, but it looks like I’ll have Big Al to kick around for a while:
Ford Motor Co. CEO Alan Mulally says he has no intention of retiring before restoring the Dearborn automaker to sustained profitability.
Mulally turns 64 next month, and Ford executives have typically retired by age 65. If he followed that policy, the chief architect of Ford’s turnaround plan would leave before reaching his long-stated goal of returning Ford to full-year profitability. But Mulally told the Detroit News he intends to stay.
“As long as I’m contributing, I’m honored to serve Ford,” he said last week. “But I’m one person on a fabulous team.”
OMG! Did he say fabulous? Has he SEEN Mark Fields’ mullet? Anyway, am I the only one who sees the irony in this bit of DetN hagiography?
Some of the credit for these accomplishments belongs to other Ford executives.
Former Chief Financial Officer Don Leclair and then-CEO Bill Ford began assembling the financing plan before Mulally was hired, and much of the cost reductions that have trimmed billions from Ford’s North American operations were the results of Fields’ “Way Forward” plan or part of an accelerated effort that he and Leclair had already drafted.
But Mulally has done something that no other Ford executive in history has been able to: taken a sledgehammer to Ford’s infamously careerist corporate culture, which too often put individual advancement ahead of the company’s long-term success.
Ford insiders are free to email me (farago@ttac.com) backing-up the contention that the Glass House Gang’s days of competing fiefdoms have gone the way of English titles. (Oh wait . . .) My contacts tell me that everyone’s saying a lot, but they’re not doing anything. Remember our post about Ford’s ridiculous number of seat track assemblies? The tempus have not fugit. Parts commonality may exist worldwide for a few key products, but it’s not happening across brands or models.
Truth be told, Ford’s turnaround is a LONG way from finished. Volvo. Lincoln. Mercury. All dead brands walking. The Ford brand is no stranger to amorphousness, with plenty of overlapping products that don’t sell in enough quantity at enough of a margin to earn enough money for Ford to become profitable.
Of course, there’s always the next big thing. But if the new C-Max, Edge, Explorer, Fiesta and Focus tank like the Flex, old Taurus and Taurus X, the company’s slide is sure to continue. Even if Ford convinces more investors to come on board, the company still has too many models and dealers and not enough brand. They’re still losing money.
The clock is ticking. As BusinessWeek’s David Kiley points out, “During its quick trip through bankruptcy court, GM shed $40 billion in debt. That’s roughly the amount Ford could have on its books in just two years.”
Ford is banking on a climbing share price and its brand momentum to bail it out. But if that doesn’t happen, Ford could have less money than its crosstown rival to spend on new vehicles and marketing in a few years. “We’re really focused on the balance sheet right now, and the liquidity we need to make it through [the recession],” says Ford CEO Alan Mulally. “We are watching closely but haven’t seen evidence yet that we are being disadvantaged.”
Disadvantaged relative to whom? Chrysler and GM? What about Honda, Toyota, Hyundai, Volkswagen et al.? Not to put too fine a point on it, TTAC’s Ford Death Watch continues.
Oh, and I repeat: $5.9 billion worth of Department of Energy retooling loans says Ford is not “the only American automaker to eschew a federal bailout.” If you think the loans were created to improve fuel efficiency, I’ve got some New GM stock I’ll sell you cheap. It’s not available yet, but hey, why wait ?
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Lincoln is the fastest growing luxury brand in America, and Flex sales are going up.
How much do you want to bet that every automaker that has assembly plants in North America will end up taking this loan? Weren’t there something like 40 applicants? Also, do you consider Nissan to be “bailed out”?
“Lincoln is the fastest growing luxury brand in America”
How do you figure?
“But Mulally has done something that no other Ford executive in history has been able to: taken a sledgehammer to Ford’s infamously careerist corporate culture, which too often put individual advancement ahead of the company’s long-term success…”
There is absolutely no way to overstate how important this single accomplishment is in Dearborn. The culture was a toxic mix of arrogance, fear, ambition, and blamestorming. It was a miracle that a single car rolled off the production line while all these individual fiefdoms of power existed. Ford employees spent over 60% of their time infighting and always had an excuse why something could not be done.
Mullaly overcoming that culture is the equivalent of Steve Jobs re-invigorating Apple. He has given the company a fighting chance in place of inevitable failure.
What the company does with the new lease on life will be interesting. The Death Watch should continue, but the kidney transplant seems to be a success so far.
There’s such a thing as getting a bigger share of a shrinking market. Laugh if you want, but during a recession that is the best you can hope for, especially if you’re a luxury brand.
Kidney transplant? More of a liver transplant. Maybe a liver and testicle transplant
But Mulally has done something that no other Ford executive in history has been able to: taken a sledgehammer to Ford’s infamously careerist corporate culture, which too often put individual advancement ahead of the company’s long-term success.
That’s odd, I thought Don Peterson did the same…only with a smaller, non-PAG choked company as a starter. Except I doubt anything really happened.
And the culture won’t change: just ask Joe Laymon. Or tell me why J Mays still runs anything at the company. And wasn’t Mark Fields’ career filled with plenty of bad moves that normally get people fired?
If GM’s problems are primarily traceable to its culture, then Mulally’s ability to fix Ford’s culture will be laudable.
And if he’s really changing Ford’s cultural problems, then product will follow.
As for the DOE loan – Ford can pay it back, unlike GM or C. They didn’t use it to keep the lights on.
But Mulally has… taken a sledgehammer to Ford’s infamously careerist corporate culture, which too often put individual advancement ahead of the company’s long-term success.
Then why is Mark Fields, a person that a former Ford employee described to me as “a real prick,” “a waste of a suit” and someone only interested in his own climb up the corporate ladder still there?
“a former Ford employee”
Perhaps that had some influence on their opinion?
Lincoln is the fastest growing luxury brand in America,
Well, if you sold four MKZephyrs in 2008 and then sold sixteen in 2009, that’s a four-fold increase.
In other words, when you’re coming from next to nothing, doubling your sales is easy.
gslippy
They didn’t use it to keep the lights on.
Yes, they do. Money NOT spent on retooling can be spent on keeping the lights on. Did you catch the story yesterday about GM factoring-in an as-yet-to-be-awarded DOE loan to its short term liquidity projections? Like that.
rnc
“a former Ford employee”
Perhaps that had some influence on their opinion?
He wasn’t fired. He lost his job when the plant he worked at closed. And he had that opinion of Fields before that happened.
RF, do you consider Nissan to be “bailed out”?
Mr Frank Williams,
You’re not the only one. Someone I used to know, works for Jaguar and many people met Mark Fields. Words to describe him ranged from “Wideboy” to “a complete cock”. I know I sound like a broken record, but I still don’t know why Mark Fields is still around. The guy has done nothing to prove his worth (and before anyone say “what about Mazda?” I’ve told by my contacts at Jaguar, that a lot of the work done to turn Mazda around was done PRIOR to Mark Fields turning up).
I hope Mr Mulally does stay at Ford for a lot longer. No-one can deny that he has done plenty of good at Ford and there is still much work he can do. But, when Mr Mulally does have to retire, who will he leave Ford to?
Mark Fields? Might as well carry on the Deathwatch.
Bennie Fowler? Possibly. He did do sterling work at the quality division.
Lewis Booth? He’d be good as he’s done good work at Ford Europe.
Maybe Jim Farley. His Toyota experience could prove invaluable to Ford.
Ford need to remember that a turnaround is only the first step in making a healthy company. The bigger step is maintaining that healthy environment for workers to flourish.
I’ll stick with Toyota and Jaguar, thanks. :O)
Right. So far this reminds me of Chrysler circa 1992. Just starting to turn around.
Yeah yeah, that didn’t end well, but I’ll tell you what–if in 2015 BMW is making noises about merging with Ford, I’ll be worried! :)
I don’t think anyone is counting unhatched chickens, but Ford has been consistently gaining retail market share in the worst auto market in modern history. When your two long time rivals have just gone C-11 and your retail share is going up, there is ample reason to be happy.
DOE and Bailouts
In the mind of normal Americans, the two are not remotely related. Ford is participating in a program setup during the Bush era to get the automakers to stop whining about CAFE changes. In the tax payer minds, government-backed bankruptcy equal bailout. Government-backed loans to retool factories to produce more effecient vehicles equal “American being competitive.” The latest Rasmussen poll shows that most Americans are pretty happy with Ford.
Ford has a coherent looking product plan and their most recent products have been blessed by the most influencial car buying organization in the country, Consumer Reports. As for the “tanking” Flex, sales have been climbing each month with 4,784 leaving the dealership in June.
If the trend continues and levels out around 5k a month, that’s 60K a year which is pretty good for an expensive CUV in a 10M SAAR environment. The 2003 Nissan Murano had a slow start too due to “unusual” styling but was ultimately a solid hit.
As for dead brands walking, a deal is in the works for Volvo. Ford is spending very little money on Mercury, so its not much of a distraction as they let it run its course. Lincoln is looking a lot like Acura these days (take a Ford, apply lipstick and nice leather, add $5k to the price, repeat), but with limited resources, Ford’s working on the core brand first (unlike GM’s big Caddy investment while Chevy was stuck selling Cobalts and Impalas).
What more can TTAC ask of Ford?
Robert, good point about funds being “fungible”. If FoMoCo can use loan money to retool, that frees up those funds for other uses.
A lot of the hubbub around Ford is just the contrast between pre-Mulally days and now. Yes, Ford still has its problems (L-M lineup weakness the biggest one. How companies let their luxury brands/most profitable cars go to crap is beyond me), but the overall image of the company has improved greatly. And where the image goes, the brand(s) follow.
Ford appears to be making improvements, in its car lineup, in its marketing, in its cost structure, and in its managment overall.
Contrast this with GM, which despite its bankruptcy/near death, still looks and acts like the gang that can’t shoot straight.
GM will survive, but I’d put my money on it being the #3 automaker in North America in about three years (behind Ford and Toyota) and to stay in that position for a long, loooong time, if not for the rest of our lives.
How did Volvo get lumped in with Mercury and Lincoln. I can imagine Volvo doing good business as a stand alone company, and they seem to bring a lot of good safety cred, and are sharing platforms with Ford.
Mercury and Lincoln on the other hand are just tarted up copies of Fords, do they bring anything to the party?
WELL, i’ll give Ford a round of applause here, since it seems they can’t do anything right in some peoples eyes. I guess if they go bankrupt too, then all the “told you so’s” will be happy with our options even slimmer for a car not owned by the government. With the economy in the tank like it is ,i think what Ford is doing is nothing short of miraculous.
Having seen Ford’s culture up close and way personal and having friends working there now, I can vouch for the miracle Mullaly has achieved. Most reports I get from inside say things are actually getting done and the infighting and bs has been greatly reduced. Why Mark Fields is still there I can not explain, as he is a tool of the first order, but Mullaly is most all he’s cracked up to be. Unfortunately, Ford still has a long way to go before they should be taken off the DW.
@RF:
Yes, they do. Money NOT spent on retooling can be spent on keeping the lights on. Did you catch the story yesterday about GM factoring-in an as-yet-to-be-awarded DOE loan to its short term liquidity projections? Like that.
Fair enough. But it seems premature to say they haven’t spent the money on retooling; is there sufficient transparency to say one way or another? Has Ford declared as boldly as GM that they would use it for other purposes?
Mr. Sparky
I would imagine that the average American doesn’t even KNOW about the DOE loans. Hell, I’d be willing to bet they don’t even know there IS a Department of Energy. To paraphrase our friends at New GM, mind the perception gap!
What the public knows and the truth are often different deals. In this case, the truth is that the DOE loans were a de facto bailout for the American auto industry, aimed at making it possible for The Big 2.8 to meet the stricter federal emissions standards without going broke. Which two of them did anyway. So far.
As I said in a previous comment, the money NOT spent on retooling could be spent on keeping them alive.
Although the DOE money sent to Detroit was dressed-up in greenery (to please the Pelosi wing of the Democratic Party) it was a bailout. Not so pure. Not so simple. But a bailout nonetheless.
Don’t forget: the “bridge loans” were cooked-up by the Bush administration after they discovered they couldn’t hurry the DOE loans or pass the sneaky little viability clause.
Now, as for Ford’s coherent-looking product plan, how many CUVs do they have now? How many will they have in a year?
Next, what is a Ford? What does the brand stand for? The Blue Oval Boyz may ask customers to Drive One, but how about they Pick One branding message and stick to it?
The Flex is a minivan designed by a committee. it never should have made it out of the concept stage. Jack says the Eco-Boost engine transforms it into a tidy little handler, but who cares? Once everyone who wants a Flex has one, that will be that.
As many commentators have pointed out, Volvo. Ford can’t live with it. It can’t live without it. Mulally swore up, down and sideways the brand wasn’t for sale when he took over. Given the money disappearing down the Volvo rathole, as the Brits would say, it’s time for them to piss or get off the pot. Past time.
The idea that Lincoln is in a holding pattern is worrying not matter how you look at it. Either Ford can’t afford to develop the brand now, or they don’t know how to. MKT?
I understand the sympathy many of our B&B have for Ford. I also acknowledge the amazing job that Mr. Mulally has done to lower Ford’s structural costs and sort out its culture issues. But that’s all back office stuff.
If Ford doesn’t sort out its branding, if it doesn’t build class-leading products (other than the F-150) that sell at a profitable margin, it’s toast. They may know what they have to do, but will they do it? And can they do it in time?
Clearly, the best thing that could happen to Ford right now is an economic recovery. A rising tide and all that. I doubt it’s gonna come within the next year. We shall see.
Before then, what’s the bet Uncle Sam lends a helping hand? In for a penny . . .
Mercury is dead. Mulally is just silently killing it because Ford can’t afford the dealer payout to just flat out kill the brand. So they are doing it slowly. Kill one model here, cut marketing, kill another model. Kind of like those insane spinster wives that kills her husband by poisoning him a little bit each day.
As per Lincoln, I see that Ford is trying to position it as a technology brand. Not too bad, but I don’t see it being held in the same regard as Lexus and Mercedes-Benz. They will need many hits out of the park to pull that off. I don’t see it happening.
And I can see Volvo being sold off this winter at the latest.
Lincoln isn’t any worse off than Acura, and I’d say better off. It doesn’t seem to hurt Honda.
MKT? Well, MDX?
The MKZ is a dressed up Fusion. Well, ok, and it’s competitor, the ES, is a dressed up Camry. It even comes standard with cloth seats. Not let’s imagine for a second if the MKZ, instead of coming standard with heated/cooled leather, came with regular old cloth.
So, what about Nissan?
What does Toyota stand for? What does VW stand for? Honda? Nissan? Even these days what does BMW and MB stand for?
Answer?
You’ve been asked over and over again about Nissan being bailed out but refuse to answer why?
rnc
Because I forgot. Yes, is the simple answer.
But it’s hard to call the Nissan loan a “bailout” as they’re not going bankrupt. While Mulally’s trying to turn the tide, Ford is. Has been for some time now.
What would it take for Ford to be off of “Death Watch”? What parameters would they have to meet?
EDIT: Yes yes, “not headed for bankruptcy” but I mean hard parameters, numbers, achievements. Measurable things. “Headed for bankruptcy” (or not) can be a matter of opinion.
BDB :
July 30th, 2009 at 4:37 pm
What would it take for Ford to be off of “Death Watch”? What parameters would they have to meet?
A profit would be a good parameter.
I think Ford will make it. I know they would have if the government had let the Loser 2 die. Now we might just have a three coup de grace to administer, since there isn’t enough space for 3 healthy companies. Yet another downside to the bailout is that you keep 3 weak sisters, when the smart move would be to let the runts die so that the strong could live.
Personally, I’d say a profit for two consecutive quarters.
+1 GuyIncognito
David: Agreed.
Sajeev: Joe Laymon was part of the purge. Joe’s prior power was stripped and his last childish “nah-nah-nah” effor to feel like he still had it was to claim loudly that he was in control of CEO succession. Note that he ‘left’ the day after the article where he was quoted came out. Jay mays doesn’t run anything and has been given a fluff title and an office in London. Derrick Kuzak and Peter Horbury are in charge of design. Feilds has shown a willingness to learn from his mistakes, which has been a rare virtue of prior execs.
Frank: The talent pool was thinned out during all of the severance package offerings so they may have some execs who would be slightly better than Fields, but not better enough to justify removing him. If he’s not the problem, he’s automatically a part of the solution.
Robert,
My baby sister Accountant in LA has a Flex and loves it to death. She gets compliments on it all the time.
Its cooler looking than a minivan
RF: I’m confused. I agree with you on the Volvo issue, and sort of on the DOE issue, but the branding and current vehicles? Huh?
You don’t like the Flex…ok, it was expected to be polarizing so no surprise there, and you think that Lincoln is in a holding pattern.
But Lincoln just launched the MkZ, MkS, and MkT over the last 3 years. That’s a product onslaught compared with Lincoln’s history. The products aren’t spectacular, but progress is being made with each new launch.
What else about the lineup don’t you like? The Explorer has become a niche vehicle and is looking at a complete overhaul by 2011, the Edge gets a Fusion-esque facelift soon, the Escape is selling well, the updated Fusion is as good or better than the Camry and Accord, the Taurus can go toe to toe with the Avalon, the Focus is moving to the Euro/Mazda3/S40 design, and and the Fiesta (although poorly named) looks promising.
As always, F-Series rules the roads.
It looks to me like Ford has the best full lineup in many, many years. Where are the branding / lineup problems?
Sorry Robert, but once again we need to straighten some things out here.
Firstly – the money loaned to Ford, Tesla and Nissan, to be followed by probably every manufacturer of automobiles in the US is a LOAN!!!!
As such, it is REPAYABLE. It is not a bailout and this is something that is devastatingly simple to understand. You simply cannot legitimately lump Ford in with GM and Chrysler, not matter how much it suits your own agenda. Sorry to be direct on this, but TTAC needs to remain on the right side of honest here and you are being disingenuous at best.
How many CUV’s do Ford have? Well, as it happens, less that Toyota and Honda:
Ford – Edge, Flex and MKX
Toyota – RAV4, FJ Cruiser, Highlander, RX
Honda – CRV, Element, Pilot, MDX and RDX
Flex was not designed by committee – a committee would never have come up with such a distinctive and stand out design. It is also growing its share of the segment and banging home increased sales every month. The idea that once everyone who wants one, has one sounds great to us but EcoBoost demonstrates that Flex has lots of life left in it.
Lincoln has one of, if not, the youngest product line-ups in not only it’s history but in the whole of the premium vehicle segment. The last 12 months has seen:
MKS
MKS EcoBoost
MKZ
MKT with and without EcoBoost
And, they have more to come and soon too.
F-150 is certainly class-leading, but you have forgotten all the others:
No other manufacturer has more vehicles with 5* safety ratings
Quality at Ford is now on a par with or even beating the best in the world
Ford has more technology innovations than most other companies including elements such as SYNC.
Fuel economy is either the best or amongst the best for every product they have, even before you count the world’s most fuel efficient SUV (Escape Hybrid) and America’s most fuel efficient mid-size sedan (Fusion Hybrid).
And, we have not even got in to the remarkable investment in powertrain and new products that sees Fiesta, Global Focus, Explorer, 2,0 liter EcoBoost, BEV’s and Powershift technology coming here in 2010 (and more besides by the way).
All told, this is a Deathwatch too far.
Time to congratulate Mulally and the Ford team for a remarkable job to date.
Is the work complete – hell no! Are Ford on the right track and moving fast in the right direction – hell yes!
@jamie1:
How many CUV’s do Ford have? Well, as it happens, less that Toyota and Honda:
Ford – Edge, Flex and MKX
Toyota – RAV4, FJ Cruiser, Highlander, RX
Honda – CRV, Element, Pilot, MDX and RDX
If you are going to call the butch-looking soft-roader Pilot a CUV, then it is only fair to call the butch-looking soft-roader Escape a CUV aswell because it’s the same kind of deal. So that gives Ford 4 for sale right now, with the MKT on the way.
Also, the Toyota FJ Cruiser is 100% SUV in the spirit of the Xterra and Wrangler Unlimited. I think you were thinking of the Toyota Venza.
_______________
the world’s most fuel efficient SUV (Escape Hybrid)
Complete with a 1000lbs towing capacity and minimal off-road ability.
I would imagine that the average American doesn’t even KNOW about the DOE loans. Hell, I’d be willing to bet they don’t even know there IS a Department of Energy. To paraphrase our friends at New GM, mind the perception gap!
Bingo!! And that is the reason why Ford will gain in the perception gap while GM and Chrysler will lose. Sure, insiders and some tea-baggers will take notice, but the average American will not. Ford played that hand well as far as I am concerned. I wonder how long this loan will take to pay back? 3 years? 5? 8?
RF,
So you’re saying that our congress was so prescient in 2007 when the passed the DOE Loan bill that they knew that the auto industry ( domestics, startups and transplants) would need a big loan in 2009?
That’s giving them a lot of credit.
I suppose I should have more respect for them.
Gregg
Check our coverage at the time. But yes, when the loans were mooted, it was clear Chrysler and GM were in deep doo-doo.
We are in the midst of a hundred year storm. So I at least can’t figure out whether Ford is going to be successful or not.
I do like a lot of their products. But the same can be said for at least a half dozen manufacturers these days. My own fear is that this entire industry is headed south thanks to government subsidization.
RF – While I love reading your perspective on just about everything automotive, I gotta side with the other posters. Ford is pulling it together, and doing so fast.
Sometimes I wonder if all the complaints about Ford lately are just to stoke the TTAC fires now that GM and Chrysler have faced the inevitable. I know, didn’t Chapter 11 feel kind of….anticlimactic? Once the Feds gave the Big 1.3 their soft landing, there was no End of Days. It’ll be a few years before the complete
apocalypse of American Leyland scenario fully plays out. In the meantime, Ford’s a good target.
I understand the need for legitimate controversy and agree that Ford is hardly out of the woods. Still, isn’t a little positive encouragement possible without turning into a Dan Howes?
As for why Mark Fields is still around, think about this: Mullaly has forced humility upon him, and it’s been good.
I suspect that when Big Al got to Ford and checked out MF, he saw a mullet, a big mouth, a corporate plane abuser and showboating tool of Ford management culture. But he also saw raw talent, a good product/operations mind and a useful institutional memory. Mullaly probably said something on the order of this to MF: “shut up, watch, listen, learn and THEN execute, and you might just be an important part of what we’re going to achieve here.”
The proof of this may be that it has been awhile since Fields has said or done anything stupid. If he took his management lessons seriously, kudos to him!
I thought government services suck, and who wants to go to the Post Office, anyway?
But they’re just to hard to compete against?
What? Pick a side, please.
Once again, TTAC is taking the unpopular but TRUTHFUL approach to reporting.
I agree 100%.
Lincoln is a joke. No one will shop Lincoln if they are looking for a legit. luxury car. If they are looking for a fancy (and extremely overpriced) Ford, then Lincoln has you covered.
The Flex has been a HUGE failure. It hasn’t yet sold 100K units like Jimbo Farley said it would. It is on track to sell 60K units this year. Ford clearly did not do their homework when the committee was “designing” that “minivan replacement”. What “minivan replacement” has no sliding doors? What “minivan replacement” has a pitiful amount of cargo room?
The Flex should have never seen the light of day. Ford would be in a much better financial position had that invested ANYTHING into the Taurus X. Ford took a gamble with the Flex and lost.
As for CUVs, Ford makes (or rebadges):
Escape, Flex, Edge, 2011 Explorer, Mariner, MKEdge, MKFlex.
Ecoboost is a fallacy…nothing eco about it.
Lincoln is half hearted rebadges that cost too much money.
Mercury is a joke…even moreso than Lincoln.
Ford is still very much a truck brand…and the only thing the do some what right is the F-series.
Ford cannot rely on gimmicks to sell their cars and trucks…which is what they are doing. They need to focus on the small things like the imports do. Let’s face it, Hyundai builds a better luxury car than Lincoln does. And that is proof that Ford still doesn’t get it.
I’m shocked, shocked P_71CrownVic agrees! Flabbergasted.
Ford does have a long way to go, but they have come very far in 3 years. Avoiding bankruptcy (so far) and updating their whole lineup save the Ranger and the Panthers is a good start. But when you get down to it, their whole current lineup of updated vehicles is just that: updated versions of older, borrowed platforms. Taurus – updated 90’s Volvo chassis, Fusion – updated Mazda chassis from 2003, Focus – updated FoE chassis from 1999, Escape – updated Mazda chassis from 1999, etc..
It will be the upcoming next generation of Fords on the all new chassis’ that will tell the tale, starting next year with the Fiesta. And how Ford handles the generation after that: will they fall back to the old habit of warming over the current chassis and hoping it holds for another 5 years, or will they do a full up redesign and keep the model ahead of the curve?
It will be 10 years before we know the answers to that question. In the meantime, why not ride the positive wave for a while?
And a side question? If the DoE loans were not available, where would Fords Transformation Plan be?
“The clock is ticking. As BusinessWeek’s David Kiley points out, “During its quick trip through bankruptcy court, GM shed $40 billion in debt. That’s roughly the amount Ford could have on its books in just two years.””
It seems to me this is Ford’s biggest obstacle to success, GM and Chrysler have an unfair financial position in regards to debt (with deep pockets to continue in that position). I would assume they are getting the same UAW concessions otherwise that’s another problem for them to overcome.
When was the last time that Ford posted a quarterly profit?
Fairly recently if I am remembering correctly.
Yes, it was recent (Forget exactly when) but then the whiz kids on Wall St. decided to f!@# up the world economy, and you know what happened next.
Branding…
Branding in the automotive industry has little to due with advertising message. This seems to be the primary complaint against Ford. Yes, “Drive One” is lame. Of course, “Moving Forward” from Toyota is just as bad.
Toyota and Honda have never had coherent ad campaigns, but most would say that they have solid branding. Toyota and Honda have developed their brands through the nature of their products over several years of effort.
Ford has been working hard over the past few years to build a reputation for quality, safety, and value with a distinctively American flavor. It takes time for that effort to take root, but it is starting to work. Consumer Reports and other organizations have praised the quality of Ford vehicles. Ford has the highest number of 5-Star crash test rated cars. Based on surveys and increased market share, the brand message is slowly but surely taking root.
Models…
Ford’s model line up including CUVs looks strikingly parallel to its main competitor, Toyota. Ford has a few fewer model than bigger Toyota, and few more models than smaller Honda. That would appear to be an appropriate allotment for its marketshare.
Cars
Fiesta/Yaris/Fit (yes, I know its a 2011 model)
Focus/Corolla/Civic
Fusion/Camry/Accord
Taurus/Avalon
Trucks
Ranger/Tacoma/Ridgeline
F Series/Tundra
CUV
Escape/RAV4/CRV
Edge/Venza
Flex/Highlander/Pilot
SUV
Explorer/4Runner
Expedition/Sequoia
Dead Brands Walking…
Ford at this point can live fine without Volvo. Ford did gain a crash course in safety know how, but those lessons have been learned by this point.
Mercury has been quietly dying for a while now by simply killing each model off when an all new Ford counterpart appears. Ford spends little money at this point to keep Mercury around at this time, and it smooths the transition away from stand-alone LM dealerships.
Lincoln has become the Ford’s Acura. It is simply repackaged Fords, but its a business model that has worked for Honda for two decades. Actually, Lexus business model looks very similar since the bulk of their sales are from the ES and RX which are just reworked Toyota models. As long as the development and marketing costs are less than premium Ford makes off of them, there is nothing wrong with it.
Bailouts…
TTAC is deeply against bailouts or anything that looks like a bailout. That is very clear. I believe your basis for that idea is that it won’t save the companies being bailed out in the long run.
I agree that the bailouts won’t save GM and Chrysler, but I would argue that is irrelevant. The purpose of the bailout was to bring down the failing auto makers in a controlled manner to prevent The Great Depression 2.0. If it takes 100 billion (heck 200 billion I’m spending tax payer bucks) to keep the ecnonomy from imploding, that is tax money well spent.
Is it fair, no, but life never is. I am perfectly content with GM and Chrysler heading C7 in a couple of years. The financial system should be healed, and the economy will be able to take the blow.
Basically, Robert, we see the world differently, and I plan to vigorously disagree with you on the subject. I suspect you wouldn’t have it any other way:)
Ford is on a roll product wise, but even more important and long lasting will be the cultural changes that are allegedly occurring.
If true, Ford could be what VW has failed to be – an interesting, high quality non-luxury brand. They have a ways to go, but it looks like Mulally has Ford folks rowing in the same direction.
The Post Office is a government monopoly because it is a job nobody else wants.
UPS and DHL seem to do fine competing with them on package delivery, though.
“Other peoples money”? Really? Where do you think the $20 bill in your pocket came from? Your own private printing press? Your boss’s private printing press? Uh, no. What does it say across the top of the bill? That’s right, for you it says CANADA in big, block letters, with a portrait of the Queen. That should give you a hint.