By on October 20, 2006

07edgelaunch_918122.jpgStar Trek based many of its best episodes on simple homilies. In “The Lights of Zetar” (Star date 5725.3), Memory Alpha is attacked. Creatures from the planet Zetar concoct an energy storm that ravages the planetoid. The Federation’s main computer database, containing all of the cultural and scientific data they’ve ever gathered, goes fubar, and with it, the Federation. What did they expect? To put a little Yoda spin on it, into one basket all eggs should not go. OK, now, Earth date October 16, 2006. Dearborn rolls out the Ford Edge. See what I mean?

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

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

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

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

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

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

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

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

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62 Comments on “Ford Death Watch 13: Ford Feels Edgy...”

  • avatar
    Jonny Lieberman

    A) ToMoCo is hysterical.

    B) I was about three feet to the left in that photo

  • avatar

    Is Farago paying by the allegory?

  • avatar

    Yes, metaphorically speaking.

  • avatar
    Sajeev Mehta

    With nothing new in the pipeline, with its history of model neglect, any FoMoCo interest generated by the cross-border crossover is bound to cool, and quick.

    That’s what gets me too…even if they rebadge European Fords (there was talk of bringing the Fiesta here as-is) that would be good enough for a couple of years. Something is better than nothing.

  • avatar

    Something is better than nothing.

    I disagree. Perhaps conspicuous in absence, but a really bad product, if nothing else, leaves a much worse impression than no product.

  • avatar

    What I don’t understand is how there could possibly not be anything in the pipeline. How could a small car not be in the works? Updates for everything? And if they aren’t, how does Ford expect to leverage its depressed, jaded, and feeling like they are imminently going to be layed off work force, while they are left hanging on the vine like so many Ford products, to passionately work to create these new vehicles? Meanwhile the new, new, new acronym that’ll save everything is formulated.

  • avatar

    Re: bringing Eurofords over…

    It’s too late, at least for my vote. For years I have looked at the Focus RS, wondering why it’s not sold here. But now that the Mazdaspeed3 is released, there is no need for the Focus RS anymore.

    Maybe recent Mazda and Volvo products are going to save Ford’s bacon (after a sale of Jaguar and Aston Martin). At least the former two brands I mentioned seems to be doing better than GM’s foreign acquisitions.

  • avatar

    Ford doesn’t need new products; it needs BETTER products. It doesn’t need MORE products; it needs a few GOOD ones.

    They should embark on a major refresh of their current line-up, from the doddering Crown Vic to the diminutive Focus.

    If AM thinks that a Hollywood-like blockbuster (Edge! Fairlane!) is going to save FoMoCo’s collective ass, he’s wrong. The Blue Oval needs to build better versions of existing products to hang onto their loyalists and THEN begin the long, arduous process of conquesting from other brands.

    Do they have enough time and resources to git er done? I doubt it. Even if they do the right thing and ditch Aston, Land Rover, Jaguar, Mercury and Mazda (yes, Mazda), they may not have the money or mojo to fix Lincoln and Ford.

  • avatar
    Sajeev Mehta

    I disagree. Perhaps conspicuous in absence, but a really bad product, if nothing else, leaves a much worse impression than no product.

    True, but let’s get specific. The “bad” products in question would be the Ford Fiesta (worse than a Yaris or Aveo?) and the European Focus. Those cars should be slated for arrival next year, there’s nothing bad about them, even if they are lacking a tri-bar grille. Too late now, I’m sure.

    Ford needs product. A new Vic, new Focus, and something smaller than a Focus. Ford of Europe has great product to remedy the last two.

  • avatar

    Something is better than nothing

    Not always true but in this case definitely so.
    Especially the European Focus is a good car that can compete with the best in class Europe, let alone in the US (the competition in this particular segment is more tough in Europe, since it’s the most important one in Europe, mostly due to taxes and space issues). It’s basically a Mazda3 with a nicer interior and better looks. AND the ST version has the Volvo I5 Turbo from the S40/V50 T5. It can compete with the Civic/Golf(rabbit)/Astra/Corrola and it would certainly beat the hell out of anything GM offers in this segment. Ok, I guess that’s not too difficult…

    It’s a good car by all means. The S-MAX and the new for 2007 Mondeo (Contour?) don’t look too bad either…

    I really don’t see what’s keeping them.

    I’d like to see the Mustang Shelby GT (looking at the stats and reading TTAC’s review I think that’s the best one) on sale down here too by the way.

  • avatar
    Sajeev Mehta

    It’s a good car by all means. The S-MAX and the new for 2007 Mondeo (Contour?) don’t look too bad either…

    I really don’t see what’s keeping them.


    I got to sample the current Mondeo in both diesel and gas variants, its a sharp car. Its so good that I’m willing to bet it would outsell the Five Hundred (which has to die) in a matter of weeks.

  • avatar

    The Interweb is a atwitter with rumors of the next Focus RS. Two door hot-hatch, sporting a 300HP turbo chargered 2 liter, AsWD, big ass brakes, Rally bred, and a mean look to boot. But nooooo Ford won’t bring that to NA, we get the Edge instead. Ford can DIAF.

  • avatar
    Frank Williams

    You’d think Ford would learn a lesson about putting all their eggs in one basket after the way tanking F150 sales left them standing on the sidelines watching Toyota pass them to become #2 in America.

    Now it looks like they’re going to do it again with the Edge. You have to wonder what the product development staff has been doing for the past 3-5 years if they don’t have anything new in the pipeline for 2 more years.

    (Also, have you noticed how Ford has started naming their vehicles after shaving products – first the Fusion, now the Edge? I guess it’s only a natural progression considering all the Schick they’ve been producing the past few years.)

  • avatar

    Also, have you noticed how Ford has started naming their vehicles after shaving products – first the Fusion, now the Edge?

    Goes with their new grille. Maybe there can be a new Mach 1 Mach 3 Mustang.

    You know, names like Freestyle, Edge, and Fusion would have been, like, totally radical dude, back in 1993. To the extreme, even.

  • avatar
    Jonny Lieberman

    re: Euro Focus.

    I spoke at length with some Ford dudes about why they just don’t “bring it over.”

    They whacked their heads on the table in frustration.

    Europe and America have different emissions laws, and different crash laws. You can’t take a product engineered for one market, and sell it legally in the other. It would have to be engineered for both from the get go.

    However… come 2011, emissions and safety standards between the two markets should be properly merged.

  • avatar

    It would have to be engineered for both from the get go.

    Why wasn’t it?

  • avatar

    I love the Mach 3 Mustang.

    I think the Fusion (car) was introduced before the Fusion (razor), though.

    On the subject of the Focus, I recall Ford making great fanfare when it was first introduced that it was a world car, substantially the same in every market. So why have the Euro and NA models diverged so much?

  • avatar

    I find myself agreeing with R.F. on this one.Build a good car and price it right.Most car buyers don,t care if they are buying a new product, what they want is value for thier money.
    Its a lot cheaper to improve on an existing model than to try all over again.Does the original VW come to mind?25 yrs same model it just got better and better,How about B body Chev.1977 to 1999 made GM a bundle of money and was a great car.
    FORD has to play with the cards in thier hand.and play them well.and it just might work.

  • avatar

    The Rav4 and CR-V are on their 3rd generations. They’ve had 10 years to build brand awareness and to hone their product to the market, and they still don’t sell 150K a year.

    Ford is new to CUVs, and it shows in their market targeting. Someone is going to have to tell Fields that Phil is a woman. While they’re at it, they can tell Fields to get a tie and a haricut.

    150K per annum? only at the expense of the Freestyle, Explorer and Escape.

  • avatar
    Joe Chiaramonte

    The Edge might help Ford’s image a little, but I still believe they’ll only be perceived to be as good as their worst product. So, every day the current NA Focus sits on dealership lots in the current market as the only viable car smaller than intermediate-size available, the steeper the climb uphill. Same for the Ranger.

    Smart buyers look at what’s available from various manufacturers when they buy. They quickly eliminate those companies who have nothing to show them or can’t compete. This kills foot traffic.

    For an exercise in the obvious, compare/contrast Ford to Honda/Toyota:

    Small/fuel efficient coupe/sedan:


    Compact sedan:


    Intermediate sedan:

    Fusion (finally, some competition)

    Large sedan:

    ??? (move up to Acura RL)
    Five Hundred, Crown Victoria

    Sports car:

    MR2 (still available?)


    RAV4, Highlander
    Escape?, Edge, Freestyle


    FJ, 4Runner, Sequoia, Land Cruiser
    Escape?, Explorer, Expedition

    Compact truck:


    Ford’s highest priority right now should be to bring in the European Focus next year, while working on its next-generation world replacement to follow within three years. Make it good enough to sell here and in Europe out of the gate.

    Update the Fiesta to make it a viable small hatch with style within two years.

    Make the next generation Fusion as good as the Mondeo or Australia’s Falcon. Timeline, three more years, tops.

    Make the 3.5L V6 standard in the Five Hundred within a year. Offer an optional V8 or turbo V6. Dump Vicky.

    Give the Mustang an independent rear suspension next year. Lose some weight.

    Reverse-engineer the Ridgeline to create an AWD replacement for the Ranger based on the Edge platform. Take a risk here and leave real trucks to the F150 crowd.

    Unless most of these things are already in the works, Ford will not see black ink for 5+ years.

  • avatar

    You can’t take a product engineered for one market, and sell it legally in the other. It would have to be engineered for both from the get go.

    Wait, wait. Back to the above for a second.

    Why, pray tell, is this so complicated? Honda, Toyota, VW, Subaru, BMW, Hyundai, etc etc etc seem to manage this “world car” feat all the time.

  • avatar
    Joe Chiaramonte

    Fine, then. If they can’t bring in the Euro Focus, how about a Mazda3 clone in Ford sheet metal?

  • avatar

    One of the problems with Ford is that they have always put their eggs in one economy-of-scale basket. It started a century ago with Henry Ford’s Model T. Their present day Model T is the F150 pickup truck. It makes up about a third of their volume. And more than all of their profit (since all of the rest makes a loss). What if Model T, err, F150, tanks one day (maybe because GM and TM are stirring up some fresh pickup truck cocktails)?

  • avatar

    To further complicate the situation take into account the fact that small cars generally have very small profit margins, if any. In fact, it is common for small cars to lose money even on a “parts and labor” basis. By that I mean that many small cars (especially if made in North America or Europe) have a greater parts and labor cost than they can be sold for! So if you are Ford bringing out/over a small car is probably NOT going to help much financially. My guess is that the Edge is quite profitable on a per-unit basis, it’s in a growth category, and that is why it is getting the emphasis it is.

  • avatar

    Fine, then. If they can’t bring in the Euro Focus, how about a Mazda3 clone in Ford sheet metal?

    That would be the Euro Focus.

    The excuse that it isn’t built to meet american regulations doesn’t make sense to me. The chassis is used for the Mazda3 AND the Volvo S40/V50, which are both sold in the US, so it really shouldn’t be that hard.
    They should be able to use the engines of those cars if nothing else works (they already do just that in the ST version).

    On the safety side I believe that it scores 5 stars in the EuroNCAP crashtests, so it definitely isn’t unsafe. But I don’t know what kind of hardships they put vehicles through over there…

  • avatar

    It would have to be engineered for both from the get go.

    Why wasn’t it?

    Good question.

    If one can make an Aveo a global car to be sold from australia to europe, passing through the US and most Asia, why can’t the euro focus?

    Euro Focus, based on the global C1 platform that underpins the Mazda3 and Volvo S40. And that would happily support any version of the MZR engine.

    I think the emission/crash rating excuse is a really poor excuse.

    Then again, they probably don’t want to canibalize Mazda3 sales.

    Then again, it’s more likely to be an agreement with Mazda like:
    “If you agree to sell the escape under the tri-butt model, we promise not to bring the much better euro focus that would compete with the 3”

    We’ll gladly badge engineer the FusionMilanZephyr on our own. Same book. Different title.

  • avatar
    Jonny Lieberman

    A tie and a haircut?

  • avatar

    Compare the Edge with a Toyota RAV4.
    In what way is the Edge better?

  • avatar

    ‘Til now, I’ve resisted taking generalized pot-shots at Ford’s managers.

    I always assumed that even with the many obvious problems at Ford, there must have been some really good talent lurking in the background. I assumed that as bad as things are, they must have had a really strong plan to turn things around within a reasonable period of time. I mean; How can you have so many well paid managers, and not have positive results?

    For goodess sakes, Ford’s been building cars for a 100 years! Ford’s been awesomely profitable for many, many years. My frustration is showing, but I thought the Ford Death Watch was overly pessimistic.

    I throw in the towel. You fellows are right. Ford is screwed.

    I can’t comprehend how Ford could have so little new product in the pipeline. I don’t understand how a huge company with such expensive managers would allow Ford to be so off base.

    You guys were right, I was was wrong.


  • avatar
    Martin Albright

    Sean, you said:

    Ford is new to CUVs, and it shows in their market targeting. Someone is going to have to tell Fields that Phil is a woman.

    Isn’t the Escape/Tribute/Mariner a CUV? Which brings me to my next question: Are the Escape/Tribute/Mariner getting the axe in favor of the Edge/Fairlane? Seeing as how they just came out with hybrid versions of the Escape/Mariner it would seem a waste of effort to dump them now, but what does it do to sales when “Phil” can buy the older-tech Escape for considerably less $$ than the edgy new Edge.

  • avatar
    Jonny Lieberman


    Edge vs. RAV4

    It doesn’t look like a traditional SUV, the exterior is much more complex and eye-catching, if not pleasing, the interior is nicer, the belt-line is high (giving off the perception of safety), the sunroof/moonroof combo is the best not only in class, but in the biz.

  • avatar
    Sajeev Mehta

    Europe and America have different emissions laws, and different crash laws. You can’t take a product engineered for one market, and sell it legally in the other. It would have to be engineered for both from the get go.

    That was the whole point behind the original Focus: it was designed for both markets…we’re talking cost saving synergies and all that management doublespeak. So someone screwed up.

    But then again, if GM could bring the Holden Monaro/Pontiac GTO to the US (moving the gas tank inside the trunk was no small feat) you’d think Ford would pull out all the stops to re-engineer the Euro Focus to our shores in the next 1-2 years.

    Guess its easier to rest on your Mazda and Volvo based platforms and hope for the best.

  • avatar

    Cost. EU Focus (and Fiesta, for that matter) is an expensive platform, designed to meet the higher expectations of the European buyer. Bringing it here where cars this size are expected to be ‘cheap and cheerful’ would not work . . . either the price would be uncompetitively high or they’d lose money on each one, which we all know cannot be done. Add to that the cost of homogating for US market, and you do not have a viable proposition. Maybe as a Lincoln . . . do you think any US buyers would buy a high-spec luxo B- or C-car? Maybe . . . that’d be bold, that’s for sure.

    Alternative is to cost-reduce the platform . . . this takes time, and I think there’d be plenty of negative comments here on the smarts in cost-reducing a vehicle. It don’t work too good.

    Thus . . . no EU products here, at least short term.

    A better alternative might be to take the low-cost ’emerging market’ vehicle like the Icon being sold in India or South America and up-spec it to sell here. But that would surely compromise the brand.

    This same logic really applies to the question of ‘why weren’t they designed as a global platform from the beginning’, too. An EU Focus or Fiesta as positioned are just not right for the US market, and making them suitable for the US would be a compromise for the Europeans. Too great of a compromise to take. A Volvo or a BMW can do it because they’re a luxury vehicle here or there. The others keep their identity, too . . . cheap and cheerful, sports car, etc. But Ford US and Ford EU just do not position their cars the same way.

  • avatar

    That was the whole point behind the original Focus: it was designed for both markets…we’re talking cost saving synergies and all that management doublespeak. So someone screwed up.

    The execution on this side of the pond was, to put it mildy, flawed. We’ve all heard the stories about how the Focus was so frequently recalled and got such a bum rap that Ford put an extended warranty on its powertrain to drive up sales.

    There was some rumor that the production guys in North America couldn’t deal with taking another EuroFord product and building it in NA, not to mention the C1 being costier, so they nixed bringing the C1 over here. (I guess they were figuring in the >$1k legacy cost in.)

    Now Focus is behind the hypercompetitive curve, despite its new Mazda-based powertrain. Every other competitor has been refreshed since its introduction. The updated model next year gets a new 2-bar grille and a coupe, but what else?

  • avatar

    Ford’s hesitation in bringing the C1 Focus stateside might have been a consequence of the lukewarm initial reception to the 1996 Taurus. They must have concluded that people aren’t willing to pay more for an improved car. Never mind that they’ve been forced to offer rebates and cut-rate financing to move an older design.

  • avatar

    It is fairly obvious that most of the commentators on this site have noted that Ford does have some great product, especially in smaller/medium size cars, they just don’t sell them in NA. Ok, you have a cash strapped company that is going to spend Billions on new cars, but somehow couldn’t figure out how to spend a billion to get the Mondeo/Focus over here. Um, that is managerial incompetence, no more, no less. Nice to see Mullaly put people first, but unless they are all going to be trained as the hardest ass closers you have ever seen in your life, it is going to be pretty tricky to make money at Ford without any new product until 2011….

  • avatar

    The arguement that they can’t bring the Euro Focus over because of different standards really raises eyebrows. Why is the Mazda 3 and Volvo S40 here then? How did the originally Euro and Asia-spec Yaris (designed in France) and Fit (released 2001 in the rest of the world) get brought over? Especially since the Fit doesn’t seem to have been designed for the NA market to begin with (why else would you wait 5 years to introduce it?)

  • avatar

    Is the Escape an SUV or a CUV? I’m not sure. I had always thought of the Escape and Liberty as being on the tougher side (vs. Rav4 and CRV) and so classified them as SUVs in my head, which obviously doesn’t count for much. The only evidence I have is that I always thought Ford marketed the Escape as a mini-Explorer, and not a CUV, but I’m not sure the distinction is all that distinct, or meaningful.

    I assume the plan is for pricing on the Escape to continue to fall to around $20K on average, while they try to get upper 20’s for the Edge.

    A suppose a haircut and a tie won’t fix Ford’s problems, but I’d rather see the execs blend in while the product stands out. He is verging on a mullet, you know, which may help F150 sales, but still.

    As far as Ford’s excuses for not bringing over the Euro Focus, the fray is right that they are pretty lame. Whining about cost won’t help Ford NA — the Mazda3 may be expensive to build, but commands a premium price in the market, and Mazda is profitable.

    Ford knows full well how to engineer for cost — they did it in family size vehicles by reengineering the S80’s platform for the inexpensive 500, and they could do it with the Focus, reducing costs on both sides of the Atlantic.

    The only reason that the Euro Focus isn’t here is that Ford NA didn’t show the will and didn’t do the job. They shirk while Toyota and Honda work.

  • avatar

    The auto media’s addiction to novelty is getting beyond pathological, but it’s a reflection of the ADD pandemia of which Americans suffer. I know that most Americans can’t remember much of what was going on a couple of weeks ago, but not long ago, it took years for car makers to come up with new models. Now auto “journalists” will suffer from panic attacks if they don’t have every week a new car to introduce or to test drive for the first time. Ford has had recently a new F150, Mustang, 500, Fusions, now the Edge. What do you want? They are in a financial crisis and you want them to come up with 8 new cars out of nowhere? And if that were the case and Ford were to brag about it you’d attack them for talking about their upcoming latest and greatest cars. I always thought that what will break car companies is not so much competition among themselves but this insane race to constantly introduce new models- a race fueled by hyperactive kids bred on video games who are now in the auto media.
    Yes, to be in the state that Ford is and pay no attention to product development is bizarre, but who knows what their budget is and what it takes to change their corporate culture. Give the patient some time to heal. In the meantime, Ford should be slapping some different sheetmetal on their 500, Escape, Focus and putting some updated interiors in there to give you guys something new and shiny to look at.

  • avatar
    Jonny Lieberman

    So… Ford lost 1.6 billion or whatever last month because of… me?


    Dude — you’re blaming the messenger.

  • avatar

    Jonny wrote:

    “Europe and America have different emissions laws, and different crash laws. You can’t take a product engineered for one market, and sell it legally in the other. It would have to be engineered for both from the get go.”

    Count me also amonst the vast crowd who are amazed by
    this. Apparently Toyota did this with the Yaris, abundant
    examples of other companies doing this have been
    provided. Why isn’t this considered a basic requirement?
    SherbornSean wrote, essentially, that this was failed
    execution on Ford NA’s part, but if so then the EuroFocus
    must have been engineered appropriately yet manufacturing
    and marketing dropped the ball. But if manufacturing and
    marketing (sales) dropped the ball then they could pick it back
    up reasonably quickly. Engineering or marketing
    (requirements definition) mistakes would be implicated
    if Ford is unable to bring the EuroFocus over. Management
    mistakes would be implicated for that, as well as the possibility
    that Ford remains unwilling to bring it over despite admitting
    it has insufficient current product.

    Another article topic…?

  • avatar

    Listening to chaz you would believe consumers are not hooked to new things. And last time I checked it’s pretty hard to create any buzz around something that’s been around for years (when was the last time you saw someone excited about a Crown Victoria, even though I think it has a huge potential to be a great car, and no, I’m not 85).

    It’s part of the cycle thing. But it’s probably not the journalists’ fault. It’s Honda’s fault.

    Honda has been cranking out a new accord (or civic) every 4/5 years for the last 30 years. In a continuous improvement fashion. They went from cheap shitbox to respected reliable cars. Same for Toyota and huinday.

    It sure it rattles the cage when your own product cycle is 9 to 12 years. And the replacement does not even bear the same name. I know, the name has to be changed to suit the cute F/E scheme. Who thought of that? A retard? Ah. A retard with an MBA. Focus Fusion Freestar Fairlane. Idiots.

    Ford has alot to overcome in their turnaround. I sure hope they succeed. I know they are out of trouble when they have one product I would consider buying.

  • avatar

    When Ford designed the Focus for Europe, it designed it with American regulations in mind. There is not that much difference between the European and American versions of the first-generation Focus.

    Unfortunately, when Ford brought the Focus to America, it changed some components for the American market, and then didn’t test them adequately before commencing production. Add labor problems at the main Focus plant in Michigan, and the results were numerous recalls and quality problems. The European Focus, meanwhile, has been praised for its reliability and quality! It is still the best-selling car in Great Britain.

    The sad part is that the Focus was a very nice car, and Ford did work out the bugs by the 2003 model year. Instead of updating the American Focus in tandem with its European counterpart, however, Ford decided to skimp and instead gave it a facelift, some new engines (which were an improvement) and an overall decontenting. No doubt some bean counter in Dearborn justified those moves at the time, but now the car is dying in the marketplace as the competition moves ahead.

    A heavily facelifted version – with a true coupe replacing the hatchbacks – is planned for 2008. Analysts who have seen it have actually praised it, so there may be hope. Apparently Ford will then bring the American Focus in line with the third-generation European model around 2011.

    The Focus symbolizes what ails Ford – it comes up with a winner, and then, instead of systematically improving the product (as Toyota and Honda do), it slowly strips out the content and allows it linger on the market for way too long without a major update.

    On another note, this past week the Taurus finally ceased production. There is another car that Ford allowed to die on the vine, thanks to lack of investment.

    I remember what a pleasant shock the original Taurus was in late 1985. Parked next to an Olds Cutlass Ciera, Chevrolet Celebrity or Dodge K-car, it was no contest. The Taurus was so far ahead in style, ergonomics, build quality and roadability it wasn’t even in the same league with its domestic competitors. And the Japanese weren’t in that market segment yet, as the Accord and Camry were still too small, and only available with a four-cylinder engine.

    That the Taurus should die as unloved rental-fleet fodder is a disgrace to the Ford Motor Company.

  • avatar

    I believe Yoda would have said, “Into one basket all eggs should not go.” Other that that, good essay.

  • avatar
    Steven T.

    Geeber, good points, particularly about the Taurus. What would that car have looked like today if Ford had kept to the trend-setting spirit of the original?

    To be fair, innovation seems to be at a low ebb for pretty much all of the participants in the mid-sized, family car field. For example, Nissan’s Altima and Maxima have somewhat flashier styling, but otherwise they don’t stand out.

    What should constitute “cutting edge” in this field? I don’t buy the idea that rear wheel drive is the way to go — these are, after all, family cars rather than grand tourers or hot rods. Perhaps new packaging ideas are most needed.

    If so, Ford should be given at least a little credit for trying something different with the Five Hundred (the taller profile). Too bad the car had nothing else to offer.

  • avatar

    Ford’s definitely on the Edge of bankruptcy. (pun intended)

    Ford’s total cash is ~17 million? That can’t be right..

    GM has 20 billion..

    A little bit of debt here..

  • avatar

    Why is Ford in a pickle again?? I just dont get it.. They are #2 and have American rural folks behind them who wont buy imports. Top it off with brands like Mazda, Volvo, Aston and Jaguar in the pocket. Why all this bugaboo about Ford going under?? Ford in Europe is doing well.. I have no idea why it should be empathized, sympathized blah blah

    BTW, Just came from Honda Lot. There is no competition in CUV market. 07 CRV is going to kick Rav4 and any other cuteute wannabes out of the ball park. No questions in my mind. If there is one car that looks good in person than photos, 07 crv is it. I am digging the black on black EX-L. No third row but talk about quality in and out.. Oh and the tail gate/spare works better. V6 not required in today’s lousy traffic where 30mph is beginning to look like a godsend over 5 mph.

    One other point.. Ford Edge’s Front grille/headlamp treatment seem like they ripped off Toyota’s FT-SX concept which came earliar.

  • avatar

    All figures are in thousands. Ford has 17 BILLION in cash.

  • avatar

    No wait, the issue isn’t the 000’s it’s that you aren’t looking at Ford Motor Company, you’re looking at Forward Industries.

  • avatar
    Jan Andersson

    As an old QA consultant, I know something about quality improvement. If Ford listened to twenty customers, they would know exactly what needed to be done. The twenty-plus people would only repeat what the others already had told them.
    And have the car makers adopted the computer business strategy? “Wait for the next version for improvements.”

  • avatar
    Martin Albright

    Sean: Re: SUV/CUV

    Since these aren’t exact terms, I’d break them down as objectively as possible.

    First off, CUVs were around before the term was actually invented (ditto with SUVs which have been around since before WWII) so we shouldn’t be surprised that the term comes after the product.

    I would say a vehicle with

    (a) a unibody chassis
    (b) that is either unique to that vehicle or is sourced from a passenger car, and
    (c) is available as either a FWD or AWD (or “on-demand 4wd”) with no low-range, should be classed as a Crossover (CUV) and a vehicle that has
    (a) a body-on-frame design,
    (b) that is typically derived from a truck design, and
    (c) typically has RWD or part-time/full time 4WD with a low-range tranfer case, would be an SUV.

    This description would cover probably 99% of the CUV’s/SUV’s on the road now, leaving out oddballs like the VW Toureg and Subaru Forester, which meet all of the CUV requirements but are actually available with a dual-range transfer case (Subarus are available with D/R T-cases outside the US market) and which I would continue to classify as CUVs despite their size just due to the body-on-frame construction.

    By those standards, the Escape/Mariner/Tribute are indeed CUVs, as are the RAV-4, CR-V, Murano, FX-35, Element, etc., while the Explorer, Expedition, Yukon, Blazer, Hummer, FJ Cruiser, Liberty and Wrangler are SUVs.

  • avatar

    “[In re, in what ways the Edge is better than the Rav4] It doesn’t look like a traditional SUV, the exterior is much more complex and eye-catching, if not pleasing, the interior is nicer, the belt-line is high (giving off the perception of safety), the sunroof/moonroof combo is the best not only in class, but in the biz.” – Johnny Lieberman

    The Edge will be a tough sell against a Rav4…

    The Rav4 will be easier to park, either get significantly better fuel economy or go a heck of a lot faster or both, has more cargo and very nearly as much passenger room, has a third seat option, MSRPs for less and comes from a company with a solid rep for quality (yes, I’ve had my fill of Ford transmissions).

    The Edge will appeal to someone who wants a “bigger” car and only measures the “bigger” on the outside or puts a premium on the qualities Lieberman mentioned

    One other reason the Edge will have trouble: colors. Some years ago, I went in to a Ford dealership and the color selection drove me out. The only colors on the showroom floor were plum and lavender. I went from there to a Honda and then a Toyota dealer and found restful “champagnes”, “forest greens,” etc.

    Today, I saw an Edge, in the flesh – er, metal – driving by. It was pumpkin orange. I can hardly believe people want to buy pumpking orange cars. I can only presume that this was the one buyer in New England that absolutely HAD to have an Edge and was willing to put up with the color choices foisted off on the area dealerships.

    Outside of the color, it looked pretty good. This one did not get the fancy sunroof (that I remember noticing).

    Jeepers, Billy Ford, paint ’em dark blue or silver or something, will ya?

  • avatar

    Ar-Pharazon: Interesting point. I worked in Italy for a while, there Fiat sell a badge engineered Punto as a Lancia Epsilon. They’re the same car, but since the latter’s a lancia, it comes with more frills and better interior, therefore more prestige and (one would hope) more profit for FIAT. And the Lancia’s carry much more status than the FIATs. Why can’t Ford import the apparently costly EU models and badge them as lincolns in the same vein? How many luxury small city cars are there out there on the roads in USA? Tidy little runaround luxury (with safety) for the lady of the house? ledderatalincoln!

  • avatar

    Do they have enough time and resources to git er done? I doubt it. Even if they do the right thing and ditch Aston, Land Rover, Jaguar, Mercury and Mazda (yes, Mazda), they may not have the money or mojo to fix Lincoln and Ford.

    Robert, I assume you do not have any formal business education, or much familiarity with state and federal auto dealership franchising or labor laws.

    Your sell the furniture/ditch the brands armchair CEO advice for both Ford and GM would do nothing but ensure a very quick trip to Chapter 11, rather than a slow trip or a fighting chance at survival outside of bankruptcy court. GM learned their lesson with the $2 billion dealer buyout, plus a loss of several percentage points of market share Oldsmobile debacle. Apparently you weren’t paying attention to that one.

    And for the guy who thinks niche brands like Volvo and Mazda will save Ford, I couldn’t stop laughing. Auto enthusiasts don’t seem to realize that high performance cars and niche brands pay very few bills. Toyota is exhibit A in this respect, the brand enthusiasts love to hate is on its way to #1 on the planet.

  • avatar

    Pumpkin orange is awesome.

  • avatar

    Another thought on the subject of “bring some European product to the US . . . everybody else does it“.

    This is a perfect example of how the excessive costs of health care and retirements hurt GM and Ford.

    Why do you think Ford cost-reduced the Focus to death in the US while taking the EU version in the right direction? I’m sure many here would automatically assume it’s because of stupidity. Well, in fact it’s to try and create a viable business case . . . every Focus sold here has that darn $1200 monkey on it’s back. Whatever profit a Focus makes in Europe, you can be sure that it’s lower in the US from the get-go because of the ‘cultural’ differences I mentioned, i.e., because of gas prices, regulation, etc, small cars are considered more ‘up market’ and thus sell for more in Europe. When you add in the monkey, these same vehicles will lose a ton here . . . so they have to be cost-reduced or they just can’t be sold. And we know that they must be sold here for CAFE reasons.

    This is a case where the pure financial disadvantage caused by hc and legacy prevent the domestics from doing something that the imports do . . . it’s not poor engineering, or bad management, or willful stupidity . . . it’s just financial reality. The cost of doing this is just unaffordable for the domestics with their current cost structure. The imports, however, can afford it. This sux, but it’s reality.

  • avatar

    Five point eight BILLION dollars lost in one quarter of a year, the third quarter of 2006. Ford death watch #13, indeed!

    The new company president says it’ll be worse over the next quarter than this.

    So the company lost $3.08 per share this quarter alone.

    I just looked at Bloomberg and the stock price for Ford is $7.87, down 14 cents today.

    39% of the stock value evaporates in 3 months with another 3 months of equally bad said to be ahead, and the doors are still open and lights are still on?

    Clearly, someone is delusional if they think this can go on.

    Tick, tick, tick. The clock is ticking.

    My figures may be out but I calculated about $64.4 MILLION LOST PER DAY for Ford. (figured over 90 days)

    Ford “spelled sideways” is DORF. Apparently, not for long.

  • avatar

    I agree with your analysis and your categorization. You are quite correct.

  • avatar

    Glenn, you’re mixing the operating losses with the ‘extraordinary’ losses. 80% of the loss this quarter was in restructuring costs.

    Not that $1+ billion loss is anything to brag about . . . but it’s not as bad as you’re making it out to be.

    I’m also confused about your ‘39% stock value gone in 30 days’ calculation. That implies a base price of $12.90 per share . . . Ford stock hasn’t been at that level since about March of 2005. Again, a 40% drop in 19 months is bad news, but not as bad as you’re saying.

    You should doublecheck your figures . . .

  • avatar

    $7.87 per share (down 14 cents yesterday, at least at the moment I looked) / $3.08 per share loss = 39% of the equivalent value of each share lost in 90 days, Al-Pharazon. What I was trying to say is that it is a SIGNIFICANT loss, and the new Ford CEO from Boeing said it would be “worse next quarter”. Unknown whether he meant operational losses or total losses with more write-downs, he did not specifiy. But it would have been difficult to write-down the Taurus’s Atlanta plant and workforce because it still is producing until some time this week, just for one example.

  • avatar

    Ahhh . . . I get it now. I just never heard of that particular analysis before. Present value, future value, etc etc says that the market values the loss at 14 cents versus the share price of $8.01, so a ‘conventional’ measure would still only peg it at a 1.7% drop in shareholder equity.

    The company has already stated they won’t be back profitable until 2009. Per-share loss was pretty much right on analysts expectations. None of the white collar reductions have happened yet, so of course one-time charges will be big again next quarter, and they’ll extend into 2007 Q1 as well . . . and the CEO is acknowledging this. Yeah, none of this is great, but it’s not unexpected and not as gloom-and-doom as you want to make it.

  • avatar

    Another 2% market share loss as seen by Ford is significant in the sense that it is pretty much the entirety of what some automakers have for market share in the US.

    I don’t WANT Ford and GM to go “kaput”, but I am watching the ropes unravel, and I have this mental picture of two anvils on the end of the same ropes starting to look pretty much like it is going to come down pretty soon, right on top of Ford and also GM.

    I live in Michigan and so this is going to be a rather significant problem (to use rather a lot of understatement) for our state more so than other states, if Ford and GM both go down. As it is now, Michigan has the nation’s highest unemployement rate and is the only state in recession other than Louisiana, and their recession stems from a natural disaster.

    Ours stems from the disaster of GM, Ford and Chrysler (to a lesser extent) and the cascading problems and bankruptcies in hundreds of supplier companies, many of which are HQ’d in Michigan, such as C&A, Tower, Delphi, etc.

    At this point, I’d give GM a 50/50 chance of survival and Ford, only about 30/70. But that’s just my impressions as to how deeply in trouble they are, and looking at the big picture.

    I’d say a lot of other people agree. Hence, TTAC have both Ford Death Watch and GM Death Watch including a lot of readership.

    In the meanwhile, Honda is building a new car plant in Indiana, Kia is building a plant in the south, Toyota is adding production of the Camry at the newly part-owned Subaru plant in Lafayette, Indiana, etc.

    We may end up like the British. Plenty of car factories churning out mass produced cars, but none of them “British makes”.

    In fact, the loss of MG-Rover means a VERY big financial loss for the British Government in making up pensions, etc, BUT looking at the BIG picture, Britain’s economy is doing better than France which still have “French auto makers” – and the UK taxpayers have literally poured billions into a sink-hole since the early 1970’s by supporting British Leyland and subsequent companies, starting with nationalizing it.

    I’ll SHOCK everyone and say it may well be a better use of monies OVERALL to allow Ford and GM to go away, since they obviously are not “cutting the mustard” and are obviously not competitive. Partly, but not exclusively, down to the UAW and the Wagner act which was a good idea in the 1930’s but clearly puts the cart before the horse in the 21st century.

    Certainly, Wall Street seems to agree that GM and Ford are not top flight investments, to once again use high sarcasm and understatement. All Wall Street do is project numbers and determine the best place for investment, right? They’ve passed their judgement on Ford and GM, Delphi and Visteon.

    See for yourselves.

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