By on November 29, 2006

edgbe222.jpgTo combat the commonly held (if accurate) belief that FoMoCo’s product pipeline is drier than a Vermouth-free martini, FoMoCo recently unveiled the “Showroom of the Future.” Ford ushered retirees, clock punchers and white collar grunts into the Cobo Arena for a glimpse at what may (or may not) be the “most important new Ford.” While they weren’t invited to sample Ford’s four-wheeled corporate Kool-Aid, the Detroit News reported that the attendees were suitably impressed. It may not have been enough to take the edge off the Edge’s delayed debut, but it did reveal a bit more about Ford’s immediate prospects.

The headline: Ford will [finally] re-enter the US small car market with a 1.8-liter four-door, four-pot B-segment vehicle. Amongst the sixteen other vehicles on display, notable Hail Mary passes included the not-so-secret Fairlane people mover, an in-yer-face F-150 refresh and an Explorer designed to not explore. Oh yeah, and some [more] pimped-out ponies.

Under product czar Derrick Kuzak, Ford’s new “global system” will ensure that these still wrapped presents make it to market faster than before. While that’s not saying as much as was perhaps intended, the Zephyr-driving twenty-eight year Blue Oval veteran revealed that the accelerated go-go gadget car process relied on CEO Alan Mulally’s global approach. By “eliminating redundancies, complexity and waste” the new system is set to shave eight to 14 months from the current gestation period.

Yes, well, this new system won’t be in place until the end of 2008. So Mark Fields’ year old promise of a bitchin’ B-car will come to fruition under a new US Prez. In fact, the hit of Ford’s secret show won’t grace population-reduced production lines until 2009 or 2010. It seems that learning (from the past or otherwise) is a slow and painful process for Blue Oval brass. With three to four more years of sales, the Japanese (and maybe even homegrown) competition will again have achieved– or, more precisely, cemented– segment dominance.

No surprise there. The Japanese have a long history of finding and then dominating markets their competition can’t see. For example, the transplants invented the CUV because they A) they lacked viable truck frames to create “proper” Gaijin SUV’s and B) Japan’s too damn small for them anyway. By the time the SUV-reliant domestics set their sites on the crossover market, the transplants had built a virtually unassailable lead in the hottest “new” segment.

SUV refugees currently have four dozen mostly Japanese cute-utes to choose from. Many more are on their way. As this segment is hitting its stride, Ford’s current most important new vehicle is the crossover-come-lately (in more ways than one). As before, while FoMoCo worldwide is re-tooling to become one nation under Al’s groove, the market will look to Japan, Korea or even China for the next big thing and leave Ford even closer to the Edge of bankruptcy.

In fact, segment leadership is becoming increasingly important to overall profitability. With slowing growth in the U.S. economy and the pinch of a housing slump being felt in mega-markets like California, automakers seeking a product led turnaround face a distinctly uphill battle. A Michigan based market research firm called IRN figures that 2007 could be the worst year for new car sales in a decade. They predict that roughly 300k less units will leave dealer lots, as the haves have less.

To combat slumping market trends, Ford recently introduced a massive buyout program, which expired Monday night. According to this morning's papers, 35k United Auto Workers (UAW) have decided to take Mr. Bill's money and run. This is excellent news. Trimming half of the company's active UAW workforce will bring FoMoCo's payroll in line with existing demand– provided the workers don't change their mind before the programs kick-in, and Ford's domestic market share doesn't [continue to] sink below their goal of a sub-Toyota 14%. 

Of course, that's down from 25%. And the mass exodus is an incontrovertible sign of just how bad things are down in Dearborn. While the departed (including as many as 10k white collar workers) will relieve much of the ongoing pressure on Ford's bottom line, the payouts will add legacy costs and still put a big old minus sign on Ford's corporate ledger– and soon. 

To bolster for this mega-hit and pay for the new “global system,” Ford done gone and bet the farm, using anything that was (or wasn’t) nailed down as collateral for $18b in new financing. While the severity of “all-in” asset restructuring indicates just how serious Dearborn’s darlings are about this turnaround, it’s still a huge gamble. Robert Barry of Goldman Sachs reminds us that most of these newly borrowed bucks will be burned by the Way Fordward.

Even with $38b in hand, Mulally’s Global Overhaul may prove to be too costly for a company that’s consistently late to the game. It’s entirely possible that the Ford showroom of the future will be a very empty place indeed.

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66 Comments on “Ford Death Watch 18: Betting the Farm...”


  • avatar
    sleepingbear

    Is it my polluted thinking, or are the two misfits of detroit acting like thelma and louise ,jockeying for the backseat over the cliff- ie, 2nd to bk.

  • avatar

    …the hit of Ford’s secret show won’t grace population-reduced production lines until 2009 or 2010…. With three to four more years of sales, the Japanese (and maybe even homegrown) competition will again have achieved– or, more precisely, cemented– segment dominance. Not to mention the fact that by then (or shortly thereafter) the Chinese and Indian automakers will be mounting their assault on the cheap car/SUV market. Ford (and GM and Chrysler) can't repeat their usual performance and turn out something that's close to the class leaders then let it languish. They have to build cars that are the class leaders and do whatever they can to keep them there.

  • avatar
    Sid Vicious

    There’s no where to run anymore. No B segment car until almost the next decade? No mention of passenger car diesels in the works.

    Gas at $2.25/gal can’t last forever. The new Tundra will hurt at least some in terms of sales and profit margins. US sales looking to be in the low 16m next year. Ford is looking at a shrinking piece of a shrinking pie.

    Just saw photos of the “new” Escape from L.A. Looks to be mostly carryover metal and powertrains. Oh – but they’ve got new lights and instrument panels. This is really meant to compete with the CRV and RAV4? Are they serious?

    As mentioned, the number that signed up for the buyouts means little, as they can back out right up to the day they are assigned to leave. More uncertainty.

    Not good.

  • avatar
    1984

    the hit of Ford’s secret show won’t grace population-reduced production lines until 2009 or 2010…. With three to four more years of sales, the Japanese (and maybe even homegrown) competition will again have achieved– or, more precisely, cemented– segment dominance.

    You make it sound so easy… Just draw it up on a napkin and then call in the magic car fairy and poof! Ford just sh*ts out a car next month!

    If this car was even going to come out in 2007 they would have had to have been working on it since 2004… Not to say they shouldn’t have.

  • avatar

    Well exactly.

  • avatar

    This was sent to us by a Canadian reader: Excerpt from a Toronto Star article by Lawrence Yap, Sat Nov 26, 06 Results from the AJAC's (Automobile Journalists Association of Canada) annual mass testing session of new vehicles. "Best New SUV/CUV under $35,000 Ford's brightest hope in this year's competition was the new Edge crossover SUV, which was entered against eight other competitors in this class. Much to the surprise of some writers, it didn't even make the short list of finalists. It was beaten by the soon to be built in Ontario Toyota RAV4 V6 Sport." Oh dear.

  • avatar
    taxman100

    Ford has dominated the large RWD market for years – in fact in the mid 90’s, the Panther platform was making them $1 Billion a year in profits.

    So with this market dominance, what did Ford do? Absolutely nothing, unless you count starving their cash cow to death. I guess I have to be happy that they didn’t kill the platform when the horrid Five Hundred showed up as a “Fake Ford”.

    Unless there is a significantly updated Panther on the horizon, Ford has nothing that really interests me that you cannot get at a dozen other dealers in town.

    But what do I know – I’m only a repeat buyer of the Grand Marquis – the best vehicle Ford ever neglected – probably because they no longer have the talent on staff to create an updated one.

  • avatar

    It will take a long time before Chinese cars are an international threat. The hot-dog capitalism being practiced there runs entirely counter to the automotive safety and quality standards required to punch with the established brands internationally.

    I wouldn’t drive a Chinese made vehicle if you gave it to me – for some years yet.

    Here are the stat’s:

    77% of all cars manufactured in China have serious quality issues and problems during the first 6 months on the road.
    The number of complaints from Chinese owners re. quality of Chinese cars has shot up from last year.

    The Chinese market suffers from a too large number of manufacturers now (both national and international brands). This has resulted in a price-war, and has led to manufacturers cutting down on production time and cost with quality suffering.
    So far this year 100 different models have been launched in China — and though growth is near amazing the same cannot be said of the quality.

  • avatar
    jerry weber

    Now let’s see, I am to buy a new ford made of parts from bankrupt manufacturers that have been pared to the bone to meet ford’s price point. Now these substandard parts will be installed by green part time labor in the remaining ford plants. They will be building models newly redesigned by a staff of people who have left all the old models (sans mustang) go to seed. Why are hondas, toyotas better cars? Just one point, when Marysville Ohio opened up over 20 years ago, honda went shopping in the us for stampings and other parts for the american accord. The low bidder, sent the first batch of gas tanks to Ohio, and honda rejected every one. The mfg was stunned, he said they built the same quality gas tanks for the big three for years and were accepted (they were under the car and can’t be seen right). Honda wanted replication of their parts to be exact and workmanlike. This must be the way they built the entire accord. The resale value shows it.

  • avatar
    Sid Vicious

    Just because the Detroit News reports that “35,000 blue collar worker to leave” doesn’t make it true. This is the Detroit News we’re talking about.

    Ford hasn’t released numbers yet. Maybe 35,000 have signed up to leave. But they can back out before their final day, up until their final day. So Deutsche Bank or any other analyist can speculate but no one actually knows until contract time next year.

    I’m thinking that a lot of these guys are going to smell blood and hold out for more, especially now that they know that Ford just secured more funding for downsizing. What choice does Ford have but to accomodate them?

  • avatar
    guyincognito

    I heard that the new vehicles were mostly not impressive and included a decidedly hideous new grill for Lincoln.

    As for the B car, as 1984 alluded, it isn’t as simple as just builiding it, there also needs to be a design that would be competetive and meet regulations and a plant that can build it profitably.

  • avatar

    Robert don’t put too much faith in the AJAC after all they said the best luxury car you could buy over $35,000 was a Lexus ES350 and we know from the review here it is rubbish.

    Also, one thing that wasn’t mentioned here but has been mentioned elsewhere (autoblog perhaps) is that there were 0 mercury models being shown off at the “We really aren’t THAT screwed – honestly” show. So maybe there is hope that Ford will do something right after all.

  • avatar
    ash78

    B-segment, huh? Are they upgrading the Ka for the US?

    I could see a slightly stretched 4-door version of that thing doing okay if the US market can readily accept the notion of Ford building cute/quirky small cars. It seems a lot easier to grasp when Honda and Toyota do it. Though I see enough Aveos around that it might be possible, but then again, those customers might just be the tight budget/credit risk clientele with no other choice.

  • avatar
    SherbornSean

    Sid,
    AP is reporting that 38,000 Ford hourly workers have taken the buyout. That’s a lot of knowledge going out the door.

  • avatar

    They weren’t using that knowledge anyway. Earlier this month a Ford product development employee emailed me to say that the summary of my Ph.D. research, based on time spent within GM, perfectly described his company as well.

    http://www.truedelta.com/execsum.php

    Primary conclusion: these organizations’ personnel policies and processes result in poor use of their employees’ knowledge.

    To give credit where credit is due, Ford did get into the compact car-based SUV segment much earlier than GM and Chrysler (which just got in this year) with the 2001 Escape. The Escape outsold every competitor for many years after its intro, and even right now is a close second to the CR-V. Include the Mariner, and Ford still leads Honda in this segment by a wide margin. Include the Mazda Tribute, and the lead grows even wider.

    I’ll grant that given only mild updates the Escape is on borrowed time. But Ford was earlier than most to the party, and has led the segment since arriving.

  • avatar
    Glenn A.

    Robert, it’s time to start a Chrysler death watch, I think. Sadly.

    See for yourselves.

    http://www.autoextremist.com/page2.shtml#Rant

    And here

    http://www.freep.com/apps/pbcs.dll/article?AID=/20061129/BUSINESS01/611290327/1014

  • avatar
    starlightmica

    The upcoming B segment car is a cousin of the Fiesta and Mazda2 – good to finally see the international resources being leveraged. Too bad for FoMoCo that it had to come down to this, but that’s just auto company management at work.

    The 2.5’s brain drain is not good at all and has been ongoing for some time. After all, who do you think designed the new Tundra?

  • avatar
    starlightmica

    I wouldn’t drive a Chinese made vehicle if you gave it to me – for some years yet.

    Perhaps not from a Chinese company such as Chery, but we all know where those Equinox & Torrent engine components are coming from. Not to mention that Honda has started exporting the Jazz/Fit from China to the EU.

    Poor FoMoCo. It’s payback for decades of bad managment.

  • avatar

    Glen A:

    Frank Williams is on it.

  • avatar
    Sid Vicious

    Agree totally with the loss of experience regarding manufacturing personnel leaving. Unless you’ve lived it, you can’t imagine the chaos involved in trying to backfill all those positions in a hurry and simply maintain production – not to mention quality.

    Of course the labor contract complicates things incredibly. You can’t just move a new hired temp into any position – not for long anyway. Seniority rules above all else in the plant. There will have to be an untold number of moves involving bids (sign ups). Then seniority (plant vs. company?) has to be taken into account, as well as disciplinary history, etc. I don’t envy the HR people in those plants.

    So – every guy that leaves takes a little knowledge with him ie. “Shoot this screw first, give the part a little shove on the left side, then shoot the top screw, then the last screw.” Without a doubt build quality is going to suffer for awhile.

  • avatar

    RF
    The quotes are off on the TorStar article you posted in the comments.

    Just to clarify, the article states,

    “Best New SUV/CUV under $35,000

    Ford’s brightest hope in this year’s competition was the new Edge crossover SUV, which was entered against eight other competitors in this class. Much to the surprise of some writers, it didn’t even make the short list of finalists.

    In the end, the Toyota RAV4 V6 Sport, with its snarling hot-rod drivetrain and roomy, well-constructed interior won the day over two other Japanese entries, the four-cylinder Honda CR-V LX AWD and the turbocharged Mazda CX-7.

    The award, said Toyota Canada’s Stephen Beatty, would have “pride of place as we open our new (Ontario) RAV4 plant next year.”

    http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1164279188824&call_pageid=968867497088&col=969048871196

  • avatar
    Lichtronamo

    I’ve seen it in several reports re: the Showroom of the Future that the next Exlporer would be a CUV. What’s the point? If you have a rumored smaller than Escape CUV, the Escape, the Edge, the Fairlane and the Freestyle, why is another CUV necessary? Why is the Freestyle necessary for that matter? Ford needs to pair down the number of models it builds, not just the number of global platforms.

  • avatar
    Lumbergh21

    “I wouldn’t drive a Chinese made vehicle if you gave it to me – for some years yet.”

    Having restored one classic and started on a second, I have a little experience with Chinese build quality, as that is where most of the parts for these old cars come from. They are poor fitting, poor quality attempts at replicating the original parts. If the quality of these replacement parts is any indication, I can only imagine how bad an entire car made in this manner must be.

  • avatar
    Dunworth

    Even if they have designed a great vehicle – can they launch?

    In the Toronto Star this morning they said Ford has reassigned a bunch of the senior managers at the Oakville plant where the Edge/MKX are being built. Not good I think.

    Any ideas what the delays are?

  • avatar

    zzzzzz….

    …sorry, I find these “death watches” to always have huge gaps in the story. In this case, you’d think Ford was essentially not offering anything until the ’09 MY.

    Gosh, I hadn’t noticed the dealerships closing! You mean, Ford won’t have the F-series or E-series or Mustangs or CD3s or….

    *cough*

    I have an issue with modern automotive “experts”:

    Hacking on Ford for lack of “all new” product when the sales charts were largely dominated with vehicles a few years into their cycles. Hell, the Camry was a dead-last comparo finisher last year and still first in sales!

    So, if I have some faith that cars (with excellent reliablility and customer satisfaction) like the Five Hundred and Freestyle will benefit from their upcoming facelifts and power upgrades…it’s not without precedent.

    As for people getting all frothy for Toyota passing Ford’s sales…why? GM’s time at #1 was largely spent defining and producing mediocrity, while Toyota’s recalls are climbing in lock-step with their charge toward the top. In the meantime, Ford’s getting quality locked down (Fusion garnered happy quality ratings from all sides, including CR) and getting down to the right size.

    I’ll be the first to say it’s late in coming, but if I believed all the gloom-and-doom the auto press vomits toward the domestics…I’d have assumed they’d closed years ago.

    Can we have a TTAC “dumb watch”?

  • avatar
    TriBlack987S

    As a long time Ford (mostly truck) fan, I had awaited the new Edge and its siblings as a somewhat patriotic hope that the company would have a hit on its hands. Almost all the reviews I have read state the usual for Ford products…..”poor braking”. What do they not understand about a vehicle having the ability to stop. I have owned many, many vehicles, including a good number of German vehicles (currently both a Porsche and Mercedes in the garage) and find it inexcusable that Ford cannot seem to build a passenger vehicle with good brakes. On the contrary, my ’05 F250 4×4 Powerstroke stops very efficiently considering its 7k lb weight. Wake up Ford, if it’s not too late!

  • avatar
    sleepingbear

    zanary-
    wow,-
    Have you not ever played monopoly-

    when a few rolls of the dice force you into a cash squueze, right as you turn the corner to illinois,kentucy and indiana-

    then as you make it past that qtr, and another qtr , you realize at the end of year(boardwalkandparkplace) that you need to

    MORTGAGE ALL YOU”VE GOT

    to roll the dice again?

    five minutes with a group of 1st grade player’s , and they’d all come away with the fact that F is Phuggedddd.

  • avatar

    I’ve played Monopoly, and win about 90% of the time.

    Seriously, these “death watches”…the GM one has enough entries that it’s getting right up there with organizations celebrating 40 years of trying to unseat Castro! Congrats on constant…failure.

    Oops, sorry, that whole honesty thing is getting me in trouble again!

    I’ve seen no end of doom-and-gloom about the lack of a “B” car, but have any of these people noticed how small that market is? Granted, the leaked info from the Ford “peek” stated that the Dearborn offering is quite handsome and should be a hit…but did anyone notice the Fit, Yaris, and Aveo NOT surging to the top of the vehicle sales charts?

    “Look, a molehill…let’s see how big we can build it!”

  • avatar
    Eric Miller

    From Automotive News late this morning:

    Ford Motor Co. expects to go through $17 billion in cash during the next three calendar years, with more than half of that occurring in 2007. With the sale of Aston Martin and other divestitures they plan to recoup $4B.

    That results in a net cash burn of $13 billion through 2009. Ford said it expects to have $38 billion on hand by the end of this year, including $18 billion in new financing it is seeking now. Ford said by the end of 2009 it expects to have $25 billion on hand.

    Ford also said it expects an automotive operating-related cash outflow of about $3 billion in the fourth quarter of 2006, as well as restructuring-related cash expenditures of $500 million to $1 billion.

  • avatar
    yournamehere

    go try to find a fit to test drive. or an xB. or a yaris liftback….now go try to find a focus.

  • avatar
    HawaiiJim

    The next version of the Focus should tell us a lot about whether Ford can survive.

  • avatar
    yournamehere

    agreed. the next focus is the fork in the road between death and survival. will they be smart enough to give it a diesel?

  • avatar

    I can find a Yaris at my local NAPA stores…they’re getting some for delivery duty.

    The drivers I’ve spoken with are, shall we say, less than enthralled.

  • avatar
    yournamehere

    VW showed there new Tiguan concept. it comes with a Bluetec Diesel…atleast ford will have one year of good Edge sales cause when this comes out its going to kill everything else in the market. edge. rav4. mdx.

  • avatar

    Only if VW keeps their history of crap quality scores a secret.

  • avatar
    yournamehere

    Put the consumer reports down.

    https://www.thetruthaboutcars.com/?p=1719
    https://www.thetruthaboutcars.com/?p=1592

    People will buy this car simply because of the killer MPG.

  • avatar
    Eric Miller

    VW showed there new Tiguan concept. it comes with a Bluetec Diesel…atleast ford will have one year of good Edge sales cause when this comes out its going to kill everything else in the market. edge. rav4. mdx.

    The Bluetec diesel alone is not enough for VW to topple the vehicles you mentioned. And Tiguan isn’t intended to compete with Edge or MDX.

    It is a good looking vehicle though.

  • avatar
    yournamehere

    If VW prices this inline with the others in the class (which they should) the diesel option is going to put it over the “edge” so to speak. the concept is rather muscular and a good looking. the interior looks good also. when this is released next year (around this time) gas prices are not going to be so friendly as they are right now. 25mpg is not going to be good enough. Diesel is the future. not hybrid. not electric. Diesel is the answer until hydrogen is a viable option.

  • avatar
    SherbornSean

    Um, yourname here,
    The MDX is a $40-50K 7 seat luxury CUV with 300 horses and a sophisticated AWD drivetrain that puts it ahead of the 6 cylinder X5, XC90, RX330 and Cayenne with which it competes.

    I doubt Acura need concern itself about a Rabbit on stilts, even if it does come with orange wheels and tires.

    Also, by the time VW brings a small BlueTec to the US, Honda will already have a more sophisticated diesel that doesn’t need pee refills to clean up the emissions.

    The Tiguan will canibalize Tourag buyers who realize they don’t need to spend $50k for a 5 passenger SUV. Not clear on how this helps VW.

  • avatar
    yournamehere

    mdx = rdx. sorry.

    do escapes take away expolorer buyers?

  • avatar

    No, hurricanes take away Explorer buyers. So do complete updates with little to no effect of styling.

  • avatar
    Glenn A.

    The math doesn’t work, yournamehere. Re: diesels vs. hybrids, that is.

    Let’s “pretend” that VW can still sell a Jetta in the US, which it can’t, and compare it to a Civic Hybrid. Automatic transmission, since that is what about 95%+ of US buyers opt for.

    Real world mileage is approximately the same (let’s assume mixed driving with emphasis on highway). Car pricing is approximately the same.

    Diesel fuel costs $2.67 per gallon right now where I live, gasoline is $2.11.

    Now, let’s look at the reality of 2006. VW cannot sell diesels in the US because they don’t yet meet emissions. When they do, they’ll have to have pee canisters for urea to clean them up. VW “can’t” use Honda’s technology for diesels, “NIH” and all (“Not Invented Here” as in Germany).

    I am aware that no matter what some of us who prefer regaining wasted energy from slowing and stopping will say, there are some diesel-philes out there who think diesels are the end all and be all. Thus, I suspect this is why Honda are bringing their high-tech diesels to the US soon.

    But I’ll take a Prius or a Honda Civic Hybrid or a 2008 Honda FCX powered by home-brew hydrogen any day. (And, 30 or so years ago, I counted myself a diesel-phile – I’ve just gotten sick of the stench of supposedly cleaned-up diesel cars and trucks on the road around me, and was disgusted by the stench of fuelling a rented Vauxhall Zafira diesel with supposedly low-sulfur clean diesel in the UK while on holiday last year).

  • avatar
    gfen

    Sean:

    Which Toureg buyers are we talking about, coz I’m sure not seeing ’em line up at the door for a $40K or more VW SUV.

    Whereas, if they can price the Tig at half the rate of a Toureg, they’ll do well.

  • avatar
    yournamehere

    i dont know the realworld MPG of a civic hybrid. but my father has a Jetta TDI and regularly return +45mpg in mixed driven and on a highway trip gets 52mpg. the prius cant match that. not to mention the cost difference. im going to do some quick math here. assume the jetta get 50mpg and Car B gets 30mpg (which is pretty average for small cars) at your prices, an average year of 12,000 miles will cost the jetta $640 and $844 for Car B. at 100,000 miles the jetta cost $5,340. Car B cost $7,033. Thats at current prices. When gasoline goes back up to +$2.50 the difference will be even larger.

    the higher gas prices go the more diesel makes sence. and they will go back up, higher then before.

  • avatar
    SherbornSean

    We’re a little off topic, although I find discussions of the future fuel of automobiles more interesting than the unimpressive nature of the Edge. Maybe we will get a Gasoline Deathwatch series?

    Anyhow, if gas prices stay in the $2.50 range and automakers continue to improve their understanding of combustion, it is entirely plausible that diesel will take larger market shares, especially in pickups, large cars and peoplemovers. If you are spending $40K for a 2-3 ton machine, the extra expense of a diesel pays off at the pump.

    But I doubt we’ll see diesel take more than 20% of the market in the next decade. I think we will see a lot more electric vehicles — not hybrids, Glenn, pure electric. They may have only a 50 mile range, but so what, 99% of the time I only travel 40 miles; it would be the perfect third car for many families and a great city/commute car for singles.

    As the technology for producing bio-ethanol improves, we may well see E85 used in another 20% of vehicles. Given that half the senate is made up of senators from farm states and the primaries start in Iowa, there will always be strong governmental support for ethanol, and it works quite well in Brazil.

    If you follow the new Hydrogen powered vehicles GM and Honda are focused on, that could be a real alternative, but I imagine we are a decade away. Haven’t we been “a decade away” from Hydrogen for 30 years now? What seems cool about the Honda system is that you could fuel up at home by converting natural gas to hydrogen, and even use your car as a backup generator powering your house!

    And of course there remains gasoline, which will around for the least expensive and for used cars for decades to come. It would be an interesting world if a fifth of cars ran on E85, a fifth on (bio-)diesel, a fifth on electricity, a fifth on hydrogen and a fifth on dino-juice. Then we’d have real choice in the marketplace, rather than G6 vs. Malibu vs. Aura vs. 9-3.

  • avatar
    SherbornSean

    gfen and yournamehere,
    I don’t mean to slam the Tigger. I actually like it, and if VW can do a TDI for $25K I think they will do well. But I think they will get their sales from new buyers and traditional VW lovers, rather than CR-V and RAV4 loyalists. They might move 40K per annum if priced right.

  • avatar
    Gotta Chime In

    Wow, we’ve gotten way off topic. I thought this article was about Ford making its last set of bold moves in an attempt to stave off Ch. 11? Save the mileage comments for the pertinent car review forums.

    Michael Karesh – how much of those Escape/Tribute sales went to fleet customers? Also, with the invention of the CUV term, those Fords don’t compete with Asian CUVs of their day except for size, which was all that mattered then. Until you test drove both. My posterior knows the difference.

  • avatar

    From Automotive News

    Ford forecasts $17 billion cash outflow from 2007-09

    Amy Wilson

    DETROIT — Ford Motor Co. expects to go through $17 billion in cash during the next three calendar years, with more than half of that occurring in 2007.

    The cash outflow primarily will be the result of substantial operating losses in Ford Motor’s automotive operations through 2008 and cash expenditures related to employee departures. Ford detailed the expected financial results in a regulatory filing today.

    Ford said it also expects automotive cash inflows of about $4 billion in the 2007-2009 time period. That reflects the use of $3 billion in long-term VEBA assets, proceeds from the receipt of government tax refunds and affiliate tax payments, and proceeds from planned divestitures of its Aston Martin and Automobile Protection Corp. units, offset partially by pension contributions.

    That results in a net cash burn of $13 billion through 2009. Ford said it expects to have $38 billion on hand by the end of this year, including $18 billion in new financing it is seeking now. Ford said by the end of 2009 it expects to have $25 billion on hand.

    Ford also said it expects an automotive operating-related cash outflow of about $3 billion in the fourth quarter of 2006, as well as restructuring-related cash expenditures of $500 million to $1 billion.

    Beginning in 2007, Ford Motor Credit Co. is expected to suspend regular dividend payments. The company also said Ford Motor earnings will deteriorate in 2007 primarily because of lower earnings at Ford Credit and higher interest costs associated with a higher level of debt at Ford.

    Ford said it expects Ford Credit’s profitability in 2008 and 2009 to improve from 2007 levels.

    The disclosures were contained in a presentation Ford Motor made today to prospective lenders and investors. Ford said Monday, Nov. 27, that it is seeking an $18 billion financing package. Ford intends to use its plants, office buildings and other automotive assets as collateral to secure $15 billion of the financing.

    Ford also said it expects to continue to invest about $7 billion annually in new products through 2009. That’s about the same level of product-related investment as the past few years.

  • avatar
    yournamehere

    there really isnt much left to be said about GM and Ford. they messed up. now we have to hurry up and wait to see what happens. thats about it.

  • avatar
    Glenn A.

    I think the mileage equasion came into the discussion because someone started saying how Ford needed to bring out diesel cars. SherbornSean, I have to agree with you and in fact, I have been saying for quite awhile that the era of “one solution” (for motor fuels) is over, or soon will be.

    I’d LOVE to get a purely electric car as a commuter – IF the range is adequate (I would rather see 150 mile range not 50 mile), the price is competitive and I can use the car in northern Michigan without freezing to death or reducing the range to 20 miles if I turn the heat on… also the car must be larger than the SMART car because I’m literally surrounded by people who think that a 5000 pound Steamroller Ugly Vehicle is the ONLY vehicle choice in the north.

  • avatar
    Glenn A.

    I have to give you the actual figures I’ve found, yournamehere, re: the hybrid vs. diesel discussion.

    2006 Jetta TDI MSRP $17,900 to $24,865 (and we can safely assume an automatic costing a minimum of $19,000). 45 mpg at $2.67/gal., 15k mpy = $890 for fuel.

    2006 Honda Civic Hybrid MSRP $22,000 (minus $2100 Fed. tax relief = $19,900). 47 mpg at $2.11/gal., 15k mpy = $673 for fuel. We won’t even add the tax relief available from many states.

    That means about a 4 year “payback” for the Civic owner, 2 years under the typical new car loan timeframe.

    That’s not even taking into account the higher cost of the new clean diesel cars, nor the cost of the urea fill-up at every oil change for the VW Jetta of 2008.

    Now, with regards to FORD, hybrids and diesels, I think Bill Ford had a great idea and good start with the Escape hybrid, then went ahead and stopped running at first base!

    Ford, had they introduced a full-hybrid Five Hundred and Fusion, would have had great competition to the other good mileage cars out there in the hurricane season of 2005 through the great gas-gouge of summer 2006, and surely would not be near bankruptcy now.

    Of course, if Ford could aFORD to they could do a Honda and do hybrids AND diesel AND compressed natural gas cars, but of course, they’re still standing there on 1st base holding their [email protected] wondering why the other teams are cleaning their clock.

  • avatar
    Jim H

    Darn you all! Now all I can think of with that Ford grill is a tri-bladed razor!

  • avatar
    jerseydevil

    i dunno what ford is gonna do.

    after having a honda hybrid in the family, i can say that i am impressed. In the city it gets great milage.
    Not alot of people around here seem to care about milage, tho. Even when the prices were high, people seemed to jackrabbit the lights, a major gas waster.

    I never owned a diesel, but my mechanic has a 10 yr old jetta that he loves.

    And apparantly mariner hybrids, which i like, are sitting on dealer lots for like 75 days (not good). If i needed such a vehicle I would consider that one.

    also, americans dont seem to like diesels, so i dont see the point of banking on them.

  • avatar
    jthorner

    It amazes me how short the memory of the automotive and business press is. Ford has been pushing the World Car Concept for decades now. The Escort was to be the first example of a new way of doing business in which Ford products were engineering for sale worldwide in a fit of organizational efficiency. Then there was the massive Ford 2000 re-organization which again was supposed to usher in the era of high speed globalized development. The European Mondeo/US Contour were to be the examples of the new globalized Ford. When will the silly season end? Ford has had an endless string of Corporate Initiatives with cool sounding names, or horrible names like Way Forward. Yet nobody is doing the big stuff which needs doing. The brands are a shambles. The “Premium Auto Group” global effort has been a complete cluster ____ . What exactly do Volvo, Jaguar, Land Rover and once upon a time Lincoln have in common?

    Bold Moves

    American Innovation

    Death by Slogans!

  • avatar
    HawaiiJim

    jerseydevil: Lots of folks living within the city limits may not worry much about fuel efficiency because they drive very few miles. If I move downtown near my job I could be driving as little as 20 miles a week, about 1000 miles a year of work related travel. A car that gets great city mileage is even less important then; I may be more interested in a car that gets good mileage on the highway for occasional trips into the country. And I might be willing to pay a premium for a car that softens city potholes and blocks out city noise.

  • avatar
    sam

    Good to see Ford now betting the whole company. It means the day it closes down down for good is almost at hand. After the junk Ford and GM sold me and my family in the 80’s – all I can say is both companies deserve to die.

    Thank God for the imports otherwise I would still be sitting on the side of the road waiting for tow trucks. I tell everyone I know who is even considering a Ford or GM all my horror stories (including one car catching on fire on the highway).

    Remember – Friends don’t let friends buy Ford or GM.

  • avatar
    Jim H

    I’ve often wondered how much different the economy in the U.S. would be if we had incredibly efficient, powerful yet refined, and unmarked reliable cars that we all dream of.

    What would happen if we didn’t need or even desire a new car every 3-5 years? My Ford Escort (granted it’s entry level) only lasted 4 years and 80K miles before I was completely over it. I’m a fairly patient guy…but once the speed limits went up in TX and CO, I knew I’d have to get a new car to enjoy driving at those speeds.

    I was lucky to pick an Acura TL (dream car, long story)…and the thing was still phenominal at over 7 years old and 151K miles. But in one way, it affected the economy…no major mechanical problems, never needed to be towed (except after an accident in the ice…another long story), and I certainly didn’t have to buy a new car in that timeframe. The icing on the cake? I still got 29 miles a gallon when I sold it!

    Where are these cars in American cars? I know they are there…I just haven’t been able to find them. Very few folks will even point you in the direction of an american car when you say you’d like to own it for at least 10 years of 150K miles (whichever comes first).

  • avatar
    jerseydevil

    HawaiiJim:

    the civic hybrid gets about 50 mpg (observed) on the highway. But its in the city that its wonderous. about 35-40 mpg (observed). My 4 cyl golf gets about 27 in mixed city driving. And im gentle with it.

  • avatar
    XK150

    Ash78 – don’t knock the Ka. Mine has never failed to deliver 40 mpg in city driving, and I thrash it like it’s a CooperS. Sure it’s underpowered, but the chassis is so good you don’t need to slow down for corners.

    And please don’t compare my well-designed and engineered European car with a re-badged Daewoo deathtrap!

  • avatar
    geeber

    JimH: My Ford Escort (granted it’s entry level) only lasted 4 years and 80K miles before I was completely over it.

    That’s interesting, because my father had a 1986.5 Escort Pony that went well over 100,000 miles, and he did next-to-nothing to maintain it. My aunt had a series of Escorts – starting with a 1987 model – that went well over 100,000 miles without any major problems. A friend’s 1989 Escort also traveled that far, although his air conditioning compressor conked out at about 70,000 miles.

    The problem I see with Fords is uneven quality. For every reliable Ranger or Crown Victoria or Escort, there was a Windstar or Taurus saddled with the awful 3.8 V-6 that was guaranteed to blow a head gasket at around 50,000 miles. The automatic trannies in those vehicles used to grenade with distressing regularity at about 50,000 miles as well.

    Ford has made tremendous strides in reliability over the past five years – there haven’t been any major problems with the Five Hundred, Freestyle, Fusion or Mustang – but the ghosts of Fords past still haunt the company.

  • avatar
    Schmu

    the escort used to be the only reliable car ford had. so they killed it. The focus is now a good car, but it took more than 3 years of sales and ticking everyone off before they worked all the bugs out of it. I love the fusion, but wont drive a foriegn built car if i have something made in America to choose from (company ownership irrelevant) (choices that i want, not settle with). Mustang sells whether its crap or not, but i like it (leaning towards the camaro when it comes out though). I have seen 6 500’s since they came out (outside of lots). They are way too boring. My opinion? Seems to be everyone’s. Freestyle is ok, it just doesnt seem to be on top of everyone’s minds in that segment like it should. my family is one of many burned in the 80’s by their crap, but i do not rule them out based on history alone. Fusion was the first i had considered to buy in a long time, but i have no love for Mexican built cars. Like many here, I don’t know how Ford and GM can remain large players without totally gutting management and ridiculous union rules. social promotion is no longer acceptable in school, and it shouldn’t be in a manufacturing environment either.

  • avatar
    wsn

    Replying to
    It will take a long time before Chinese cars are an international threat. The hot-dog capitalism being practiced there runs entirely counter to the automotive safety and quality standards required to punch with the established brands internationally.

    The Chinese products for export are totally different from their domestic consumption products. Just look at your American market brand names, such as Hush Puppie shoes or Braun shavers that are produced in China. They are as good as anything else (in the same price segment).

  • avatar
    Ar-Pharazon

    sam .. .

    So you’re admitting that you’re closed minded and don’t bother to even consider anything that’s happened in the last 20 years. But you think that makes you smart. I think it’d be funny if it wasn’t so pathetic. You probably think you’re ‘progressive’ because of your views, too.

    And I get posts deleted for being insulting and for not contributing anything meaningful to the conversation? Why don’t you delete this guy’s post for lowering the IQ of everyone who reads it? Or do you consider that to be valuable, insightful commentary?

  • avatar
    dhathewa

    Schmu, when JimH said he was “over’ his Escort in 4 years, I understood that to mean he was tired of driving it, possibly because it had also started to look like a well-used car.

    If so, I understand what he’s saying. I had an ’82 Cavalier that gave pretty good service over 10 years as my daily driver. I sold it in ’92, not because there was anything wrong with it but largely because the interior plastics were turning to powder (UV attacked them, I suppose), so it was starting to look crappy and I was just sick of driving it. It was mostly rust-free (goo for an ’82-era, in fact) but it was starting to look like a sh!tbox, nonetheless.

    Ten years to get to that point, though, is pretty good and if the interior plastics had held up better, I probably could have persuaded myself to continue driving a paid-for car for a few more years.

    The cars I’m driving now are 6 to 8 model years old (I bought 3 out of 4 used) and all but one look new (hard use but good mechanicals). Unless they start to degrade pretty rapidly, I’ll probably be happy to keep driving them for a considerable while longer.

    Unless I get the green light to buy the Miata, that is.

  • avatar
    rtz

    Ford Edge: Too expensive. At almost $30k or more it’s just too much. Now if they were selling these for ~$12k….

    What’s this vehicle do for me? What’s it got and why do I want one?

    Is it fast? Get good mileage? Have any special features? Is something new about it?

    Or is it just a restyled, underpowered, 4WD minivan?

    Can I get a diesel engine? Hybrid? Full blown electric or even hydrogen? A high performance model? Does it get good fuel mileage for next years hurricane season when gas goes back to $3 plus? Does this thing run on E85?

    What could make an Edge be more fun? Airbag suspension? Supercharged, or turbocharged? Take that Shelby motor and make the Edge rear wheel drive. Cause right now, that Edge just does nothing for me. I get to work and back just fine with what I got and my ’80’s Stang for ludicrous speed.

  • avatar
    Jim H

    Thanks dhathewa…I didn’t relay that as clearly as I should have. Geeber…that’s is truely what I meant…the car still ran fine at slower speeds. The plastics did start looking quite old…even the brake light covers, etc. looked very aged for a car just 4 years old.

    Don’t get me wrong, I was very glad to have a my first new car…and it got me from A to B pretty well. But comparing it to my aunt and uncles civic dx, my car looked and felt much older and with many more miles than theirs. Seeing that theirs was 6 years old with 101K miles, I was a bit discouraged. :( The blue sparkly paint was awesome though. :) Pretty easy to spot my car in the parking lot.

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