Ford's CEO: U.S. Car Market Heading for Recovery

Robert Farago
by Robert Farago
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ford s ceo u s car market heading for recovery

What's the bet that Ford has a whole room full of MBA's who do nothing more than scan the tea leaves of the U.S. economy and powerpoint their prognostications to the Powers That Be? If so, you gotta be a little worried, 'cause Ford CEO Alan Mulally doesn't seem to be. Despite the ongoing slide in American home values (a.k.a. the mortgage crisis) the soaring price of oil (cresting $86 a barrel) and the current downturn in new car sales ('07 looks to be the slowest year since '98), Reuters reports that Big Al sees 2008 U.S. light vehicle sales between 16.3 million and 16.5 million units. In fact, "We've laid out our plans to handle that kind of volume." Yes, well, however theoretical, a rising tide doesn't lift all boats. As Reuters points out, Ford has lost roughly one percent market share per year since the turn of the century, and is set to shut 16 plants and cut more than 50k jobs. Here's hoping The Blue Oval Boyz know something we don't.

Robert Farago
Robert Farago

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  • Kevin Kevin on Oct 16, 2007

    So Robert, why exactly are you bashing him? This year looks to come in at 16.1 or 16.2 million. So Mulaly's statement would imply a stagnate 1% growth next year. That is not at all unreasonable, it is very conservative -- that would in fact be a disappointing year by historical standards, wouldn't it? It's not difficult to imagine a true bounceback of much greater magnitude, if you want to get all crazy. In fact Mulally must've hacked onto my laptop, because my spreadsheet says roughly 16,350,000 next year, and that bit of prognostication actually is one of the things I get paid to do. (Except sorry, I don't have an MBA).

  • RobertSD RobertSD on Oct 16, 2007

    Well, if the market stays flat to slightly up with the Flex, Fusion, F-150, MKS, MKZ, Milan and updated powertrains in the Escape, Ford's not going to be doing that bad throughout the year. I'm confident that Mulally understands the industyr and his company far better than anyone who posts on this board or is associated with this website. Just because he is CEO of Ford does not mean he has turned into Jac Nasser. Check your stats on the remaining job cuts Ford has to do. They don't have another 50,000 workers to let go because they've already dismissed 40,000 of them this year.

  • Kevin Kevin on Oct 16, 2007

    By the way there's an interesting aspect to these declining cars sales. There are two components to the market: a growing component and a shrinking component. The growing segment, for 2006, included Toyota, Honda, and most Asian companies (except Nissan) and the European independents. The shrinking segment included mainly Detroit and Nissan. In 2006, the growing segment was 33.3% of the pie, and the shrinking segment was 66.7%. (Almost exactly 1/3 vs. 2/3, oddly). This year, the players are the same but the growers are bigger, and Nissan has rejoined the growing group. Thru 9 months of 2007, the growing component is 43.6% of the market; the shrinking component is 56.4%. Get it? Capisce?. The growing piece of the pie is rapidly getting bigger and the shrinking piece of the pie is quickly getting smaller. At this rate, a year from now the growing part of the market might even be the majority part of the market.

  • Terry Parkhurst Terry Parkhurst on Oct 17, 2007

    The market for credit is so shakey a cabal of banks have to come together to ensure that it stays relatively stable, oil hits about $87 (USD) a barrel and gold has gone up $100 an ounce since the start of September (and seems poised to go even higher as the dollars and the Canadian Looney, go head-to-head). In this market, at this time, Alan Mulally thinks Ford and the American car market are going to come roaring back? For the sake of the beleaguered American worker, would that it were true. From my far-from-scientific research, it seems that the only reason anyone considers shopping a Ford store, right now, is because they figure they can get a bargain (at invoice, at least, and probably below that). At key points in Ford's history, and in America's history, the company that Henry Ford founded came back with product that broke from the ranks and expressed what people wanted. 75 years ago, it was the "Deuce" coupe and roadster. In 1949, it was the "shoebox" Ford. In spring of 1964, it was the Mustang. In 1981, it was the five-liter Mustang, followed four years later, by the first generation Taurus. The Lincoln TownCar of 1990 was a home run. And then, there really wasn't much to crow about until the Mustang of 2005. What Ford needs is a car - not a truck, not a SUV, not a crossover, but a car - that has everyone 18 to 45 years of age, talking about owning, and those who can, signing a contract to do just that. I think they can do it, but time is running out on the clock.