By on January 24, 2008

766304628_49d9e444b5.jpgAlan Mulally began last year as a passenger on a nose-diving Ford Motor Company. Clocking the company’s $12.6b fiscal flummox, FoMoCo’s CEO left no punches unpulled. "We fully recognize our business reality,” Big Al pronounced. “And we’re dealing with it.” Twelve months later, Mulally’s machine’s cut a new deal with the United Auto Workers (UAW), scaled back production and launched some new whips. During today’s announcement, Big Al proudly pronounced the new new turnaround a success. “Each of our automotive operations is improving, and we are encouraged by the progress.” That makes one of us.

The bulk of the Blue Oval Boyz blues arrived in the fourth quarter. Over the year’s final frame, the automaker posted a net loss of $2.8b, racking-up a $2.7b loss for the year. NorAm came-up $1.6b short, bringing the worldwide sector down $1.1b on the year. Special items took their share of the FoMoCo fortunes ($3.9b YTD). All that red ink leaves FoMoCo’s corporate coffers with $34.6b in begged and borrowed cash and cash equivalents (including VEBA assets).

Some of those bucks will (again) head off for blue collar buyouts. As reported by TTAC, Ford is (again) sweetening the deals and asking all hands on deck to abandon ship. In an effort to “help ensure we are able to deliver our commitments despite the difficult external environment,” Mulally is trimming fat (again) and (again) putting product development on the front burner, serving-up a new Verve and yet another version of Ford’s never-say-die Taurus/Five Hundred/Taurus. 

On the year, excluding special items, the Blue Oval Boyz generated just shy of $174b in revenues, an increase of $13.8b over last year’s total. Doing so while moving 12% less metal, in the current economic climate, indicates that Mulally’s minions might have made good on their promises to stop strapping [as much] cash to the hoods of moribund metal. It also leads one to believe that Ford is keeping its promise to trim low-profit, residual-killing fleet sales; reportedly down 18 percent.

As always, the devil is in the details. While U.S. retailers were able to scale back rebates in the fall, Canadians were cashing in on exchange rate induced bonus bucks. This occurred while the Loonie was soaring at unheard of heights. Therefore, the trend was more costly overall to the bottom line greenbacks. 

Also, a closer inspection of FoMoCo’s fleet reveals that Edge buyers may soon feel snubbed. Yours truly was aghast at the site of Ford’s last next big thing (in full Limited trim) on a rental lot. While sampling some of Ford’s finest wares at an airport near you may help brand awareness, flooding used car lots with ex-renters never yields positive results.

The Blue Oval moved 2.57m units (down 350k) in 2006. Ford floggers attributed more than two thirds of those declining sales to discontinued models.  What kept 3600 dealers (400 less than last year!) afloat: the new cross-border crossovers (Ford Edge and Lincoln MKX) and (believe it or not) the fresh faced Focus. 

Ford’s Edge bested predictions by 30 percent (130k units)– although Ford doesn't say how many of these vehicles ended-up in the aforementioned fleets. The Focus did nine points better after its launch, but it could well be one of the “rising tide lifts all B-segment boats” deals, heading  for a dead car bounce.

Meanwhile, what was once high margin full-size pickup truck paradise, Bloomberg reports that Ford is losing the battle on hallowed ground, in Texas.  According to market research firm R.L. Polk & Co, ToMoCo’s Tundra market share skyrocketed 79 percent in the Lone Star State, while the domestics shrank by five percent. The trend is truly, madly, deeply worrying, especially as Texan Ford dealer Sam Pack reports that Tundra sales “are coming from traditionally Ford buyers."

Heading into ’08, the Glass House Gang figures total U.S. new car sales will continue to slip to around 16 million vehicles, and shrink their piece of the pie right along with it. Ford’s (once again) revised market share target is now set at the “low end of 14 to 15 percent.” This translates into about 2.3m new FoMoCo products hitting America’s highways and byways in the year ahead. In the current and predicted economic climate, based on previous years’ precedence, moving the metal is going to get a lot harder before it doesn’t.

Bottom line: profits aren’t on the horizon. As Dearborn continues to “right size” its operations, its transplanted competitors are already there. No wonder Ford’s stock price is only slightly better than January ninth’s 22-year low. While there’s no question that posting a year-on-year improvement resembling Paraguay’s GDP ($9.9b) is nothing to sneeze at; that the gain still leaves a net loss more than twice the size of Belize’s GDP ($2.7b) is. 

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67 Comments on “Ford Death Watch 41: Time to Bail...”


  • avatar
    Steven Lang

    To paraphrase the words of former President Clinton, “Everything he’s written, I’ve inhaled.”

  • avatar
    starlightmica

    So, how much is Volvo worth? $5-6 billion up front plus hundreds of millions less per year in product investment, advertising, etc?

  • avatar
    umterp85

    Matthew: You have done a good job covering the “small picture”….improvement but a long way to go

    Ford’s “big picture” (read: long term sustainability) will be determined in 24-36 months. I think Mulally is making most of the right moves to get there—and will continue to do so as long as he keeps looking through those “clear glasses” and the cash position holds.

    BTW—from what I saw on my little trip to Detroit for the auto show–the new F150 will have no problem keeping its current owners….it looked great.

  • avatar
    gamper

    The next 2-4 years will see an almost unrecognizable Ford product lineup. Gone will be the ancient fleet only models, in will be new models with ecoboost, perhaps a hybrid option. Verve, Fusion, Taurus, Focus, Escape, Explorer replacement, Flex, MKS, MKT, Transit and the list goes on. By the time Ford’s current stable is replaced, if profits arent back on the table, then I will be ready agree that Ford should be on death watch. But I suspect that Ford, as well as GM will be on a product led resurgence in the next decade. Time will tell, until then this “deathwatch” is just internet fodder.

  • avatar
    Landcrusher

    Losing traditional buyers in Texas is a really serious blow to Ford. I know the kind of people who they are losing as customers. They didn’t leave easily, and they won’t come back the minute Ford has a much better product. It will take a good while for the common wisdom to work it’s way back to their favor.

    I may be mistaken, but I believe they and Dodge are the only ones not making their trucks in Texas now.

  • avatar
    Lichtronamo

    The question really becomes whether Ford has the time to get those new products to market where they must be a success. For a company where the F-150 is the franchise, the reports that the housing/construction industry will stay recessed until 2009 at the EARLIEST is great cause for concern.

  • avatar
    AndyR

    Hi Matthew,

    Thanks for the update on 4th Quarter reporting… I’m glad to know the semi-ugly refresh of the Focus isn’t going completely to waste. A quick request:

    When calling on regional statistics to support a trend (like the loss of Ford market share for full-size pickups in Texas), could you please make an effort to put the data in the larger context of nation-wide or world-wide sales? It seems a safe assumption to me that Texas buys a lot of trucks, but without quantifying it, the claims of the F-150’s downfall sound pretty propagandistic. Can you shed any light?

    (This would also apply to the claims of B-Segment gains vs. the Focus…)

  • avatar
    starlightmica

    AndyR:

    Ford F-series sales from their year-end report, down -13.7%:
    2007 690,589
    2006 796,039

    Dodge Ram -2%
    2007 358,295
    2006 364,177

    Toyota Tundra +57.4%
    2007 196,555
    2006 124,508

    Chevrolet Silverado -2.8%
    2007 618,257
    2006 636,069

    GMC Sierra -1.2%
    2007 208,243
    2006 210,736

    Nissan Titan -9.2%
    2007 65,746
    2006 72,192

    Total pickup sales -3%
    2007 2.135m
    2006 2.202m

  • avatar
    RobertSD

    I will answer what I know of the Edge fleet question. This exact question was asked about every month from April through September on the sales call and got the same response “a hundred or so” virtually every month. October was a big month for the Edge in rental fleets supposedly with the MY changeover, but I don’t know the total number (you can’t abandon all those sales, either), November was down again and December was up slightly over November.

    Pipas said on one call, and it may have been the October call, that Ford was targeting certain percentages for fleet, but that random months would have large fluctuations, basically. He didn’t specify, but on the December call, Ford overall was 13% rental for the year, and it was insinuated that the Edge was lower than that overall.

    I’d say they’re keeping their promise overall. And supposedly they are reducing more in 2008.

  • avatar
    theflyersfan

    Landcrusher – if I’m reading your post correctly, Nissan builds their large trucks in the quality hellhole called their Mississippi factory.
    Somewhere in Ford HQ, the ghost of the original and “real” Taurus is laughing at them while saying how stupid and short-sighted they were for years of neglect. More power to Ford if they actually pull this off…

  • avatar

    RobertSD: One aspect that’s never mentioned: fleet sales made through local dealers. The manufacturer don’t report these as fleet sales, even though they bloody well are. Also, our spies report that Ford’s Mazda unit has gone mental in this part of the biz. Florida rental lots are lousy with 3’s and 5’s. Perhaps Ford’s switching fleet sales over to Mazda to keep the money “in the family.”

  • avatar
    rtz

    Say for example that every year Ford posts a “net loss of $2.8b”. How many years at that rate can they stay in business? Given their current product line up and everything they have in the works; I don’t see them ever turning a profit. Dull, lackluster offerings. Zero excitement, zero reason to buy. Do they offer me the best deal? The best price? The best resale? The best reliability? The best fuel economy? The best performance?

    They don’t seem to understand that they need to offer something. A compelling reason to buy. They need to take every vehicle they make and make it excel at something. Pick something from the list and make it do that. Take the competitions vehicles and make Fords version of it beat it in some way. Anyway.

    Nothing stands out about the Ford Fusion. The AWD was an unexpected oddity. If that car isn’t competing with the Subaru WRX(the only group of car buyers that cares about their car being 4WD), then why bother. Everyone I’ve seen driving a Fusion likely couldn’t care less about it being AWD or not. Can we have 50mpg from a Ford Fusion? High performance? A hybrid that gets better mileage then the Prius? How about full blown electric that gets insane performance, range, and at a price that everyone would be a fool to buy some inferior gas powered vehicle instead?

    If you can’t compete in the gasoline market place(performance or mileage), it would seem prudent to leave it.

    I saw a Black Ford Fusion at the light the other day. I thought “man that would be a sweet little car if had rear wheel drive, a V8, and 2 doors”.

    See the problem is the Fusions target market drives Civics, Accords, and Camrys. Those drivers say “hell no I’m not taking a chance with that piece of crap Ford that will break down just like my old Taurus used to.” The Fusion would have to be outright cheaper for people to even start taking a chance with it. Even then, that might not be enough. It needs to win on fuel mileage or performance. Right now, it’s the same or less, or not enough to matter. How does that sell Ford?

    In 1974, Ford lots all of it’s gumption and it’s grandiosity. What happened to you Ford?

    Ford Flex is not fun and exciting and won’t change the marketplace and won’t save the company. It’s a Scion xB of different proportions. Look at xB sales. Likely will be similar to Flex. Flex is aimed to be over priced to the extreme. Just like Edge. Way to expensive. Do they still make the Focus? Dumbest thing ever to have a superior desirable version of the Focus that’s only sold in Europe and continue to try and pawn off the inferior 1999 model in the states. So it’s cheaper to make two models of the same car huh? The people working at Ford these days… Maybe it’s all the bureaucracy and no one wanting to step on any toes and to speak out could be a career ender. Better to go with the flow then cause any ripples.

    The problem is making the same cars(mistakes) every year with no change. 2008 is exactly like 2007 and `06, and `05 as far as Ford is concerned and how things are at Ford and what they offer. 2009 is already the same. If Ford is still in business in 2010, they will still be making the same old 2008 and 2009 models. If it ain’t selling today, it ain’t going to sell tomorrow. Drastic changes are needed at Ford. Midyear model changes across the board. Shake it up or lose the chance. Ford has the cruise control set and the chartered curse is aimed directly at failure. Allen Mulally has the autopilot turned on because he already got paid and is waiting to be CEO of another company. The man does not care about the fate of Ford.

    If Ford stays on it’s current course; it has no chance.

  • avatar
    P71_CrownVic

    What I find interesting is that the Verve (what a horrible name), is getting a phenomenal response…and the response from Ford is “you can buy it in 1.5 years”. Great…thats how you sell cars.

    Also, is there any way for someone to find out what models are profitable? I would venture to guess that, even at fleet prices, the Ford Crown Vic STILL makes Ford money, while the Taurus/Sable flops are nowhere near profitability yet. In fact, I would be surprised if Ford has made all of their money back on the 500/Montego cars yet.

  • avatar
    Landcrusher

    flyersfan,

    You lost me. Nissan is a small player over all, I was only thinking of the top players. From what I understand, Texas is a HUGE percent of the overall market for trucks. Toyota was brilliant to build a factory here because they got a lot of buzz, and they get to save on transporting the trucks. Ford ended up left out.

    I don’t think anyone at Ford should be laughing about anyone elses problems right now.

  • avatar
    RobertSD

    RF – It’s true that dealers sell to fleets and don’t always classify them as such (dealers *do* in fact report some fleet sales), but rarely will a dealer sell anything to a car rental company in any significant number. Even when aggregated for all the sales, the total to rental firms is small.

    Most dealer fleet sales are to commercial or government agencies. This happens with Toyota, Honda, Nissan, et al. Ford has made no efforts to trim that part of their business as long as the revenues/unit are solid. Cars sold into that usage are also usually very used by the time they enter the used car market or sold to a closed group of consumers and therefore don’t affect residuals.

    I stand by my analysis of the Edge. There is no reason (or compelling evidence) to suspect that Ford’s rental sales are out of whack. And 13% puts them far below their domestic competitors and several Asian competitors (Kia, Hyundai). As they say, one observation does not a trend make.

  • avatar

    I remain a Ford optimist. They’re in the doldrums now, but of the majors Ford probably also had the greatest inefficiencies to be gotten rid of.

    In contrast to GM, Mulally actually has a plan. Check out AN today:
    http://www.autonews.com/apps/pbcs.dll/article?AID=/20080124/ANA02/625680840/1200

  • avatar
    Dynamic88

    rtz

    I disagree about the AWD option on Fusion. I find it a very appealing feture. I’m not the least bit interested in a Subaru WRX, but I could see myself driving a Fusion (Or Taurus) with the AWD option. I have a problem with it being made in Mexico, but that’s another issue altogether.

    As for making Fusion RWD with a V8, well, it wouldn’t appeal to me at all. Don’t need a V8 with gas at $3.00/ gal, and the competition doesn’t offer a V8 either, so why do it ? As for RWD, I don’t care what Cops and Pistonheads say, FWD is superior in snow and that matters where I live. I’m not going to be choosing between Camcord and Fusion on the basis of minimizing torque steer.

  • avatar
    starlightmica

    Dynamic88:

    In a softening economy, will consumers pay the extra up front and ongoing (in mpg) to get AWD? Does anyone know the AWD take rate on the Fusi/lan/MKZ?

    About Ford’s Hermosillo, Mexico plant: their build quality has previously been rated near or tops of all Ford’s NA plants, and the profit margin coming out of a plant that pays $30/day instead of $30/hour must be substantial. That’s one way to support Ford – buy Mexican, Mullaly & co get more dough that way.

  • avatar
    jdv

    “…yet another version of Ford’s never-say-die Taurus/Five Hundred/Taurus. ”

    Isn’t it a frequent critisizm that the domestics abandon models, constantly go for the home run, and haven’t learned to tweak their way towards greatness? Sometimes it seems they are damned if they do, and damned if they don’t.

  • avatar

    jdv:

    Isn’t it a frequent critisizm that the domestics abandon models, constantly go for the home run, and haven’t learned to tweak their way towards greatness? Sometimes it seems they are damned if they do, and damned if they don’t.

    In this case, that’s exactly right.

  • avatar
    geeber

    Stein X Leikanger: I remain a Ford optimist. They’re in the doldrums now, but of the majors Ford probably also had the greatest inefficiencies to be gotten rid of.

    Ford also seems to be the one domestic automaker that is implementing a consistent method to improve vehicle reliability that has actually produced results across its product lineup.

  • avatar
    whatdoiknow1

    In a Nutshell:

    When you have something good you hold on to it and nuture it.

    Ford had the number one car in the NA market for quite a long time. Ford negeleted a very important franchise and is paying for it dearly today.

    Very simple! Easy to understand!

    Now I love all this talk about 24 to 36 month turn around time. You folks have got to be kidding me! If you guys believe that Ford or GM can FIX 3 decades worth neglete within 2 to 3 years you are in for a very SAD future.

    Face facts the party is over, Shareholders, managemant, and the UAW have extracted all but the last drops of blood out of these companies.
    What is left is a outmoded business model THAT DOES NOT WORK ANYMORE!

  • avatar
    jthorner

    I would bet a lot of money that there are more Toyota Camrys in the daily rental fleets than there are Edges. The problem with rental fleet sales only happens when they are too large a portion of the manufacturers business and/or when the cars are clearly made inferior/cheap in order to win fleet business. Other than that, having a consistent large volume market to sell a fluctuating but small fraction of the factory output to makes a lot of sense.

    Ford is at least doing the right thing in focusing it’s efforts on fewer brands.

    Now when exactly is the Transit supposed to come to the US?

  • avatar
    Dynamic88

    “In a softening economy, will consumers pay the extra up front and ongoing (in mpg) to get AWD? Does anyone know the AWD take rate on the Fusi/lan/MKZ?”

    I’m guessing yes. I’m thinking a lot of people driving PUs and SUVs with 4wd will change to a car with AWD and realize better mileage than they were getting. I notice Matrix/Vibe is bringing back the AWD option – must be some demand for it.

    “About Ford’s Hermosillo, Mexico plant: their build quality has previously been rated near or tops of all Ford’s NA plants, and the profit margin coming out of a plant that pays $30/day instead of $30/hour must be substantial. That’s one way to support Ford – buy Mexican, Mullaly & co get more dough that way.”

    I’m interested in supporting the American economy in general, not Ford in particular. What’s good for Ford isn’t necessarily good for the USA. Keep America working – buy a Honda.

  • avatar
    M1EK

    The Focus we get here isn’t horrible. Not like the Cobalt and whatever replaced the Neon, anyways. A coworker friend of mine got one on his last visit here a week or so ago, and it wasn’t bad – if it was cheap enough, I’d actually consider one for a 16-year-old or something.

    But as for the rental fleets – I have NEVER, not even once, seen a Camry for rent. Corollas, once or twice. But never a Camry. People are deluding themselves or FUDding the rest of us when they try to pass off BS like that claim that Toyota rents a lot of cars too; it’s just not true.

  • avatar
    plee

    Actually, Hertz for one has a large fleet of Corollas and Camrys. The Corollas are as bland a car as I have ever driven, I refused the last one when offered it. The Camrys are LE 4 cylinder, the last one I rented had horrible rattles, a strange automatic transmission shift quality, and front suspension noise, like worn ball joints or something. I am amazed that this car gets such good press.

  • avatar
    shiney

    I live on the west coast, and rental fleets here are full of Toyotas – mostly 4cyl Camrys & Highlanders.

  • avatar
    Landcrusher

    I always love these discussions about kinds of cars that some people think are unwanted, yet sell in the tens of thousands if not hundreds of thousands.

    No, if you live in a place where ice on the road is rare, then AWD is likely not worth it. If you live in a place without flooding or large rocks in the road, you don’t likely value extra clearance. If you are single and live a block from the grocery store rather than an hour, then a Smart car is plenty roomy.

    Strangely though, everyone is not like you, and every place is not like where you live.

  • avatar
    RobertSD

    M1EK –

    Earlier this year, fleet-central published its rental/retail numbers for Oct 2006 – March 2007. In it, it was revealed that the Corolla was 15% rental fleet over that time period. The Highlander was over 20% rental. The Avalon was nearly 15%. The Rav4 was over 10%. The 4Runner was nearly 15%. The Camry was over 5% rental.

    Generally, Toyota’s %fleet mix increased in 2007, and although I have no break-down of rental/non-rental, even if the ratio remained the same – 70/30 or so – 1-point of Toyota’s 3-points of growth this year was directly related to rental fleet sales – that’s about 25,000 units more into rental fleets.

    No, Toyota doesn’t have the rental exposure of say, Ford, but its rental exposure grew approximately 30% last year while Ford’s shrunk about 30%.

  • avatar
    Orian

    I’ve always enjoyed the AWD/4WD thing – it has some advantages but on an icy road you’re in the same boat as your FWD/RWD car owners – weeeeeeeee.

    Mullaly at least has a plan and is sticking to it – that bodes well for Ford. Their product line on the other hand does not. The clock is ticking and they need to do something – the Focus is probably the worst of its class right now and that should never have happened.

    Ford also has a black eye in the reliability and refusal to recall things when they are identified to correct them. The fires in the trucks and the fuel tank issue in the Panthers are two glaring issues right now, not to mention all of the ignition pieces that would cause a Ford car or truck to stall with no warning that was finally recalled 10 years after the fact and covered 10 years or so of models.

  • avatar
    umterp85

    Dynamic88: “I’m interested in supporting the American economy in general, not Ford in particular. What’s good for Ford isn’t necessarily good for the USA. Keep America working – buy a Honda

    Well…if you want to keep America working you may also want to consider the Chicago built Taurus (which has AWD unlike any Honda sedan) or the Kansas City built Mailbu….or the plethera of other highly competitive domestic vehicles like the Lansing built Cadillac CTS.

  • avatar
    starlightmica

    Landcrusher :
    I always love these discussions about kinds of cars that some people think are unwanted, yet sell in the tens of thousands if not hundreds of thousands.

    How is it that everyone got around in the 1950s-1970’s in RWD sedans, and now AWD CUVs, and SUVs are now mandatory? They’re not – it’s CAFE loopholes for trucks and clever marketing, a want but not a need. I drove RWD cars for the 15 years up until last year-round, with snow tires.

  • avatar
    Rday

    Well Ford and GM have some excellent new cars. I hope that they can garner enough sales to stay in business and finish the turnaround. For some people these new models make alot of sense. However, I am a died in the wool Toyota or Honda fan. With all of the years of problems I had with Detroit, I will not be buying Detroit anytime soon. Unfortunately for Detroit, there are many americans that feel the same way i do. Sad but now that they are building better products, do many people even care???

  • avatar
    Pch101

    Also, is there any way for someone to find out what models are profitable? I would venture to guess that, even at fleet prices, the Ford Crown Vic STILL makes Ford money, while the Taurus/Sable flops are nowhere near profitability yet.

    The R&D (what R&D?), tooling, etc. were amortized a long time ago, so sure, it’s probably a profitable car on paper.

    But aside from the low sales volumes, here’s the problem with your beloved dinosaur — it’s a brand killer. The Crown Vic represents everything that is wrong with US vehicle design — too big, too clunky, too backward-looking, and too unworldly, primitive and free of any finesse to assure the public that Detroit takes its customers seriously.

    In the scheme of things, the Germans have distinguished themselves with brand cachet and driving dynamics, and the best among the Japanese have advanced their status with reliability. In contrast, the French, Italian mass market cars and English sports cars were driven out of the US market because they offered nothing particularly special that was positive, with a few noteworthy negatives.

    The Crown Vic tells the buying public that the US isn’t doing much better than the English, French and Italians were when they were here, sending the message that Americans are also-rans resting on their withered laurels.

    Many Americans may not want evolution in their schools, but they sure as hell want to see it in their cars. The last thing that an American company needs is to tout a product that screams out that they are stuck in the ’70’s. Thank God that Ford killed off what was already dead.

  • avatar
    KixStart

    starlightmica: “How is it that everyone got around in the 1950s-1970’s in RWD sedans, and now AWD CUVs, and SUVs are now mandatory?”

    Hey, when the going gets tough, the tough put on tire chains.

    After a snowfall around here, the ditch has plenty of AWD/4WD vehicles in it. It seems like all that people ever get out of AWD/4WD is false confidence.

    We make a few long trips during snow season every year in our FWD or RWD cars. If the weather seems a little too bad to be safe (like snowing AND dark), we stop and check into a hotel, preferably with an indoor pool. Total bill for that over the last 15 years is probably about $200 (3 incidents, two with pool, one without). The purchase price difference between a Fusion and an AWD Fusion appears to be about $1900. And I’m pretty sure we were actually safer sleeping in a hotel for 10% of the price differential than we would have been driving through the blizzard in an AWD vehicle.

  • avatar
    speedlaw

    I had a Taurus Wagon my last rental in the midwest. It screamed of lost opportunity. Every conceviable gadget was in the car, but then another engineering team must have gone through the car to cheapen it at every turn. I’m sure 1000 dollars at the factory level could have made this thing almost Audi-like. The engine (not the top tier) was anemic, but I was trying to cross the Continental Divide (many thousands of feet-thin air).

    It was the right size, the design didn’t totally suck, and if A) the seats were decent-not rocket science, and b)they’d spent some money on the interior and c) someone from SVT worked lunch hour on the suspension, it might d) be a credible attempt at the non fleet market.

    Contrasted with my last rental in Montana, an Infiniti Q35, it hurt. (an infiniti rental, montana, a 280 hp V-6…life was gooood)

  • avatar
    eb

    I attended the Washington (DC) Auto show yesterday and came away concluding Ford is doomed. In the Lincoln exhibit they were hyping a new Lincoln mk…something or other. When I first spotted the car on the podium I thought it was a VW Passat or Infiniti M. There is nothing distinctive about the Lincoln product line. Whatever you thoughts about Cadillac design, you can at least see brand identity in the vehicles. If this is the best Ford designers can do the future is not bright.

  • avatar
    starlightmica

    Pch101 :
    Many Americans may not want evolution in their schools, but they sure as hell want to see it in their car.

    KixStart :
    Hey, when the going gets tough, the tough put on tire chains.

    Oh, yeah, chains – forgot about those, and tire studs. All this technology removes all traces from my mind of cheap and practical solutions. There’s something to be said about for your unorthodox hotel vs. optional AWD analysis, too.

  • avatar
    Landcrusher

    Starlight,

    Having had little experience with driving in snow and ice until a few years ago, I can tell you a couple things.

    AWD is better. SUV’s are better.

    Moving to Calgary and Denver let me learn these things. Many of the locals got by for years without these things, but in Denver the subaru is king. My neighbors were all very grateful when I took out my Landcrusher and packed the snow on the street and in front of their houses so they could have a parking spot they could get in and out of or get their car unstuck. What did they do before? More shoveling, more days off, more people freezing to death, more people dying in accidents.

    Yes, lot’s of people have no “need” of these things because they live where conditions do not merit them. Yes CAFE made the SUV much more popular. No, that does not mean that there is no added value or safety in AWD or SUV’s.

    Sorry, your argument is not valid. People lived for centuries without antibiotics, too. Corn ethanol is not a bad thing just because the government pushes it down our throats. It is a good oxygenate for gasoline, even if it isn’t a great plan for use as an alternative fuel.

  • avatar
    KixStart

    PCH101: “Many Americans may not want evolution in their schools, but they sure as hell want to see it in their cars.”

    LOL. We want Intelligent Design in our cars, too.

    starlightmica, I don’t think of that sort of analysis as unorthodox. Many people buy cars for the worst case scenario without really considering the cost of the worst case scenario and its alternatives. A less capable vehicle is usually considerably less money. What are the realistic alternatives to AWD, a pickup, an SUV or a vehicle that seats 8? Could you get by staying home on a day when it’s dangerous to drive? Using a trailer hitch? Occasionally taking a second car to an event? Periodically renting something? Spending the $50 once in a while for home delivery (which includes the additional benefit of two burly gentlemen who carry the washer and dryer into the basement for you)?

    Thinking my AWD cost-benefit through a bit further, in 15 years we actually bought three cars. So we’re talking about $5400 or so saved. After adjusting for the emergency hotel bills (and throw in a few meals, if you like), you’re left with enough money for a trip by plane to Disneyworld. Or, in our case, freshman year at a branch of UW.

    But this kind of analysis meets resistance even at my house. I’m ready to dump the minivan. While it was not overkill when we bought it (we have four children), it’s no longer really necessary. My wife objects, “But what if we all want to go somewhere together?”

    I can’t imagine what she’s thinking; three of our children are grown and out and live nowhere near us and the fourth has just entered college and isn’t keen to be seen in public with us, anyway. The probability we’ll all go somewhere together in the minivan seems to me to be vanishingloy small. Never mind that two could and probably would rather pay for their own plane fares and meet us at the destination.

    So, the van’s still in the garage. Well, it IS paid for, so why not? But replace it with another? I hope not.

    Landcrusher, you packed down the snow in front of people’s houses? With an SUV? You turned easily shoveled snow into what amounts to intransigent ice?

    Here in MN, what you pack down into ice sticks with you until April. We shovel and the well-heeled neighbors use a snowblower or a plow service. We get by.

    Having grown up with ice and snow (learned to drive in ME during a really choice winter), I can tell you that RWD or FWD is all you need, if you know what you’re doing and make sensible choices. Neither AWD nor SUV reduces your stopping distance when there’s no traction and the speed that AWD helps you achieve suddenly becomes a liability.

  • avatar
    Landcrusher

    Tire chains and cars in ditches.

    First, ditches. AWD does not do a heck of a lot to help you stop or stay on the road if you drive beyond the abilities of yourself or your car. That does not make it a bad thing. Given any new tool, some of us will hurt ourselves with it. If you think ditches full of AWD cars proves AWD is bad, ditch your power tools as well.

    There is no feature we can put on a car that is more costly than trying to teach the wisdom to stop at a hotel when we ought. If we could teach everyone that, then the world would be a whole different place. AWD is a a couple thousand dollars, wisdom is priceless.

    Tire chains. Simple, cheap to use, often rationalized as not needed (ending in a crash), incredibly expensive to clean up after (the roads are not free to maintain). I will take AWD and snow tires to avoid needing the chains as much as possible. We carried them anyway in the mountains.

  • avatar
    umterp85

    eb: “There is nothing distinctive about the Lincoln product line.”

    Well—the Lincoln line is distinctive enough to have increased sales +9% in 2007. Not everyone wants to announce themselves when they enter a parking lot like you do with the Caddy design. Remember—Mulally drove Lexus before he took the helm @ Ford. He is clearly trying to make Lincoln more Lexus-like vs. Caddy-like. I happen to see nothing wrong with the strategy.

    Last, I happen to like the MKS I saw in Detroit (would like it much better with the ’62 continental grill ala the MKX) and think it will add 15-20K incremental retail sales to Lincoln during the 1/2 year it will be available in 2008 and 30-40K annually.

  • avatar
    Stephan Wilkinson

    It’s obvious that a lot of the posters expertising about AWD/FWD advantages/disadvantages are flatlanders, which means most of the U. S., including what’s typically called The Snowbelt from east of the Rockies to west of the Alleghenies.

    Those of us who really do use four driven wheels do it to go up hills and mountains (both, in my case), typically to get home.

    To drive on an Interstate across Kansas in a blizzard I could do okay with a RWD car on no-seasons; I’d just have to be cautious. To get back home from the local post office and the gym, I seriously need my Volvo’s and Audi’s four driven wheels and dedicated snow tires, otherwise I’m walkin’. And the Porsche has show tires too, plus “chains” (which in the 21st century are actually stainless-steel cables).

  • avatar
    starlightmica

    Stephan, Landcrusher:

    Yes, I’m a lifelong East Coaster with several winters in the Northeast but having moved to the DC area. Consider my perspective, uh, the opposite of warped.

  • avatar
    KixStart

    Stephan, well, that’s the thing. If I lived in the Rockies, I might have a different perspective. The Yukaburbahoes and various and sundry other AWD/4WD vehicles that I see every day here in not-quite-Flatland certainly don’t spend much time climbing the Rockies. The Rockies are a thousand miles away.

    The Appalachians extend through Maine. The terrain isn’t as vertically challenging as Western Colorado but there’s some fair hills (and a crapload of snow). We had RWDs without even limited slip and we got around OK.

    Landcrusher, that’s the problem. People get AWD instead of wisdom. AWD is not a satisfactory substitute.

    And people get false confidence from it. That IS bad. And if slip is reduced on takeoff, they might not realize they have a traction problem. That is bad.

    Power tools are different. Yes, they go through lumber faster but to the untrained eye, they certainly don’t look intrinsically safer than regular hand tools.

  • avatar
    Steven Lang

    I can see where AWD would be useful in some of the very rural and more mountainous areas of the country.

    But heck, how many of us truly live in the midst of 25+ degree grades and several feet of snow with nary a snowplow in site?

    Maybe 1% of the population???

    But then again…. who cares? One of the things that seriously ticks me off is this Pavlovian need to justify our ‘irrational’ desires. As if there’s some type of nanny police or gold star giving teacher that we so desperately need to please just to make sure our purchases are ‘good’.

    As I look at my driveway, I currently see a gas swilling 350 V8, a European 3.5L V8 that drinks even more gas than the 350 (oh the horrors!!!), a 4WD vehicle that Consumer Reports would probably blow up if they had the chance, and a Saab. Oh well nobody’s perfect ;)

    Do I really have to justify to anybody why I own all this crap? Does the driver who is the supposed idiot have to justify why he bought an AWD vehicle?

    I really think the folks who get a false confidence from AWD are an extreme minority. There are far more out there who get a false sense of confidence through their cell phones, Ipods, CD players, GPS’s, and their own inflated efficacies than those few shmucks that try to play speed racer in a blizzard.

  • avatar
    Stephan Wilkinson

    I don’t own cellphone. But I do need AWD to get up my quarter-mile-long driveway, and I live in New York, not even Colorado. I don’t have to justify anything, but it’s a pain in the ass to have to walk home, uphill, when you can see the kitchen lights.

  • avatar
    ZoomZoom

    Landcrusher wrote:

    “Corn ethanol is not a bad thing just because the government pushes it down our throats. It is a good oxygenate for gasoline, even if it isn’t a great plan for use as an alternative fuel.”

    I’m not sure it’s even a good plan for an “oxygenate,” because a 10% mix of that stuff is costing me fuel economy on my latest tank of gas. Normally in the 45-48 MPG range, I seem to be barely getting 40 to 42 on this tank of gas.

    So help me out with some quick math here…a 10% mix of it saved me about 15 cents per gallon, or roughly 5% of the cost of “regular” gas.

    But according to my car’s computer, my mileage is suffering by about 13%! At an average of 420 miles per tank, that means I’ll have to stop about 55 miles SOONER for gas.

    The way I figured it, I saved $1.35 on my tank of gas, but I’ve lost over a gallon of gas’s worth of work, or about $3.00 .

    And of course, that doesn’t include the unknown amount of taxes I pay to support the corn subsidies or the indirect costs needed to feed the giant sow of government.

  • avatar
    M1EK

    “Do I really have to justify to anybody why I own all this crap?”

    No, but the US automakers use you as evidence that everybody wants and needs that crap when they go get their exemptions and loopholes from CAFE and emissions regulations.

  • avatar
    Landcrusher

    “No, but the US automakers use you as evidence that everybody wants and needs that crap when they go get their exemptions and loopholes from CAFE and emissions regulations.”

    As they ought.

    The market has decided that those things are desirable. Government should be loathe to disagree, and do so only with much hesitation. A fuel tax is the only reasonably fair way to discourage people from buying the capabilities they don’t need while still allowing those who really need them (and those who REALLY want them) to get them.

    This is the point where we argue about the gas tax. Then I point out that environmentalism and “social justice” (the legislation of economic outcome) are not compatible and wonder how long the Dems have before they implode like the Republicans have.

  • avatar
    M1EK

    The market has decided that those things are desirable.

    No, GM and Ford and Chrysler decided they needed a set of loopholes to make these things artificially MORE desirable than they would otherwise have been if treated fairly.

  • avatar
    P71_CrownVic

    fuel tank issue in the Panthers are two glaring issues right now

    The Panthers do not have a fuel tank issue. The Panthers are the ONLY cars subjected to a 75MPH rear end collision with NO FIRES.

  • avatar
    P71_CrownVic

    The R&D (what R&D?), tooling, etc. were amortized a long time ago, so sure, it’s probably a profitable car on paper.

    But aside from the low sales volumes, here’s the problem with your beloved dinosaur — it’s a brand killer. The Crown Vic represents everything that is wrong with US vehicle design — too big, too clunky, too backward-looking, and too unworldly, primitive and free of any finesse to assure the public that Detroit takes its customers seriously.

    In the scheme of things, the Germans have distinguished themselves with brand cachet and driving dynamics, and the best among the Japanese have advanced their status with reliability. In contrast, the French, Italian mass market cars and English sports cars were driven out of the US market because they offered nothing particularly special that was positive, with a few noteworthy negatives.

    The Crown Vic tells the buying public that the US isn’t doing much better than the English, French and Italians were when they were here, sending the message that Americans are also-rans resting on their withered laurels.

    Many Americans may not want evolution in their schools, but they sure as hell want to see it in their cars. The last thing that an American company needs is to tout a product that screams out that they are stuck in the ’70’s. Thank God that Ford killed off what was already dead.

    If they were really that bad, 80% of our police agencies wouldn’t drive them.
    And last I checked, the Panthers STILL outsell the Taurus and Sable…at a PROFIT. There is no way that the new Taurus and Sable are profitable yet as they haven’t sold any cars.

  • avatar
    Landcrusher

    M1EK,

    Could we get some reference or source to back that up? I am quite sure that both SUV’s and 4WD predate CAFE. Some of the best selling vehicles in history were 4wd SUV’s. Long before CAFE.

    If you know of some lobbyist activity to get loopholes that would predate the Eisenhower adminstration, I would be fascinated to read about it.

    Also, I am unaware of any current loophole for AWD at all. Not saying there are not any, but I just don’t know about them.

  • avatar
    Landcrusher

    I am going to have to side with the pro panther crowd here. Ford should continue to make something in this class.

    I do not believe it is a brand killer, but if it were, then they could just avoid any cost to their brands by only making the Mercury version. Can’t kill a dead brand.

  • avatar
    stuntnun

    ford death watch? id predict the demise of vw ,Mercedes before ford—ford losses are from restructuring of the company . i do think ford made junk or just ugly cars about 5 years ago(new focus still looks like junk to me)but a lot of models have improved in every thing and they’ve cut the fat from the company. i hope they cut rover and jaguar from the company and just use mazda and volvo to cross develop new platforms .

  • avatar
    Pch101

    If they [Crown Victorias] were really that bad, 80% of our police agencies wouldn’t drive them.

    If handcuffs and questionable moustaches were prerequisites for vehicle ownership, then I’d suppose you’d have a point.

    But the average American consumer does not have the requirements of your average US police department. Ford is already doomed to the dreaded fleet department, the Crown Vic just helped to seal up that coffin.

    And last I checked, the Panthers STILL outsell the Taurus and Sable…at a PROFIT.

    That would be a useful benchmark if rental cars were benchmarks in this class. But they aren’t.

    Detroit can’t pull itself out of its quagmire if it only benchmarks its own failures. It has to target the winners and beat them. Even when the winners are built by pesky foreigners, which they usually are.

  • avatar
    KixStart

    Landcrusher: “I do not believe it [Panther] is a brand killer, but if it were, then they could just avoid any cost to their brands by only making the Mercury version. Can’t kill a dead brand.”

    Too funny. And too true.

    However, one of the overlooked possibilities of the Panther is leveraging its cachet as a police vehicle. Correct me if I’m wrong, my understanding is that people can’t go to the Ford dealer and request a CV “police” edition. Why not? It’s not like the CV police car is the fastest thing on the road; it’s easy enough to buy (or mod) something faster. If people could go to Ford and request a CV “police,” maybe they’d sell a few more.

    I’d think the civilian version would offer leather instead of the heavy-duty barf-resistant vinyl but maybe not.

    Package it up as “The Ford Interceptor” or something. This certainly wouldn’t cost all that much to do.

  • avatar
    geeber

    Pch101: But aside from the low sales volumes, here’s the problem with your beloved dinosaur — it’s a brand killer. The Crown Vic represents everything that is wrong with US vehicle design — too big, too clunky, too backward-looking, and too unworldly, primitive and free of any finesse to assure the public that Detroit takes its customers seriously.

    Ford knows this…at the Washington, D.C. Auto Show, there were no Crown Victorias at the Ford display. The lone Mercury Grand Marquis was parked BEHIND the temporary wall at the Mercury display, so that it was not immediately visible, and clearly separated from the other Mercurys!

    I also noted that the Fusion seemed to be better assembled than the all-new, highly touted “North American Car of the Year,” the Chevrolet Malibu (which, quite frankly, was a disappointment in the flesh).

    Ford also had the production-ready Flex at both the Washington, D.C., and Harrisburg auto shows. I think it looks great, and is just what Ford needs – a handsome vehicle that stands out from both the import and domestic competition. It also offers buyers an alternative to the SUV.

    Judging by the reaction of the crowds, it is a polarizing design – one man at the D.C. show compared it to the Edsel – but at this point, offering a Camry or Highlander with a blue oval attached to the front isn’t the way out of the woods…

  • avatar
    M1EK

    “I am quite sure that both SUV’s and 4WD predate CAFE. Some of the best selling vehicles in history were 4wd SUV’s. Long before CAFE.”

    CAFE had a huge impact on SUVs. The fact that half of all vehicles sold in recent years were “light trucks” should tell you that. Nice attempt to move the goalposts though; I NEVER claimed that there weren’t ANY SUVs before CAFE; only that CAFE made them artificially attractive, leading to a drastic increase in demand.

  • avatar
    Landcrusher

    M1EK,

    When you began your sentence with the word “no”. You directly contradicted my quote. If what you meant was not to contradict my statement, you should have left off the word “no”. Also, we when you used “these things” you should have been more specific so as not to include AWD.

    Do you see where we got tangled up there?

  • avatar
    Landcrusher

    ZoomZoom,

    Sorry, I just saw your post, didn’t mean to ignore you.

    The need for an oxygenate is created to meet pollution restrictions. The refiners stopped fighting this requirement due to apparent agreement with the government that the benefit is worth the cost. The previous ingredient has gotten all the refiners in HUGE lawsuits even though at the time they put it in the fuel it was the only ingredient known to meet government regulations.

    The state of California has been using joint and several liability, combined with some seriously questionable tactics to basically hold the larger refiners up for HUGE piles of cash. Specifically, they have gone after players who have deep pockets, were a small fraction of the problem, but did not grease the right pockets. Next time you are upset about your fuel bill, yell towards the west.

    In the meantime, ethanol is the oxygenate of choice.

  • avatar
    geeber

    M1EK: CAFE had a huge impact on SUVs. The fact that half of all vehicles sold in recent years were “light trucks” should tell you that.

    All of which suggests that when government enacts a law, it should remember the law of unintended consequences.

    Prior to CAFE, there were plenty of full-size cars capable of doing almost everything that trucks and SUVs can do. But CAFE basically forced them out of production.

    The CAFE loophole for light trucks was enacted because, in the mid-1970s, when CAFE was enacted, most people who bought light trucks were either farmers, contractors, small business owners, etc. THAT is why there was a loophole in the mileage requirements, not because the Big Three envisioned it as an end-run around CAFE.

    Also shows why, if the goal was to reduce gasoline consumption, the better path would have been to simply levy an escalating tax on gasoline, which would have created the demand for more fuel-efficient vehicles. This would have increased demand for mass transit, and also influenced development patterns. CAFE also indirectly hurt these areas, too, because improved fuel economy of many vehicles, combined with declining gasoline prices (until very recently), made driving even less expensive.

  • avatar
    M1EK

    “Also, we when you used “these things” you should have been more specific so as not to include AWD.”

    In your statement, you intertwined AWD and SUVs, not me; but I’d still do it, since it kind of grew along with SUVs as CAFE pushed full-size cars and wagons to more of a fringe market and US car companies felt the need to pretend that their SUV buyers were rugged wilderness goers rather than daily commuters. (Note that even Subaru finally gave in – raising their AWD ‘car’ a few inches so it could be called a ‘truck’).

    I obviously agree, last commenter, with the fact that CAFE had unintended consequences. But it’s foolish to keep bleating about how people “want” these monstrosities when they’re being made artificially attractive. If my supermarket subsidized pork by taxing beef, and people chose more pork, is it proof they like the pork more? No; it’s proof they like subsidized pork more than penalized beef.

  • avatar
    Landcrusher

    But people DO WANT THEM!

    And, there is NO LOOPHOLE FOR AWD.

    No one will disagree with you that the subsidy makes MORE people buy them, but that does no negate the fact that THOUSANDS of us want them anyway. Proof is the fact that they sold hundreds of thousands BEFORE THE LOOPHOLE EXISTED.

    I cannot make it more simple than that. I am done.

  • avatar
    M1EK

    AWD is attached, not always, but usually, to SUV. SUV gets subsidy. Therefore, subsidy has impact on AWD. Simple enough?

  • avatar
    BKW

    Dunno about the other carmakers, but for many years all the FoMoCo vehicles in rental fleets were sold to them by dealers. Ford doesn’t sell fleet vehicles direct to whoever is buying them.

    Several Ford dealers over the years have advertised that they are the world’s largest in sales. How can they make that statement? Because they sold 1000’s of cars yearly to Hertz, Budget and others.

    From the late 1980’s thru the 1990’s, one small town Ford dealer on the West Coast sold over 30,000 vehicles to Hertz yearly. That made the dealer the world’s largest sales leader. A mega-dealer in the same area…said in their ads…”We are the largest dealer in sales…to individuals.”

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