Ford: The Incredible Shrinking Car Company

Frank Williams
by Frank Williams

Any guy who's gone swimming in cold water can tell you shrinkage is not a good thing. Yet even as Ford comes to grips with losing second place to Toyota, The Blue Oval Boyz say the automaker could shrink even more before they return to profitability (and start to pay off the principal on those gi-normous loans). At a "roundtable dinner" last night with the Detroit Free Press' Tom Walsh, FoMOCo CEO Big Al Mulally said his employer's market share could continue to drop as they seek to stabilize output to match demand (translation: cut production, close down plants, eliminate jobs). Mark "What Me Worry?" Fields thinks Lincoln can help pull the company out of its doldrums, citing a 15 percent increase in sales last year. Apparently, that's "the largest gain of any luxury brand in the U.S. market." Chief marketing director Jim Farley added Lincoln has a good future with younger buyers and ever-oh-so-PC "diversity customers." But what about poor, pitiful Mercury? Will it suffer the fate TTAC's Steven Lang predicted yesterday? Mulally tap-danced around that one. "We're committed to Mercury" but "we're continuing to review our portfolio. That's an ongoing assessment we continue to have, and should have." And if it does survive? Fields says it'll be the "smaller volume brand" in the Lincoln-Mercury portfolio. So as Ford shrinks, Mercury will shrink even more. And when something shrinks too much it just fades away…..

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  • William C Montgomery William C Montgomery on Jan 09, 2008
    KatiePuckrik: Selling Jaguar and Land Rover is a mistake, in my opinions. With the right management, Jaguar could have been the Germans’ worst nightmare. I agree that Jag could be the German's worst nightmare. But to that end, who’s to say that Tata isn’t the right management? Clearly Ford wasn’t it. Last year I reported that Aston Martin quit Ford, not the other way around, because Ford wasn’t prepared to effectively market and grow the brand. Maybe Tata can give Jag and LR the attention and support that they need to flourish. Also, I find it interesting that we are having this conversation about Mercury now, on the heels of Ford jettisoning AM, Jag and LR. I think the case could be made that there’s actually more elbow room for Mercury in Ford’s product mix today. Without the PAG (save Volvo) creating an artificial ceiling over the traditional FoMoCo lineup, the company is free to go upscale with Lincoln and Mercury could be pushed into the near-luxury space that Lincoln currently occupies (please, nobody try to convince me that today’s Lincoln is a premium luxury brand). What then do we do with Volvo if it can’t be the new Mercury? Send them back to the land of their inheritance (i.e. making tank-like super safe, comfortable, and practical cars for upper middle class buyers that eschew pretentious German nameplates).
  • Praxis Praxis on Jan 09, 2008

    umterp85, FoMoCo would be best served by understanding that Ford/Lincoln is closer in market perception to Kia/Hyundai than to Toyo/Lex and starting from there.

  • Umterp85 Umterp85 on Jan 09, 2008

    Praxis: I think ford is correctly looking beyond today's perception and looking towards tomorrow. Aspirationally---the Toyota / Lexus model is the gold standard---Honda / Acura a close second---this is what Ford should be benchmarking---and this is exactly what Mulally is doing. If Ford benchmarks mediocrity---they have absolutely no shot. Other than a warranty scheme---tell me what Hyundai has brought to the party that Ford should emulate ? Said another way----imagine the following headline... " Mulally reverses position---Ford bags Toyota as its benchmark--now looks to Hyundai as its inspiration" Mr Praxis---do you kind of see the ridiculousness of the headline ?

  • Carguy1964 Carguy1964 on Jan 09, 2008

    In order for Mercury to survive Ford has to stop treating it like a stepchild and give it roots of it's own, look how long these "parts bin cars" has been going on, the Mavricks, the Comets, Tuarus's , Sables. At least GM kickstarted Caddilac, got it going in the right Direction, except for the Escalade model, which is a Hyped up Denali...which doesn't even come close to the Germans...I recently went to the auto show was very disapointed by the interior design of the Ford Mo Co, it looked like all of the instrument pannels came from the same cars,with the exception of Lincoln, it looked like it was stripped from an 63-73 Lincoln,( talk about butt ugly0. Even the Edge has the same cheesey looking dials...Hey Ford , why don't you hire some of the Mazda designers, Thats probably why their CX-9 got top honor...However I will say this, that is a pretty nice looking retro 4 door station wagon you have as a concept car...Now if only you stuck to making concepts to reality, then only then the Asian and Germans would have something to worry about!