Ford's Short-term Game Plan: Cull Cars, Slash Configurations, Boost Profits

Steph Willems
by Steph Willems
fords short term game plan cull cars slash configurations boost profits

There’s a bell tolling for probably more than one Ford passenger car model, though we don’t know which ones just yet. Or do we?

As part of its updated operational strategy, detailed at the Deutsche Bank Global Auto Industry Conference in Detroit Tuesday, Ford Motor Company plans to sink $11 billion into electrification by 2022, release 16 fully electric models on a global scale, and field SUVs in every possible segment and sub-segment. Exhibit A: the subcompact EcoSport and brawn-ified Edge ST.

The company’s goal is greater profits and a healthier return for shareholders, not to mention a hoped-for lift in share value. Certainly, Ford’s declining stock did former CEO Mark Fields no favors.

Unfortunately, in order for Ford’s fortunes to soar, certain models will have to die. The company says it “will shift toward a lower volume passenger car lineup in North America and Europe.”

Jim Farley, Ford’s executive vice president and president of global markets, claims there’s no point in covering all segments anymore. And we all know which segment’s tanking these days.

“We have a rock solid foundation and we have seen growth in key areas, but we know we must evolve to be even more competitive, and narrow our full line of nameplates in all markets, to a more focused lineup that delivers stronger, more profitable growth, with better returns,” he said in a statement.

The automaker expects its North American SUV mix to grow by 10 percent in the next two years, with passenger cars falling by the same amount.

Already, we’ve seen Ford choose not to bring the next-generation Fiesta to North America, relegating the low-profit model in overseas markets and removing the Blue Oval from the subcompact car game. Just recently, we learned the midsize Fusion sedan’s planned redesign (for the 2020 model year) is now off the table. CEO Jim Hackett certainly didn’t seem all that sympathetic to the Fusion’s plight in a recent interview.

Should the Fusion go the way of the Tempo, that takes the model’s Lincoln MKZ platform mate and the European-market Mondeo off the market, too. We’ve long thought the full-size (and much-ignored) Taurus isn’t long for this world, what with limited retail interest and rising sales of SUV interceptors to police fleets.

In order to squeeze more dollars from the sale of its Escape, Fusion, and EcoSport models, Ford plans to drop the number of orderable configurations “from thousands, to just 10 to 20 combinations for each vehicle.” As for those electric vehicles, North America stands to see seven of the 16 planned EV models.

One of those vehicles, a performance-focused crossover, stirred up no shortage of controversy at this week’s North American International Auto Show after the automaker introduced it (verbally) under the Mach 1 name. Predictably, outrage ensued.

[Image: Steph Willems/The Truth About Cars]

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  • JustPassinThru JustPassinThru on Jan 17, 2018

    I think we've seen this strategy before. Usually, just before every recession/Arab Oil Embargo/contrived or political gas shortage. And each time it ends the same way; with records set for the German, later Japanese, later Korean makers. Maybe this next time it will be the Chinese brands. In 1979 it was AMC, heavily dependent on the Jeep lineup. In 2008, it was GM, sticking to luxo-trucks and pooh-poohing suggestions it focus on practical size-and-cost products. And, when the crunch came, each time...the social-engineer wags were all a-titter, damning the various makers for not making "socially responsible" products. Well, I reject "social responsibility" as an aim of manufacturing; but I do think they have a point: This Lux-Barge Market is driven, not by need but emotions; emotions and the sudden flush situation of various financiers and money-changers. That's not an endless market and the winds of change could blow the air out of their own sails. We are looking at a correction; it will be a costly one; and people will not HAVE $60.000, or what passes for it in the coming hyperinflation, for a one-ton dooley that hauls the pale face and soft hands of a Business-Admin graduate and his ego and manhood. Americans with honest jobs will need honest cars - inexpensive cars; the kind that Germans and Japanese needed after the war they lost. Because in this war on the dollar and on American savers and workers, today's workers will be the losers. And will have to adapt in their lifestyle. There won't be enough beaters and hoopties to go around.

    • See 9 previous
    • Dal20402 Dal20402 on Jan 18, 2018

      @dal20402 Again, workers in the real world almost never have significant savings. Between mortgages and student loans, most of them have more debt than savings, which makes inflation a net benefit for them. I'm a professional worker with very good pay and significant savings and yet I'm still decisively in this category, thanks to a mortgage that's 3x my annual income. "contracted/agreed-upon pay." Almost no workers have employment contracts. The ones that do are almost exclusively top-level executives. At-will employment causes workers a lot of problems, but in a balanced labor market one of the big benefits it can bring to workers is the leverage to ensure that wages reflect current value. Again, in the real world, unless the labor market is badly out of whack, wages keep up with inflation. (Although they do not keep up with productivity gains, which is a separate problem mostly resulting from bad tax policy.)

  • JustPassinThru JustPassinThru on Jan 18, 2018

    It's off topic...but the good times are bad for gold because gold offers no returns. When the currency is stable and the economy is roaring, as it was for two decades...only a fool would ignore the miracle of compound interest. When the FED is intentionally debasing the currency, while distorting the capital market with Zero-Percent at the Fed Discount window (to member banks) the economy roiles; and will whipsaw more with the distortions. Think Venezuela. Or Argentina. Or Zimbabwe. That's where gold becomes attractive.

  • Lou_BC You'd think cops would have an understanding of the laws they are supposed to enforce.
  • Merlyn I’m on my second Spark and love it! I can pass any car I’ve never had a problem going up a hill it does just fine. As for cargo I can fit three suitcases, two book bags and still have the front seat for a passenger. Not sure what point this guy is trying to make. I have hand free phone service and Sirius radio plug in my phone and have navigation. I would buy another spark in a heartbeat.
  • Buickman I won't own one and I'll be happy!
  • Jeanbaptiste Ever since y’all started sending your damn geese down here we’re just been waiting for one of you to show up.
  • 3SpeedAutomatic Drove a rental Cherokee for several days at the beginning of this year. Since the inventory of rental cars is still low, this was a 2020 model with 48k miles and V6. Ran fine, no gremlins, graphics display was easy to work, plenty of power, & very comfortable. Someone must of disarmed the lane assistance feature for the steering wheel never shook (YES!!!!!!!!). However, this woman's voice kept nagging me about the speed limit (what's new!?!?!?!).I was impressed enough to consider this a prime candidate to replace my 11 yr old Ford Escape. Might get a good deal with the close out of the model. Time will tell. 🚗🚗🚗