By on April 26, 2018

Image: Ford

Ford announced yesterday, via a filing with investors, that by 2020 there will only be two conventional cars (or gas-fueled cars, at least) in its lineup. Those models will be the venerable Mustang and the upcoming Focus Active.

I wrote our news hit on it, and in my rush to get it online, I perhaps wasn’t as in-depth with context as I could’ve been. I’d like to make up for that by digging more, both into the greater context of what’s a tectonic shift in product portfolio for a major, full-line automaker, and flesh out my thoughts on what it all means.

Perusing a few other news pieces and our own comments on the piece, I realized I had a lot more to say, both in terms of factual context and my opinion as a card-carrying automotive journalist (alright, we don’t really carry cards, other than our business cards).

Let’s start with the financials. The New York Times reported Ford is losing money on the Focus, Fiesta, and Fusion. Thinking bigger picture, Ford is planning on cutting $11.5 billion from its operating costs, despite having $1.7 billion in net income in the first three months of this year, which is 9 percent more than in 2017. Ford also wants to reduce future spending from $34 billion by 2022 to $29 billion. The automaker also reported a decline in profits or a loss in each global region in which it sells cars.

Moving over to sales, it’s not a secret that crossovers are crazy hot right now, and have been for several years. It’s also no secret that even though most of the current stable of Ford commuter cars are considered more good than bad – let’s leave the forgotten C-Max and outdated Taurus out of this and focus on the Focus, Fusion, and Fiesta – they still don’t compete, for whatever reason, with perennial hot sellers like the Toyota Camry and Corolla and the Honda Accord and Civic.

For example, the Fusion is not only outsold by the Accord and Camry so far this year, it’s also down 15 percent compared to its own year-to-date sales from last year. Meanwhile, the Edge midsize crossover was up 18 percent in March compared to last year and 2 percent year to date. According to Ward’s Auto, cars make up 32.4 percent of the domestic sales mix, while crossovers make up 38.2 percent.

On the surface, this looks like a logical business decision. With Ford anticipating that crossover demand will continue to grow, and also looking to cut costs, it’s not at all surprising that Ford would look at money-losing vehicles and decide not only to drop them, but to no bother replacing them with improved models.

Our rivals over at Jalopnik even defended Ford’s decision on this grounds – Americans aren’t buying enough sedans, and enough Ford sedans specifically, so why not go all-in on trucks and crossovers? Especially since crossovers no longer force buyers to pay the fuel economy penalties they once did? Not to mention that car-based crossovers now have car-like rides, and most car buyers don’t give a flying truck about handling, anyway?

Thing is, the car business isn’t always logical or rational. More to the point, it’s one thing to make what seems to be a mostly logical decision, but one must consider consequences.

For one, there’s the potential possibility that gas prices could spike. Yes, it’s true crossovers are more fuel efficient than ever, but Ford’s Escape, for example, still doesn’t match the Focus for gas mileage. If pump prices jump drastically again, and a buyer compares an Escape to a car that gets five to 10 more combined mpg, the car might win out due to budget considerations. Given that it takes three to five years to launch a car, Ford may find itself lacking product should fuel prices put an end to the crossover craze. Or at least, it will lack new product that isn’t a battery-electric vehicle. Ford has said it’s working on adding BEVs (no word on whether they’ll be cars or crossovers) and, to be fair, Ford could probably bring global cars to America if it needed to.

Not every buyer wants a crossover, either. Yes, a lot of people need and/or want them, but “a lot” isn’t the same as “everyone.” Not all buyers need the crossover utility, or want the crossover ride height. Sedan segments are shrinking and may stay shrunk, but they aren’t completely dead, and I don’t think they will be any time soon, if ever. So Ford appears to be giving up in these segments instead of putting time and money in to come up with competitive product.

Ford seems to be forgetting that sedan intenders can sometimes be turned into crossover buyers, either when they peruse the showroom or if they experience lifestyle changes that require a shift to a CUV. Now, Ford dealers won’t be able to show sedan shoppers an Edge, nor will Focus owners expecting a baby be already in the Ford family, where they could more easily be sold on the virtues of, say, an Escape or Explorer.

Yes, it’s true the company was struggling in the sedan segments, but it’s not like it had no chance at success. The Focus and Fusion are quite good, in my opinion – the Fusion is right there with the Camry and Accord. Small-car buyers could do worse than the Fiesta. The Taurus and C-Max were neglected by the company in recent years, and the large sedan segment in which the Taurus plays is in much direr straits, so I don’t mourn their eventual loss as much as I do the other three. Still, there’s an element of Ford shooting itself in the foot at play.

That goes for marketing, too – anecdotally speaking, I feel like Ford hasn’t pushed its car line hard in quite some time. I haven’t tracked it, so I could be wrong, but when I tune into the tee-vee each night, I’m hammered with F-150 ads, as well as EcoSport and Escape commercials, but I see nary a peep about Focus or Fusion. I see a certain Texan actor pushing Lincoln more than I ever see Ford hyping its well-made midsize sedan.

So, Ford may have shot itself in the foot by neglecting C-Max and Taurus and not marketing its subcompact, compact, and midsize cars well enough. Kinda hard to shrug and say “consumers don’t want these things” when you haven’t tried very hard to sell them. Yes, a lot of sedan buyers don’t think beyond Accord and Camry, but Ford (or any other OEM) can’t let that dissuade them from trying to get buyers’ attention.

Another reason why I worry that Ford’s shortsightedness will come back to bite them right in the Oval is that the shift to BEVs may end up falling flat. If it does, Ford now has no gas-fueled cars to fill in the gaps. While I’m personally in favor of more electrification (at least when it comes to commuter cars), consumers still struggle to grasp the concept. Many still shun hybrids, never mind that batteries will last longer than they own the car and that driving and refueling a hybrid is basically the same process as it is with a non-hybrid. Range anxiety still scares folks away from EVs, despite the Tesla Model 3 and Chevrolet Bolt showing that ranges over 200 miles are now achievable.

There’s also the matter of residual values. Ford’s decision probably just made every Fusion owner who’s going to sell in a couple years throw up in their mouths a little. Here’s a hint as to why: The discontinuance of these cars won’t make them collectible.

So says Ed Kim, Vice President of Industry Analysis at AutoPacific: “Both Fusion and Focus are consumer durables; they are bought because they fulfill a functional role, not because they are collectible or particularly desirable. Thus, them being discontinued will not make them more valuable in the used market; on the contrary, they will likely be viewed as products that couldn’t quite cut the mustard and were therefore broomed from the Ford lineup.”

On the surface, going all-in on crossovers and trucks seems to make logical sense, based on market trends. But I suspect Ford didn’t think it through (we haven’t even mentioned what this means for Lincoln’s sedans) and with cross-town rival General Motors saying that it’s committed to cars, Ford may have actually hurt itself instead of helping itself.

Chasing trends to please nervous shareholders is probably not the best way to take the big-picture view. I could be wrong – perhaps Ford is just the first automaker to acknowledge a future that, save for sports cars, will be all about crossovers. But I suspect Ford’s big bet won’t work, and sooner or later there will be sedans on a drawing board somewhere in Dearborn.

I don’t want to overreact – I don’t foresee Ford heading to bankruptcy because of this. I also acknowledge my own bias is to prefer sedans over CUVs in most cases. But I’m saddened by this news. Unlike when Fiat Chrysler gave up on the compact and midsize segments, Ford actually offered good product. And unlike FCA, Ford is giving up on just about all cars, at least Stateside. That’s still hard to fathom. It essentially means Ford will no longer be a “full-line” automaker.

Ford has financial concerns, no doubt. I just don’t see the all-in-with-crossovers maneuver as the correct path. Maybe the passage of time will prove Jim Hackett and his team right, but for now, I see an automaker flailing its way forward.

[Images: Ford]

Get the latest TTAC e-Newsletter!

Recommended

131 Comments on “Fulminating Over Ford...”


  • avatar
    MrIcky

    “…But I suspect Ford didn’t think it through (we haven’t even mentioned what this means for Lincoln’s sedans) and with cross-town rival General Motors saying that it’s committed to cars, Ford may have actually hurt itself instead of helping itself.”

    Every car manufacturer executive who ever went to business school has thought it through. They’ve been thinking it through ever since it started underperforming. It just took them a while to realize that no matter what they did it would likely still lose money- and oh how the journo’s would wail if they took cost cutting steps on the interior. They’ve likely been wringing their hands over this even harder since Sergio made his decision.

    The TL:DR sort of sounds like “I don’t like it so it’s dumb”.

    • 0 avatar
      Tim Healey

      More like, I don’t like it, so here’s why I think it’s dumb. I could be wrong. I often am.

    • 0 avatar
      DeadWeight

      Jim Hackett is a HACK who is going to seriously jeopardize Ford’s future viability, if left to his own (idiotic) plans, and I’m going to rain down pain upon him as I did the completely inept (corporate, product and marketing malpractice) trio of Johan-MelodyCTLee-UweFountainPenBoy.

      #HereComesThePainTrain

      • 0 avatar
        DeadWeight

        p.s. – Ford and Lincoln make, for the most part, with very few exceptions, vehicles that are inferior in terms of panel fitment, interior trim/materials, finish and fit, and especially, reliability and durability, relative to nearly every other manufacturer.

        Ford vehicles are largely unreliable, disposable, poorly assembled, poorly engineered p, and massively overpriced p, and sold by one if the most sleazy dealership networks in the country, full of primordial ooze salespeople and service personnel.

        • 0 avatar
          Bazza

          I been saying for some time that Ford is our domestic BMW, particularly as it rates to quality and disposability. The Mustang and F-150 *may* be exceptions but they would simply prove the rule. Weaning off sedans isn’t going to fix any of this unless they leverage potential benefits from simplifying their product lines. I’m not holding my breath.

      • 0 avatar
        tomLU86

        Hackett’s predecessor delivered decent results, but they were not “good enough.”

        One thing about the Detroit auto CEOs–like most American CEOs, they are grossly overpaid. Their boards are overpaid (I would rather be a GM board member than win the lottery).

        In their pursuit of profitability targets that are not viable over time, they are ‘using data’ to drop less profitable small cars, so they can make bigger ones.

        How many readers here are dropping their car insurance to increase their disposable income?

        Lets compare corporate performance and CEO pay at Toyota and Honda vs the big three for the last 25 years, shall we?

        What gets me is, how come NO ONE in the mainstream media or even the UAW, or even in the Democratic Party, has looked into this.

        The (conspiracy of) silence is deafening!!!!

    • 0 avatar
      dcohn

      Running a company where product development takes a long time according to short term market trends seems dumb. So what’s going on? My guess, For what it is worth, is that Ford has decided the traditional US market for cars, where a family buys/ lease a specific car, won’t survive the various disruptions going on (higher educated 20 somethings preferring to live in walkable urban areas, electrification, automation, etc.), but “truck” (pickup, suv, cuv) sales might. All these trends favour car sharing. Car sharing means fewer vehicles and fleet buying and that means low profits.

  • avatar
    lastwgn

    I grew up a dyed in the wool Ford guy. And more important, a car guy. When raising three children, the wife refused to even consider a minivan so we had a succession of Taurus/Sable wagons, starting with a 1993 Taurus purchased in 1994. By 2005, quality issues on a 1996 Thunderbird and a 2000 Mercury Sable forced me to switch. Fords complete neglect of its car portfolio forced me away then.

    I am a Mazda buyer now. Last summer went to the dealer to buy a Mazda6 and came home with a new CX-5. At the time much was being discussed about Mazda’s efforts to move up into semi-premium territory. Part of the strategy was to avoid tossing significant cash on the hood just to temporarily prop up sales. The action of Ford giving up on the sedan market because it cannot make money certainly seems to support Mazda’s strategy. If there is no money to be made at high volumes, but with an endless parade of incentives, the only alternative for a small company like Mazda is to carve out a niche and hold the line on pricing so that it can be profitable. The only way to carve out that niche and be profitable on lower volumes is to keep the transaction cost up. Slowly but surely it seems to be working for Mazda.

    For Ford, having to slug it out in the high volume playground, and unable to do it profitably, and viewed from a purely logical business perspective, it makes sense. But, I cannot help but wonder about the synergies of someone going to a dealer looking for one type of vehicle and ending up with another, such as the 6 and CX-5 in my case. Ford will now not have the “entry level” product that once upon a time was always deemed to be so important.

    Given how late they are to the party with the Ranger, it certainly allows for their product decisions to be openly questioned.

    • 0 avatar
      Felix Hoenikker

      So yes, mindless cost cuttiThe last Ford I bought was a used 2000 Taurus. The long term durability was abysmal compared to the 1990 and 1992 Taurii that I previously owned. My wife has since taken Ford off our approved auto vendors list because of the low quality of the 2000 Taurus. She is in the market for a new car (CUV probably) but will not consider a Ford at any price.
      ng and decontenting come home to roost.

  • avatar
    Russycle

    Seems like Ford should keep something in the stable to attract first-time buyers and hedge against gas price hikes. Keep the Focus.

    • 0 avatar
      Verbal

      This is an issue of losing brand loyalty. An entry level buyer who might start with a Fiesta or Focus, may come back later to buy another Ford if they have a favorable ownership experience. That is when Ford can sell them on a high-profit CUV/SUV/PU.

      Instead, Ford will now lose that brand loyalty pipeline of buyers as they move up the product chain. In the long run, this will take a bite out of their future sales.

      • 0 avatar
        threeer

        No…now they’ll just start them out on an EcoSport (heaven help them) and move them up the CUV/SUV ladder.

        • 0 avatar
          Bazza

          Ecosport as a loyalty starting point risks the same outcome as buying a Ford sedan…one and done.

          • 0 avatar
            Wheatridger

            The contrasts between the interior materials, comfort and style of a Fusion vs Ford’s latest pride, the EcoSport, tell me all I want to know about Ford’s future. I love my C-Max, but I’m sure I’ll be “one and done,” too.

    • 0 avatar
      civicjohn

      Mr. Healey,

      At least you were forthcoming in your initial drive-by observations, kind of lightweight.

      Yup, maybe we’re headed back to $4/ gallon gas ( sorry CA, I hear that you have another gas tax coming). The US simply doesn’t have the pipeline infrastructure to take advantage of what can be brought to the market, and if the average fuel cost raises to $3, $3.25, it won’t stop the CUV/ pickup truck sales. Hell, I met my ex when she was driving a Mitsubishi, yet she recently convinced her new hubby to buy her a Colorado! I have no freaking idea of what she’ll be using the bed for, I figure there will just be more cars in the grocery parking lot that will suffer from her recent purchase. Lord knows, I’d never park close to her!

      What’s the big deal? They will still have factories that can kick out a sedan if that market ever picks up. Meanwhile, Toyota (Camry) and Honda (Accord) can fill their needs. Neither one is making nearly the margin Ford is making on their pickups, and those buyers are committed to the brand, and Chevy and Ford can’t change that. Chevy needs to binge and purge as well.

      I (perhaps foolishly) sent the first kid off to college with my Lexus, and the second one got my 2007 Accord EX-L with 71k miles on it, timing belt changed and only dealer serviced (don’t hate me for that, I’ve done business with them for over 20 years).

      At the dealership in 2016, it occurred to me that the new Civic was as big as the Accord I was giving away, so I bought one and promptly broke my back (not due to the car). I don’t regret the decision, I’ve since been in a number of rental vehicles, and most of them suck. I actually like it, and will never buy a GM or Ford again, unless it’s a Mustang.

      I’m also digging the 5.25% dividend of Ford stock while I recover. Good riddance, if you can’t afford a Camry or Accord, Hyundai is waiting to put cash on the hood.

    • 0 avatar
      sgeffe

      “Made In China” = too many people put off to make a go of it.

      What does this do for the rental market? Or is the lowest tier at Hertz going to be an EcoSport?

      (I’ve gotta think that the PowerShift debacle is really what drove at least a few nails into the coffins of the Focus and Fiesta.)

      • 0 avatar
        SSJeep

        Trying to sell a vehicle made in China – at least in the US – is practically opening the door to poor sales. Most new car buyers wouldnt entertain a Chinese made vehicle (yes, I know all cars use some China made parts), and the few that dont care already have the Envision.

        I cant see any buyers choosing a China made Focus over a US/Canada made Civic.

  • avatar
    Big Al from Oz

    Tim,
    A well written article, you did omit on statement from Ford’s press release, that is Ford is still using commodity prices as a concern hurting profits. To me this seems a way of stating that the aluminium vehicles are not profiting as they should.

    The other area you haven’t touched on, which is an area that is affecting Ford as well as GM and Chrysler is the way in which the US industry is regulated.

    I believe there are enough cars/sedans sold in the US to justify Ford having a decent line up. I believe, as you do Ford’s cull of passenger cars is severe.

    Reliance on SUVs, CUVs and pickups limits Ford’s ability to maintain and increase it’s potential.

    I think it’s sad to see the US manufacturers slowly erode. They only exist because of protection. This is one area you overlooked in your comment.

  • avatar
    Sloomis

    “Focus, Fusion, and Fiesta – they still don’t compete, for whatever reason, with perennial hot sellers like the Toyota Camry and Corolla and the Honda Accord and Civic”

    I’d imagine the fact that they fall apart a heck of lot quicker is a big part of it…

    • 0 avatar
      Scoutdude

      Today’s Camry and Corolla customers and to a lesser extent Accord and Civic customers aren’t buying them for their real world reliability or durability, because they aren’t buying them, they are leasing them and won’t keep them more than 36 months.

  • avatar
    Lightspeed

    I hate CUVs and yet this makes sense. What is a “car” is changing meaning and it’s beyond ‘active lifestyles.’ People want some extra space, even though they wont use it; people want to sit up high, even though everything sits high now negating that advantage; people want rugged capability, even though…all the grey wheel-opening cladding in the world won’t make a CUV into a 4×4. What saddens me is what’s been lost in terms of design language as narrative. We’ve only got one now – I am an active lifestyle person who needs this to haul two kids or a bicycle and my ipad. Cars have far more latitude to create a story. I pity CUV/SUV designers, there is so little space to distinguish your product (compare a Rav4 and an Escape). Honestly, I can’t tell a $30K Hyundai SUV from a $70K Mercedes. Fortunately, there is one SUV left that actually is what the image projects – the 4Runner, check prices on 20-25 year old ‘Runners, nothing built today will compare.

    • 0 avatar
      28-Cars-Later

      I like you, will you be my friend?

    • 0 avatar
      Land Ark

      “People want some extra space, even though they wont use it”

      Even though in man cases they don’t get any extra space in a CUV package over a comparable traditional hatch or, because of a “dramatic” sloping roof line, more frequently a sedan.

    • 0 avatar
      bunkie

      “people want to sit up high, even though everything sits high now negating that advantage; ”

      It’s worse: choosing not to “sit up high” places you at a definite disadvantage. Froma driving perspective, I prefer cars, but when I drive my Tacoma, I don’t feel like the short guy in a big crowd.

      One thing not considered with respect to the CUV boom is that aging boomers are finding CUVs easier to deal with than sedans. It’s easier to get into an out of a CUV when you have arthritic knees. The problem with this from a product=planning perspective is that it won’t be long before boomers are no longer buying vehicles.

      The most important more point is reducing program costs. One need only look at FCA to see that ditching the Dart and 200 was a good move from a profit perspective. Why spend money on product lines that aren’t market leaders?

      • 0 avatar
        Lorenzo

        When the boomers are gone, their kids will have arthritic knees, and the boomers’ grandkids, etc. Nobody’s market is dying off, it’s just getting a bit smaller, since the boomers didn’t have as many kids. The millennial generation’s numbers are bigger than the boomers’, and they’ll have creaky joints too.

        That’s where Cadillac went wrong: they were selling creature comforts in an “I’ve arrived” package to old people with the money to buy new, and chose to market to younger people with less money and more fickle tastes. There will ALWAYS be creaky-jointed old people with the money to buy new.

  • avatar
    deanst

    Look at each separately:

    Taurus -not a great vehicle, falling segment, very hard to justify a new model, won’t be missed
    Fiesta -subcompacts were never popular in the U.S., can’t see Ford making any money in this segment, ecosport will probably capture more buyers
    Focus – replaced by the focus active – higher selling price in a growing segment. Some sedan buyers may be disappointed, but their ranks are declining
    Fusion- will continue as is with no major updates. Still competitive and could remain that way for several years with a little TLC. Adding the Bronco and other SUVs/CUVs is a wiser use of resources.

    I guess at some point people complained when convertibles were dropped, hardtops, coupes, etc. Markets evolve….

    • 0 avatar
      mikedt

      They probably could have sold a lot of Tauruses to the older crowd if they hadn’t made the center console so damn big. Almost every comment you see on the Taurus by the public is that it’s a big car that makes the front seat passengers seem cramp.

      • 0 avatar
        28-Cars-Later

        Yup you’ve got it.

      • 0 avatar
        MrIcky

        The older crowd likes CUVs too. Easier to get in and out of. More upright seating with better ergos.

        • 0 avatar
          gearhead77

          Taurus has fairly upright seating, which I remember when it was introduced as the Five Hundred many moons ago. I just had one as a rental ( new Limited, only 13 miles on it) and while the seating position was high, the console design really intrudes on the space.

          The car feels small on the inside and while it just might be an illusion, it’s pretty damn convincing that it doesn’t have the room it should for its dimensions. Panther bench seat this ain’t, but it’s not Panther with a console either.

  • avatar
    tonycd

    I agree with the above comments that that Fiesta, Focus and Taurus don’t prove you can’t sell a car, you just can’t sell a fatally flawed car.

    From a business standpoint, if we were talking about a mutual fund dumping all its car-company holdings and loading up only on pickup-truck and SUV-company holdings, investment analysts would say it was a dangerous loss of diversification – or in plainer English, putting all their eggs in one basket – and I’d say that here. In yet one more way, Ford is now more at risk if the market changes than Toyota is.

  • avatar
    Big Al from Oz

    With the changes coming to CAFE would of also been considered by Ford.

    If you look at Ford’s current CAFE adjusted FE, it’s 22.8mpg. If this can be lowered via the CAFE changes would of made it easier to remove the cars from Ford’s line up. (remember in the US CUVs/SUVs are considered trucks, don’t ask me why? (protectionism of larger vehicles maybe))

    • 0 avatar
      Scoutdude

      You make up some crazy crap Al, CAFE numbers are not the same as put on the window sticker. The worst of Ford’s vehicles, the Raptor is just under that 22.8 while the best of the bunch the soon to be departed Fusion Hybrid is well over 60mpg CAFE.

      That said CAFE is a big driving force behind the dropping of the cars.

    • 0 avatar
      DenverMike

      Basically any car not able to net an easy 40 mpg (sticker) average, might need to be killed or sacrifice for the (Obama) CAFE gods.

      Bigger vehicles, Trucks etc have way more profits built in, than necessary to easily overcome CAFE fines.

      So yes all the CAFE nonsense/madness will lead to more bigger vehicles on US roads. Unintended consequences and whatnot, just ask Europe.

      • 0 avatar
        tonycd

        Denver, this is silly.

        First, those CAFE rules are going to be rolled back under the current administration anyway.

        Second, they’re irrelevant to Ford’s failure in sedans. Honda, Toyota and Mazda are coming close to those “future” bogeys right now, even in some models that don’t resort to exotic technologies like hybrid, EV, fuel cell or diesel. Meanwhile Ford makes a tanklike full-size sedan whose driver’s seat is inexplicably too cramped for ordinary-size drivers, and two smaller hatchbacks where they outsourced and screwed up the radio/AC controls and cheaped out on the automatic transmission. As a result, nobody wants to buy them.

        This has a whole lot more to do with Ford’s own managerial incompetence than with the previous US president.

  • avatar
    65corvair

    I think Ford is making the right choice. Little cars have no profits in them, so why bother. Do the buyers trade up in a few years. Not really. The Fiesta I had was responsible for two Honda purchases.

    If gas goes up, what will really happen is, “My old pick up gets bad milage, look, the new pickup get a lot better milage”. Or even more likely is an old Explorer get traded for an Escape instead of a crapy little Fiesta.

    • 0 avatar
      vehic1

      65corvair: Is that what happened when gas prices were at the all-time high, in 2007? – did buyers flock to newer large trucks and slightly smaller CUVs (the Escape was around then)? I recall people getting small cars, even motorcycles and mopeds, etc.

      • 0 avatar
        MrIcky

        vehic1, the best selling vehicles in 2008 per cars.com and the magic of google was:

        Ford F-Series: 515,513.
        Chevy Silverado: 465,065.
        Toyota Camry: 436,617.
        Honda Accord: 372,789.
        Toyota Corolla: 351,007.
        Honda Civic: 339,289.
        Nissan Altima: 269,668.
        Chevy Impala: 265,840.

        What I remember is everyone bought fewer vehicles period. There wasn’t a huge shift from one type of car to another to save gas.

      • 0 avatar
        bunkie

        The big difference between the last gas price crisis and the next one is that there are viable electric car options now that didn’t exist back then. I would suspect that all it will take is one serious price crisis to drive the adoption rate of electric vehicles into double digits. I could well be wrong, but I think we have turned a corner in this respect.

        • 0 avatar
          Dan

          Viable electric car options? Double digit take rates? There’s a $55,000 Tesla Civic, a $90,000 Tesla Accord, a $120,000 Tesla Venza, and a couple of green PR stunts like the Leaf and Bolt that they only pretend to sell in NYC,and SF.

          None of these cars even exist to the people to whom a $100 monthly pump nudge matters.

          • 0 avatar
            Wheatridger

            It’s not quite too late to snag one of the last C-Maxe Energis for $17,000 and file for tax credits. In Colorado, that’s $9007. Still think you can’t afford a (partly) electric car? Over the first 12,000 miles, mine got 65 mpg.

    • 0 avatar
      TrailerTrash

      I agree.

      First, IF gas prices go up, then we need to really understand there is manipulation. As we have recently seen, there is PLENTY of oil available.
      Please, no more talk about oil shortages unless something like war is taking place.

      Next, nobody here knows WHAT types of vehicles Ford is talking about. They may indeed have really cool, trend-setting new vehicles on the table.
      Vehicles that straddle the car/SUV category.
      There is a reason the Subaru tall wagon is doing so well.
      Tall wagons/car-ish suvs MIGHT just be the next phase of automobile design.

      • 0 avatar
        tonycd

        Trailer, have you heard of a fellow named Bolton? The decision has been made that something like war is quite likely going to take place.

        When it does, carmakers who have a stable of 40 hwy/30 city vehicles will be at an instant and enormous advantage. Contrary to the fiction often repeated on this site, the immutable laws of physics and aerodynamics put SUVs at a permanent disadvantage, especially on the highway – frontal area and drag still matter, no matter what anybody wishes or says. Detroit shortsightedly bet the farm on an endless gravy train of big SUV and pickup profits once, and never fully recovered. Chrysler has half an excuse because they’re half broke, but Ford is just following the American tradition of being forbidden by Wall Street vultures from focusing beyond the next quarterly profit report.

        • 0 avatar
          TrailerTrash

          there is no more a chance of war with bolton than and other sos.
          there IS a greater chance if other sos fools allow future wars due to poor leadership and enabling of dictators and bad states to advance as did another wimp you might recall…chamberlain.

          and the point is nobody here knows what the hell ford is going to produce.
          they might get better mpg.
          low riding cars are out.
          get with it.

          and another point…i was talking about a wold war, in which case we have bigger problems than no gas.
          meanwhile, we have constant wars going on and the higher price of oil has done nothing more than made it possible to afford newer ways to get to the plentiful oil there is.

          • 0 avatar
            tonycd

            Trailer, for some reason I’m going to take the bait and answer your post.

            First, to your statement that “there is no more a chance of war with bolton than and (assume this means ‘any’) other sos.” The guy has ALREADY successfully achieved his ambition to get us into a war. You might remember it – it was called “Iraq.” Three quarters of a million people slaughtered, many of them innocent women and children, a major contributor to the worldwide 2008 economic Great Recession, and damaged America’s national interest by disarming the main military counterweight to Iran in the region. He’s already rattling the saber THIS WEEK to negate the nukes-preventing Iran deal already in place. What part of this supports your statement?

            Second,”low riding cars are out” and “they might get better MPG.” This equals higher aerodynamic drag. All other things being equal, this equals worse MPG. You can tell me to “get with it,” whatever that means. But if it means agreeing that Ford has the power to magically repeal the laws of physics, uh, no.

        • 0 avatar
          "scarey"

          Although I can’t claim to have any fore knowledge of what will happen in the Middle East especially regarding Syria and Iran, judging by Mr. Trump’s actions resulting in the potential end of the Korean War (after 68 years), I would say that his preferred weapon of choice is MONEY, and that Iran, Syria, and Russia may well be persuaded by the sheer force of tough talk, military force, diplomacy, and the largest economy in the world to give up their evil ways and join the family of nations, as is Kim Jong Un and North Korea. As you know, appeasement failed to get any good results.
          BTW, the price of oil is rising as we speak. Just sayin’.

    • 0 avatar
      jkross22

      “Little cars have no profits in them”

      So you think Honda makes no money on the Fit?

  • avatar
    vehic1

    Russcycle: +1, exactly in a nutshell. Buyers who have more kids, or get a promotion/raise – may opt to pop for an SUV – and if they’re satisfied with their present car brand, they may simply switch to its SUVs. With gas prices edging upward, one has to wonder about the wisdom of essentially abandoning sedans for (currently) less fuel-efficient vehicles. And sales volume – how much has the Flex sold in its several years’ existence?

  • avatar
    cicero1

    I have an issue with the opinion by some that this change will not make Ford a “major, full-line automaker” I believe the changes are in north America only, thus Ford will make/sell new cars elsewhere. In the American market is VW considered a “full line automaker” because it does not sell any pickups here? you can argue Honda is not as the ridgeline is not truly a pickup. Both VW and honda would seem to be admitting they could not compete in full size trucks, so why try.

  • avatar
    gasser

    Entry level, be it a compact or a low price midsize, does not work when the vehicle turns out to be a POS. With all of Ford’s recalls, their “first buyers” are turning into “never again” buyers. Cost cutting comes home to bite a company on its butt. I am appalled by the seemingly endless string of Ford recalls, and think that the major cost of these recalls with be in the loss of future sales, rather than in the cost of correcting the problems.

    • 0 avatar
      conundrum

      And this news from Australia via the Guardian today:

      “Carmaker Ford has been fined $10m after it wasted the time and money of thousands of customers who bought vehicles with faulty gearboxes.

      The consumer watchdog took action against Ford Australia for mishandling customer complaints over cars that shuddered, jerked or lost power because of faulty transmissions.

      Some customers were told it was their driving style causing the clutch problems, despite Ford knowing the gearbox was at fault, the ACCC said.

      The federal court on Thursday confirmed the $10m penalty for engaging in unconscionable conduct relating to about 10,500 customer complaints between May 2015 and February 2016.

      The complaints were over Ford’s Focus, Fiesta and EcoSport models sold between 2011 and 2016, which were fitted with a PowerShift transmission.”

      Imagine that. Meanwhile Ford blithely sells this piece of rubbish here and denies everything. Unconscionable conduct indeed

    • 0 avatar
      Trucky McTruckface

      And how many times has this played out at Ford over the years? Not one, but two generations of Focus that turned to be quality nightmares. Windstar. Tauruses with the Essex V6. Disintegrating wiring harnesses in the Contour. The Explorer/Firestone tire fiasco. Etc, etc.

      All problems that could have been avoided at minimal cost. Ford has a long track record of coming out with impressive-looking new product that doesn’t hold up due to cut corners, and then not adequately rectifying the issue. Once the buying public wises up, they stay away in droves. When sales of a product slip, Ford also has a long record of discontinuing investment in the product until sales tank so bad that they kill it off altogether, claiming there’s no longer a market for that product.

      Ford’s trying to play this latest move off as some sort of forward-thinking positive, rather than yet another pathetic retreat. This is a company that’s learned nothing from the last three decades, but thanks to massive truck profits they’re able to continue getting away with being a deeply dysfunctional organization…barely.

  • avatar
    Scoutdude

    I like how everyone keeps saying that they will be in big trouble if gas prices take a significant jump, yet discredit the fact that Ford will be introducing a number of EVs and it has commited to making Hybrid and/or plug in Hybrid versions of all new models going forward from 2020. So while the standard Escape won’t get better MPG than a Focus the Escape Hybrid will beat the Focus let alone the Fusion that the buyer is likely to come from. Ditto for the Explorer or Edge Hybrid getting better MPG than the Taurus and likely meeting if not beating the gas Fusion.

    The fact is Ford is reacting to not only the shareholders who are concerned with current stock price but to the CAFE regulations that are essentially outlawing cars, at least of the internal combustion variety.

    • 0 avatar
      WalterRohrl

      “but to the CAFE regulations that are essentially outlawing cars, at least of the internal combustion variety”

      That’s more than a little extreme, isn’t it? I don’t see Toyota or Honda or Nissan being concerned that their cars are being “outlawed due to CAFE” – More that the domestics can’t (or for whatever reason won’t) compete.

      What’s more is that the Escape is being outsold by EACH of the above makers’ competitive product in the same segment. So that’s effectively another loser if we are being honest and looking at competitive sales volumes.

      The Edge is MAYBE a success but it is even outsold by the Hyundai SantaFe of all things. And its absolute volume is less than Fusion IIRC.

      The Explorer is doing well. Not sure why, as it is cramped inside relative to its outside dimensions and it’s an old and not very fuel efficient platform and starting to be in serious need of updating.

      You didn’t mention the Hybrid Fusion. None of the Hybrid SUV’s you mention are more efficient than the Hybrid Fusion, are they? An Escape Hybrid would not be more efficient than an imaginary Hybrid Focus, would it? And where the heck is that Hybrid Escape? It’s been almost a decade since the last Hybrid Escape. Again, too little, too late.

      Hybrid Explorer? Hybrid Edge? What’s been the hold up? None of these base vehicles are anywhere near new. Why are the hybrids such afterthoughts?

      Keeping this going, soon Ford will be a one-trick pony, just F150 all the things. That’s no strategy.

      There is NO reason that Toyota couldn’t actually commit to A) redeveloping the Tundra and B) adding and making way more versions of it for it to go head to head with at least every F150 variant, most of which aren’t REALLY used for work that a Tundra couldn’t handle. Then beef it up more to go head to head with F250 and F350. They certainly have the money to do so. After three generations they’ve learned plenty and I can’t think of a good reason why they wouldn’t eventually go there.

      At the end of the day Ford is hardly capacity constrained. It’s not as if they could sell another 100k Escapes if they could only produce them somewhere. It’s merely forty years of not really giving a crap about the bread and butter vehicles coming home to roost for good. A very sad state of affairs, indeed, that pisses me off to no end.

  • avatar
    ajla

    The Lexus GS looks to be going away, but we’ve got new Stingers, G70s, Altimas, Insights, Camrys, LS500s, K900s, ES350s, Accords, Avalons, and Corolla iMs. A lot of these vehicles are even being built in the US.

    Most of Toyota’s BOF offerings are 9 to 11 years old and in that time they’ve invested in four coupes on four different platforms, only one of which is even shared with a sedan.

    VW also seems to be staying in the American market car game with a new Jetta and the upcoming Arteon.

    Mercedes offers a coupe and convertible version of basically every car they sell.

    So is a major reckoning coming for the other automakers?

    How is it these companies are apparently able to not lose a money on US car sales like Ford/FCA/GM?

    • 0 avatar
      dal20402

      I think the Germans are going to be forced to streamline their passenger car lineups, probably in coincidence with a further expansion of the crossover lineups.

      The Arteon is going to be a worse flop than the CC, while the Jetta is selling in the one sedan segment that looks to do OK for the foreseeable future.

      Toyota has missed a couple of CUV boats, leaving sales on the table, while they play around with low-volume coupes. They need a SWB two-row Highlander (basically a cheap RX), a Lexus LS-based CUV, and they were years late on the three-row RX. Their core products are selling so well that they haven’t been hurt too badly, but they could have grown bigger.

      • 0 avatar
        WallMeerkat

        It should be noted that the Jetta is now a North American model, having been axed from Europe due to slow sales (and being based on a previous generation Golf while the new Octavia is a similar shape, more practical and MQB based)

      • 0 avatar
        jkross22

        I suspect you’re right about the Arteon. Yet again VW thinking they load a car with cheap tech, piano black plastic and a cool design and expect 45-50k for it.

        Sure, it starts at 35k. Just like a 320i. Most people would pick the stripped roundel over the stripped VW even though the Beemer is slower, older and uglier. Both are 15-20% overpriced.

  • avatar
    dal20402

    I think going from 4 sedans to 0 is an overreaction. I think the right move would have been to go from 4 to 1; leave the new Focus and bin the others.

    That said… many of you are overstating the risk.

    In the event of a fuel price jump, *passenger cars* will be more important than sedans specifically. And Ford has plenty of those in other markets, and at least a few of them would be very easy to bring to the US in a hurry.

    The EcoSport and Focus Active are now the products that will bring potential repeat customers into the showroom. Not many entry-level buyers are going to be looking specifically for a sedan anymore, and if Ford can market those two products at cheap-sedan-like prices, they will get plenty of buyers.

    • 0 avatar
      ajla

      “and at least a few of them would be very easy to bring to the US in a hurry.”

      I doubt it would be “very easy” to do “in a hurry”.

      More like “possible” to do “within 12 months”.

    • 0 avatar
      FreedMike

      “The EcoSport and Focus Active are now the products that will bring potential repeat customers into the showroom.”

      Well, that assumes the product is good enough to merit a repeat purchase. The Focus Active is an unknown quantity, but you can take it from someone who’s tried out the Ecosport – anyone who buys one won’t be back for another Ford.

    • 0 avatar
      DeadWeight

      The Ecosport is a rolling dumpster fire fit for, at best, a Calcutta secondary road.

      Ford is being HORRENDOUSLY mismanaged now with HACKett at the helm, and will suffer a great fall.

  • avatar
    JMII

    Say you just want a simple, normal, average Joe kind of car and you desire to buy American. So you walk onto your local Ford lot and… immediate leave because they only have trucks. By making this move Ford is basically saying we give up, go see someone else. I’m clearly getting old because I remember back when Ford made a nice little car called the Escort. It even came with spoiler out back an a GT badge. Then came the Focus ST and RS with its drift mode and internets went crazy. Type “focus” into Google and the RS is 4th suggestion that pops up. Maybe the RS page will just redirect to the Bronco page. It works for Mitsubishi, they still sell a vehicle with Eclipse in the name.

  • avatar
    Jackson the cairn

    Jim Hackett was hired to improve the company’s value to investors, with the product mix as the vehicle to achieve that goal.

    “We are committed to taking the appropriate actions to drive profitable growth and maximize the returns of our business over the
    long term,” said Jim Hackett, president and CEO. “Where we can raise the returns of underperforming parts of our business by
    making them more fit, we will. If appropriate returns are not on the horizon, we will shift that capital to where we can play and win.”

    • 0 avatar
      WalterRohrl

      In my mind it’s better to make 8% return on $20billion in sales than to make 12% return on $10billion in sales for example. I think everyone is looking at the profit percentage number but the second part of the equation (total sales and from there the absolute net profit number) is getting lost. But that’s just me…

    • 0 avatar
      Trucky McTruckface

      “If appropriate returns are not on the horizon we will shift that capital to where we can play and win.”

      Looks like Ford just became the new poster child for the follies of shareholder-driven management. It’s like Hackett looked at the dumpster fire Jack Welch created at GE and said “I can top that.”

      • 0 avatar
        dantes_inferno

        > It’s like Hackett looked at the dumpster fire Jack Welch created at GE and said “I can top that.”

        (…as Hackett adds more lighter fluid…)

      • 0 avatar
        tomLU86

        Well said Mr. McTruckface.

        Today’s CEOs have bigger egos than ever.

        In the mid 1960s, for many reasons (some external environment, but MANY due to GM’s actions), GM was making 10% margins, and in every facet of the business, from manufacturing to marketing to design, they were the best–and not just in automotive.

        So, when GM was kicking butt in the early/mid 1960s, what was the ratio of GM CEO and senior exec pay to that of GM workers? Or the ratio to that of the AVERAGE American worker (who made considerably less than a blue-collar person at GM)?

        And what is the ratio of CEO pay to worker pay at ANY of the Big Three now, 2 of which were bailed out, while the 3rd would have gone under had GM not been bailed out?

        And how does this compare to CEO pay at Honda and Toyota, or even Hyundai?

        The Big Three CEOs are overpaid (as are most Fortune 500 CEOs) Maybe while outsourcing plants to Mexico and China, stockholders should outsource the CEOs…

  • avatar
    Pete Zaitcev

    The part that concerns me the most about this news is that Ford is unable to sell sedans at profit, while other automakers are, regardless of that segment shrinking. This observation suggests a company that is run worse than its competitors. But if that is the case, a shift to crossovers isn’t solving the fundamental problem and Ford will lose the CUVs too. Once they lost CUVs like they lost minivans and sedans, what is left? F-150?

  • avatar
    dusterdude

    Overall, makes some sense to me … however, I think they should reconsider the eliminating the Fusion … I know sales are not going in right direction, but it is an underrated vehicle, I predict sales will go up with Ford’s announcement ( time will tell )

  • avatar
    jalop1991

    As soon as the marketers feel comfortable with the concept, and/or as soon as gas prices force the issue, they will let the engineers drop the vehicle low enough so that even a moron will look at it and say, “That’s a station wagon.”

    But the marketers will be burning the midnight oil to convince people that what they’re seeing is the “ALL NEW!” somethingUV that’s easily worth a 15% price premium over the “old, boring, nobody wants it” 2028 Escape.

    And after the wagon, you’ll see them come up with the “BRILLIANT! ALL NEW!” idea to…drop the rear roof down, because nobody needs to haul people like that…but it will be marketed as being easily worth a 15% price premium over the “old boring, nobody wants it” station wagon/somethingUV.

    • 0 avatar
      JDG1980

      Ground clearance is important because roads in many parts of the country are in terrible shape. And dropping the back roofline is one of the reasons *why* no one wants sedans any more – today’s sedans are considerably less practical than those of 20 years ago. Don’t expect these trends to come back.

  • avatar
    thornmark

    The Fusion is sold on price like the Altima – I think the Altima price war made the Fusion unprofitable. Nissan bought share and wrecked the market for players like Ford.

    The midsize market now has the Accord as the top tier w/ the Camry and Mazda6 below and then all the rest. The Fusion does not compete w/ the top three now, altho it did 5 years ago.

    Ford could spend billions on the Fusion and it would be hard for them to rehabilitate the model in the minds of retail buyers.

  • avatar
    Peter Gazis

    4 cars 4 stories

    Fiesta-Uber, Lyft and a good supply of low milage off lease used cars are killing the market for sub-compacts. Add on some safety tech and the rest of the car needs to be made dirt cheap to keep the price low. If the imports want this market let them have it. Will only end up distroying their brand in the long run.

    Focus- will be replaced with something like a Toyota C-HR.

    Fusion-Great car sold well. Too well. Used ones are pilling up on used car lots driving down resale value. With more ariving every day it will take years to clear them out.
    Taurus- Built on the same line as Explorers and Ford dealerships are screaming for more Explorers. Plus the Impala and Charger own the market.

  • avatar
    genuineleather

    Sorry, I don’t buy this “pipeline building” justification for keeping money-losing entry-level cars. Is a Focus with a balky PowerShift transmission and horrendous resale value really an invitation to buy an F-150? Trends change, and brands rise and fall with them; IMO, the only make that sells on its brand image over a specific model’s individual merits is Toyota. Even then, is a middle-aged dude with a boat who drove a Corolla in college going to say, “Nope, don’t want an Expedition or Tahoe, only Sequoia for me! I drive Toyotas.”

    • 0 avatar
      WalterRohrl

      So why can’t (or won’t) they just replace the PowerShift in the Focus with a conventional Automatic or even a CVT? The positive press would be huge.

      Former College Dude with a Corolla that he was happy with and probably traded in on a Camry and then a Highlander who just got a boat will probably look at a Tundra and a Sequoia first since he is already there getting an oil change instead of heading to a dealership he’s never been at. Ford may get the second look but will A) be unfamiliar and B) will have to beat the likely good experiences he’s already had. Dude who had a Corolla in college is likely to already have a value perspective.

    • 0 avatar
      spreadsheet monkey

      Are you asking if people stay loyal to one brand of car? Of course they do!

      There are plenty of people who only ever buy one brand of car throughout their whole life. Get them early, and you’ve got 15-20 potential future purchases throughout the rest of their life.

  • avatar
    whitworth

    I don’t think the “what if gas prices spike” part really factors in to consumer’s decision making process like the media obsesses over. Especially since the difference between car and SUV/Truck is not as drastic as it used to be.

    If gas goes up a dollar a gallon people will more or less make the same vehicle choices.

    If gas really goes up like $5 a gallon (highly unlikely) I could then see a huge shift to electric vehicles and a big change from consumers.

  • avatar
    Jeff S

    Ford should continue to make the Fusion but just make minor cosmetic changes. Ford has already recovered for the tooling costs. Just cut the trim levels down to 2 or 3 but make sure that a base model Fusion is in the lineup and price it just below all the other midsize sedans on the market. Keep the Focus as well but offer it in a 4 door sedan and hatchback. Again offer a base Focus priced just below all the other compacts on the market. Offer these along with the Mustang and at least there will be a car line that covers most peoples needs and wants. If you have to make both the Focus and Fusion in China or Mexico to keep the costs down then do it.

  • avatar
    DIYer

    Hecho en China – About a year ago, Ford announced the Focus would be made in China. I think this is the only reason Ford thinks it can make a profit on the Focus, the car itself isn’t that good and can’t compete with Honda Civic or Toyota Corolla.

    Ford to shift Focus production to China in 2019
    Ian Thibodeau, The Detroit News Published 9:37 a.m. ET June 20, 2017

    Months after Ford Motor Co. earned the praise of President-elect Donald Trump by canceling construction of a plant in Mexico to build the Focus, the automaker announced another big change of plans: Production of the next-generation Focus will be moved to China instead of Mexico, and Ford will import the Chinese-made cars to the U.S.

    This marks the first time Ford will import Chinese-made vehicles to the U.S. Ford says the change in plans will save the company $1 billion.

    The automaker said Tuesday it will start production in the second half of 2019 on the new model at its Changan facility in Chongqing, China. The North American model is currently manufactured at the Michigan Assembly Plant in Wayne, where it will stay until mid-2018.

    It’s the latest change as Ford works to find a place it can make the small car as sales of the vehicle continue to slip and profit margins narrow.

    • 0 avatar
      "scarey"

      Personally, I will NEVER buy a Chinese car or truck. NEVER. I currently own a Ford F-150, a Ford Econoline, and a Jeep Grand Cherokee. The Chinese Foci may sell in California, Hawaii, Massachusetts and other communist strongholds, but not where I live. I have only seen two Chinese “Buicks” around here.

  • avatar
    gearhead77

    When it comes to domestics, I’m a Ford person. I had a 1st gen Focus ZX3 which I loved. I owned an Aerostar briefly for business use and we had multiple Rangers in our family, plus an Econoline conversion van in the mid-80’s. More Blue Ovals than the Mark of Excellence in short.

    I have had a Focus, Fiesta and Taurus as rentals in the recent past. I test drove an Fiesta ST and I wanted to love it, but it was too coarse for me to live with as a DD. I find the regular Fiesta good, depending on what Sync it’s equipped with. It’d be a hard choice between Fiesta and Sonic for subcompact domestic car, but I’d go with the Ford. Those Durashift or whatever dual-clutch transmission fiasco Ford saddled those cars with did not help ( same with Focus) the Fiestas sales.

    The Taurus was OK, but my VW was better over the road than it was at 1/3 the price at least. It’s a big old man car, but all the old men want crossovers now.

    The Focus was fine, but if I had cross-shopped the Focus and my Golf, I’d have still bought the Golf, but narrowly. I already had a Focus, so it would violate my rule of not owning the same car twice. But still, the VW was just slightly better than the Focus.

    To me, this is Ford of the late 90’s and early 00’s all over again except they are being more direct about it. During the SUV boom, Ford concentrated on those and let their cars languish, which was a bad idea when gas went through the roof.

    Now, people want crossovers and Ford will build them. But as others have said, as good as an Escape’s fuel economy might be ( on paper, the hills and traffic patterns where I live are hard on turbo fuel economy) it’s not a Focus. Ecosport is not a Fiesta. Ford is forcing those who want a small car or midsize sedan to someone else who will build them what they want. Quite a gamble when the winds of change blow again.

  • avatar
    danio3834

    Posts like this make me wonder if the management of this site has any real industry understanding or insight. This is mostly conjecture, and ignores some pretty important factors that weigh heavily on the industry.

    CAFE. This trend was set into motion and solidified with Obama EPA era CAFE 2025.

    A fuel price spike won’t make the Focus or Fusion necessarily any more profitable, even if volume would marginally increase. Emphasis on marginally. The cost structure is massively squeezed on cars in this segment because of CAFE, both in potential fines and the expensive investment required to make them compliant. For example, the SAE estimated that CAFE 2025 would add around $5,000 worth of cost per vehicle. The EPA estimated the cost to be $3,000. Even on the low end, this is substantial, crushing, cost addition to vehicles on the low end of the spectrum.

    Ford will still make small and midsize vehicles, they will just meet certain design standards where most configurations can be EPA classified as trucks. The average customer wants something that meets their needs in a given size and price category that performs reasonably well. What it’s classified as segmentation, the history behind it, or the shape of the trunk are irrelevant in the aggregate. Automakers can easily shift most of those driving the sedan form factor into a crossover, which have a better cost structure and transact higher. It’s not so much that demand for affordable sedans just evaporated, it’s that fewer and few automakers are willing to invest in them and have put proportionally more ER&D and marketing into SUVs and crossovers. The market responds.

    • 0 avatar
      dantes_inferno

      >Posts like this make me wonder if the management of this site has any real industry understanding or insight

      What is NO?

    • 0 avatar
      ToddAtlasF1

      “It’s not so much that demand for affordable sedans just evaporated, it’s that fewer and few automakers are willing to invest in them and have put proportionally more ER&D and marketing into SUVs and crossovers. The market responds.”

      And thus Obama just culled a few hundred thousand working class folks from new car ownership while his CAFE regulations created new cars that won’t be economical to operate off-warranty. Success! Isn’t it great when working people vote for Democrats who will look out for their interests?

  • avatar
    sportyaccordy

    There is a lot to chew through here but I think there are two points that need to be addressed:

    1, Ford is losing money on cars in the US. Everything else- potential sales, market share, whatever- is a bit irrelevant. Anything that happens to sell more of these cars means Ford will lose MORE money. If they decontent them to where they can be profitable, they will sell less, and still tie up the same resources and open Ford up to the same liabilities. As crazy as it is getting out of these segments seems to be a no brainer. Ford isn’t in the game to sell cars below cost.

    2 a gas price spike is not going to send crossover/SUV buyers scrambling back to cars. Someone who needs a 3 row vehicle physically can’t go back to a car. And the fuel cost differential between crossovers and sedans that are actually comparable is basically non-existent. The Escape doesn’t compete with the Focus, it competes with the Fusion. With the same powertrains they are within 1 MPG of combined fuel economy. As I said someone who has an Explorer probably cannot practically downsize to a Fusion, but someone with an Escape can. And if a recession hits every car company will be dealt serious body hits.

    I think this is an extreme move by Ford but ultimately it’s the rational one. You can’t run a business on losses and unproven hopeful future gains. Not unless you are Tesla

    • 0 avatar
      ajla

      “Ford is losing money on cars in the US. Everything else- potential sales, market share, whatever- is a bit irrelevant.”

      I think it is relevant that Ford is losing money on its car sales while other manufacturers apparently aren’t.

      They might not be giving Escalade or F-150 Platinum margins but I don’t think we’d be getting a new Altima or Avalon if they were burning cash for Nissan and Toyota.

      • 0 avatar
        danio3834

        “I think it is relevant that Ford is losing money on its car sales while other manufacturers apparently aren’t.”

        They very likely are in many if not most cases in NAFTA. If they aren’t yet, they will be. This trend isn’t over.

        • 0 avatar
          highdesertcat

          That whole NAFTA thing may have a lot to do with the direction of the US auto industry and what vehicles will be available in the future.

        • 0 avatar
          ajla

          I assume FCA makes money on the remaining cars it sells in the US & Canada (Charger/Challenger/300/Giulia/Ghibli/QPorte).

          If, in 2018 not 2025, the only money-making car Ford sells in the US is the Mustang (*maybe catering to enthusiasts isn’t such a bad idea after all*), that seems uniquely bad.

      • 0 avatar
        sportyaccordy

        Ford’s car margins are squeezed by UAW legacy costs on the bottom and the discounts that have to be applied to get customers to buy Fords at the top. Fiesta/Focus/Fusion are objectively no worse than the competition; they just cannot be sold profitably. Untangling all the legacy operating costs and/or convincing people to pay Toyota money for Fords are equally impossible and pointless endeavors.

        • 0 avatar
          highdesertcat

          “Ford’s car margins are squeezed by UAW legacy costs ”

          We can’t say anything bad about the UAW this time around, even though it is true, because President Trump is a union man, bringing back jobs to America and its unions.

          • 0 avatar
            WalterRohrl

            He is? Go ask the folks that worked at Carrier in Indiana that Trump was bragging about how that all worked out for them. Hint: the factory closed down and the jobs went away. Trump hasn’t brought it up…shocking.

            Go ask the automakers and others that work with steel and aluminum what is happening to their margins and eventually jobs so that a few steelworkers can go back to work.

            It seems more like for every union job that maybe comes back more than one is placed into jeopardy.

          • 0 avatar
            Trucky McTruckface

            “Go ask the folks that worked at Carrier in Indiana that Trump was bragging about how that all worked out for them. Hint: the factory closed down and the jobs went away. Trump hasn’t brought it up…shocking.”

            He hasn’t brought it up because the factory didn’t close down. You just made that up. The deal was always to retain half the jobs and that hasn’t changed.

          • 0 avatar
            28-Cars-Later

            I’m not going to defend unions but they are performing actual tasks and generally speaking have real jobs (defined as supporting a family without being on some kind of welfare). Working in an Amazon warehouse is not a real job. Nor Starbucks, Petsmart, Walmart, Uber, or whatever charity or county social worker job for $30K. Will The President’s moves succeed? I don’t really know but its different than the 1995-2016 hollowing out of the nation.

            Next up Mr. President, deport the H1-Bs. I’ll have popcorn ready.

          • 0 avatar
            sportyaccordy

            I can and will say whatever the hell I want. The UAW costs are still a drag on the big 3, hurting their profitability in thin margin segments like compact/midsize sedans. Grind your political axes elsewhere.

        • 0 avatar
          tonycd

          accordy, it’s legitimate to call out that you’re grinding a political axe when the facts you base it on are demonstrably false.

          You’re simply and provably wrong in saying “Fiesta/Focus… are objectively no worse than the competition.” In fact, both models suffered crippling reliability problems to their infotainment system in the early years, and their automatic transmission to this day. Those problems have resulted in clearly inferior outcomes on reliability surveys, especially compared to Corolla and Mazda3, and negative publicity that has driven down both total sales and transaction prices for Ford. These decisions had absolutely nothing to do with “UAW legacy costs.” They were Ford’s own self-inflicted wounds, just as surely as the automatics that shifted themselves into reverse (which would have cost literally three cents a car to prevent), Explorer tire cover-up and Pinto gas tank.

  • avatar
    28-Cars-Later

    This is a big topic and there are many good points here but there are a few I would add:

    Ford is in a dangerous position, it relies too heavily on its F-Series for revenue and profit. I think I read a statistic in the past two years stating 90% of profit came from F-Series and 10% from everything else. Staggering. This is just like Apple with their “phone” accounting for about 65% of revenue. Too many eggs in one basket don’t ya think? So now we’re going to essentially cull everything else and hope the remaining stuff increases revenue and hopefully profit? You’re still pulling far too much out of F-Series I don’t care if its the golden goose of all time or what. One major oil spike and boom.

    carbuzz.com/news/most-profitable-cars-of-all-time-the-ford-f-150

    statista.com/statistics/382260/segments-share-revenue-of-apple/

    Then there’s the whole CAFE vs Cali Communists vs EPA vs The President thing. Ford are you so sure cool heads and sense will prevail? Your product cycle will be in full gear around the time of the next election, and you’re vulnerable on F-Series for both this and oil spikes (GM and Chrysler too). I do understand the strategy but it strikes me as a bit desperate and fraught with risk.

    I have brought up many times how they have crippled the car models on purpose, and Detroit’s especially are mostly terrible. Can’t see, can’t haul humans, some not comfortable for drivers, aesthetics are mostly yuck, hit your head on the roof exiting, still transverse FWD but packed like egg cartons. The whole point of transverse FWD was space in the cabin without a long hood! I don’t want feel like I’m in a packed elevator in my way too expensive purchase. So now I have all of the detriments of FWD without the advantage, are crampt like sardines in a can, can’t see out of it well, still can’t haul adult humans, and if I didn’t order AWD I still have all of the crap for it minus the rear diff and voodoo transaxle.

    Detroit your cars suck for the most part, and those that are kind of ok for the mission have other major flaws. Dart had the horribly weak motor, launched without an automatic, and was too small to be a US sedan. Focus couldn’t figure out the mystery of the working automatic transaxle. Spark and derivatives did not offer enough power or interior accommodations vs competitors. Cruze/Verano might have been the only ones which actually delivered what they promised, for a while. Ironically none of these is really plagued by everything in my earlier rant, but as you move up in class you run into all of those things.

    What has Toyota and Honda consistently done well in Camcord? Interior room! No AWD or transmission humps! Reliable base motors and step up (perhaps until recently)! Line of sight! Decent-value-for-the-money. What do Malibu and Fusion have in common? No V6 and too small to be sedans! Both are midsize coupe size, you really think you can just half measure everything and succeed? My W Grand Prix is not the best for hauling rear passengers because it was not designed to be a sedan but a coupe (GM10 launched as coupes look it up). Why does the purpose designed sedan Fusion have the same problem? Malibu? prior to MY18 Regal? ATS? CTS?

    The C-class cars can get by as sedans too small for adults because they are not intended to be used for serious passenger travel. The bigger more expensive “sedan” damn well better be able to accomplish this mission with ease and poise. Hello McFly!

    Before my rant ends, I will point out the other elephant in the room: proles be broke yo. This “economy” is fake and has been for at least a decade. Fake, fake, fake! Wages have declined for decades vs well everything, but the production cost of everything has skyrocketed. Look at construction, why are no starter homes being built? because the production cost is so high it cannot meet the expected sale pricing and still profit. Why are vehicles so expensive? Same reason! No money in 12K Nissan Micra, in fact the production cost of such a thing should be 4-6K not the probable 9-10 all in. Why? Wages steady but materials costs up and bureaucracy waayyy up. This doesn’t even mention the billions the auto industry is forced to waste on Agenda 21, errrr electric cars no one wants or will buy. Guess what kids, those 30K+ starting prices for golf carts are not coming down. So you can barely afford the Micra on your Fight for $15, but sure you’ll spring for something three times the cost with a battery that will need replaced in less than a decade if not five/six years or less? People cannot afford anything! Society has simply been hollowed out, its the poors and permanent welfare useful idiots, a small percentage of “rich” under the 1%, and anyone still stuck in the middle who is growing poor but can’t qualify for all the freebies. Because as it turns out, welfare is a weapon of mass destruction. Kanye frakkin’ West is talking about this crap for frak’s sake.

    epi.org/publication/charting-wage-stagnation/

    aneconomicsense.org/2015/02/13/why-wages-have-stagnated-while-gdp-has-grown-the-proximate-factors/

    en.wikipedia.org/wiki/Middle-class_squeeze

    In short, Ford I get it but you’re pushing the envelope. Even if today you came out with a sedan which did not suck, its a dwindling market and your product helped make it that way. My advice is you had better have some kind of drivetrain or propulsion system which can enable your giant trucks to deliver better than average fuel economy under light loads in the likely event there is a 1973 moment.

    I would also work on reducing production costs but the reality is its not gonna happen unless you go “This is Sparta!” on the ridiculous bureaucracy which adds 20, 30, maybe 40% cost onto your models? You’ve sort of got a friend at the White House now and he likes to run his mouth to make leftist heads explode. Take out some ads, CARB costs you X%, NHSTA standards after 200x cost you X%, EPA standards after 200X cost you X%, Electric cars nobody buys cost you X%. You can’t fix wage stagnation but if you could figure out a way to build the same thing for less, you’d have some nice wiggle room to undercut everyone else.

    • 0 avatar
      Big Al from Oz

      28-Cars-Later,
      What’s funny is your comment is sort of what I’ve been stating.

      You state Ford is totally reliant of it’s F Series, well, how can it be any different? Or, for that matter GM reliant on the Sierra/Silverado and FCA Ram.

      The whole US vehicle regulatory and tariff regime promotes pickups and their spinoff SUVs.

      You have been one of the people who denounce my view that the US really needs to change it’s course in vehicle manufacturing, that is to remove much of the protection that is encouraging the Big 2.5 to look at other forms of revenue generators, ie, cars.

      The Big 2.5 will not budge from their current position until forced by regulatory and protectionist instruments are wound back.

      You are also against using fuel tax as an instrument in controlling FE.

      28 Cars, I really believe that you need to sit down and understand what viable for the US motoring industry.

      To put it bluntly the US Big 2.5 are not competitive at even building large vehicles. Why is this so?

      • 0 avatar
        dantes_inferno

        >To put it bluntly the US Big 2.5 are not competitive at even building large vehicles. Why is this so?

        For one thing, if you look at the upper management structure of the foreign makes, a majority of those decision-makers usually come from engineering backgrounds, and thus operate with an engineering-oriented philosophy.

        If you look at the upper management of the US Big 2.5, you see MBAs, and thus operate with a bean-counting/finance/business-oriented philosophy.

        Would you trust an engineer or an MBA to design/build your vehicle?

        • 0 avatar
          28-Cars-Later

          @dantes_inferno

          Excellent point, I heard something similar about Boeing in the glory days vs the 787 development period. Much of the product from the days when upper management were lifers who started as aircraft engineers is still being sold (747, 737) and still flying. Hell, the DC-8 is used in limited capacity for cargo transport. B-52 still flys for USAF. Both late 50’s designs.

          https://en.wikipedia.org/wiki/Douglas_DC-8

        • 0 avatar
          ra_pro

          Why not take this a level up? Why do American companies promote MBAs by-and-large over product experts? MBAs are not even accountants, they are a cheap version of an accountant.

          It’s simple; America is all about money now, today, this month, this quarter. What happens after that? Nobody cares. American companies are not in business to create and supply a well-designed, well-produced and well-supported product. They are in business to make money, correct? If you’re in a business to make money it only makes sense that you select money-professional not product professional to lead your business. MBAs can be good at cost side of the business but they are not and can never be any good at the other end, the product side of the business.

          Hence who is at fault? I’d say American culture, psyche, thinking, even way of life.

          28… you failed to notice that your president exemplifies this approach to business more than anything else at this point. He is not a developer or even a business-man. He wasn’t very good at that, most of his ventures failed. He is a brand, he is an image, he applied for brand license of his name in China! What is more hollow than an empty image (an apparently he is emptier than a vacuum tube)? And that’s where America is heading, a branding economy, image economy, marketing economy. In other words not a real economy, just something that looks like an economy.

    • 0 avatar
      ajla

      “I will point out the other elephant in the room: proles be broke yo”

      Nah, it’s all good man. Spending 105% of your gross income on vehicle is fine.

      gobankingrates.com/loans/crazy-96-month-auto-loan/

    • 0 avatar
      sportyaccordy

      Only Ford with rear headroom issues is the Fusion, and they were selling as many as 300K a year at one point. Transmission aside the Focus is as good as or better than most compacts. That very same Focus is like the #2 selling car in the UK, where I’d argue automotive standards are higher.

      In short, Ford’s cars don’t “suck”. Market & legacy forces kill their cars’ profitability in the US, prompting this move. A lot of people are dumping on Ford’s management for this, but it’s becoming more and more obvious that many wouldn’t know good management if it hit them over the head with a 2 by 4. Acknowledging when to admit defeat and move accordingly is a hallmark of good management.

      • 0 avatar
        ajla

        “Transmission aside…”

        That’s a pretty important “aside” though. Consumer Reports last auto issue gave the Focus a reliability score of 6 out of 100 (for comparison the Cruze got an 89 and the Corolla got an 86). I think it was the lowest rated car in the entire magazine. JD Power also puts it dead last in class for dependability and below average in owner satisfaction.

        On top of that it is apparently the highest cost vehicle in its class for its manufacturer to build.

        And you can pretty much ‘ditto’ all that above for the Fiesta.

        Admitting defeat is one thing. Causing defeat is another.

      • 0 avatar
        28-Cars-Later

        A Focus/Fiesta without a correctly working automatic transaxle does suck. The manuals work well from what I have read but in the US less than 3% of all cars are sold as such. This is a huge fail and shows how you can’t be sloppy selling a Euro centric car in the USDM.

        Have you ever sat in the 10+ Taurus? Ye gods its almost as if they attempted to do everything wrong on purpose. The MKS was a bit better, which proves the Taurus mistakes were by choice, although MKS was never intended to be a volume model. Has Ford simply continued the Panther tradition of large car with small interior space? How did that work last time?

        The Fusion did sell well for a time for whatever reason, but it has petered out and has some of the drawbacks I alluded too earlier. Even if Fusion were to be sufficiently remedied, I think the Rubicon has been crossed and Ford mgt agrees. Pity.

        “That very same Focus is like the #2 selling car in the UK, where I’d argue automotive standards are higher”

        They may well be, however in the UK a majority of cars sold are sold with a manual transmission. The Focus transaxle issue centered around automatics. This post elaborates:

        “In the UK – you can get a license for driving a manual car, which also allows you to drive an automatic. However, If you take your test in an automatic, you will only get an automatic license so you can’t drive a manual.

        Therefore most people’s first cars tend to be a manual as this is the license you ideally want (to give you more driving options). Car or van rental companies rarely offer an automatic version, so this is essential if you ever want to rent, or borrow a friends car.”

        quora.com/Why-does-Britain-tend-to-use-manual-cars-rather-than-automatic-as-most-other-countries-e-g-the-USA-do

        “In the UK, and despite the hype surrounding the supposed death of the manual transmission and the inexorable rise of the flappy-paddle gearbox, some 75 per cent of the 1.8 million new cars that were bought before 20 October this year had, yes, a manual ’box. In other words, only a quarter of new cars sold in the UK this year were automatics, and by no means all of those have flappy paddles”

        autocar.co.uk/car-news/industry/death-manual-gearboxd even fewer are full-blown dual-clutch autos.”

        latimes.com/business/autos/laautoshow/la-fi-hy-disappearing-stick-shift-20161115-story.html

      • 0 avatar
        syncro87

        sporty,

        I don’t totally disagree with you that Ford has reason to do what they’re doing.

        At the same time, I think more of their problem selling cars is their own fault than you do.

        Focus: We owned a 2005 Focus. When we replaced it, we bought a Civic. Why? Two reasons. 1) deal-breaker, bonehead auto trans 2) rear seat legroom unsuitable for anyone larger than the late Verne Troyer. The Focus is/was totally too small in the back passenger quarters, and this is a fatal flaw in this segment. The Focus sold poorly because Ford completely hobbled it with a kiss of death trans and cramped interior.

        Taurus: I don’t even know where to start on this one. Few people shopping for a mid or full size sedan want something with incredibly sub-par interior packaging, high belt line, Siegfried Line gun slit visibility, truck-like slab sides. The sixth-gen Taurus went against most everything that made the car a best seller for years. Ford botched this one.

        The sedan segment is down, for sure. However, Ford shot themselves in the foot with the Focus and Taurus by making some really bad decisions. Had the products been class leading in their respective segments, they could have made it. Poor execution has as much to do with things as the segment shrinking. Taurus shoppers took a look at the car and said, wow, this thing is nothing like what I want. Focus shoppers said, hey, I heard the transmission in this car is terrible (ponders scratching it off their shopping list). Sits in the back seat or tries to fit a child seat in there, then does scratch it off the shopping list.

  • avatar
    russification

    why can t they just erect a large antenna mast over every major market and beam an evil empire tractor beam of death into every forthcoming vehicle. rebadge themselves as a fresh new religious denomination, requiring only the whites of their eyes, and no irises, and you have a best seller my friend with more new customers than you can shake a stick at.

  • avatar
    WallMeerkat

    It’s a similar tactic that Nissan Europe employed a while back, axing the Focus/Fusion sized Almera and Primera (albeit keeping the Fiesta sized Micra). Worked out well for them, the Qashqai (Rogue sport) is a top seller as is the strangely styled Juke.

    Eventually they brought back the Pulsar as their Focus-size competitor, but it doesn’t sell well.

  • avatar
    tallguy130

    I feel like the real big story in all this is ford can’t make a profit on cars. Really!? If I was a shareholder this would be a huge red flag for me about the direction and management of this company. Presumably every other automaker can still do that with cars to some extent, what’s going on at ford that they can’t?

  • avatar
    Daniel J

    I find this interesting as I am currently in the car market. My 2010 Mazda 6 is getting long in the tooth. The Accord and Regal Sportback are the two right now I’m interested in. The Camry is out of the picture mainly due Entune issues. I’ve test driven the Mazda 6 and I think its a really nice car, but it just doesn’t have enough legroom. The fusion never crossed my radar, mainly because its just an older platform and I never cared for its looks even when it first came out.

    We have a CX-5, and I just don’t see it as a replacement for a sedan. For city driving its fine. Its just not a great “touring” vehicle.

  • avatar
    RSF

    This is what I’d do if I were in charge:
    Cars:
    Fiesta: Cut it because no one deserves to drive a car so small.
    Focus: Redesign and eliminate the turd transmission. Have and ice version and a full electric that makes people forget about the Bolt and Model 3.
    Fusion: Refresh for now. Keep a hybrid version
    C Max: cut
    Mustang: Keep on keeping on..
    Taurus: Cut

    SUVs:
    Ecosport: Cut it, like TODAY. We can’t do better than this? Come on..
    Escape: Keep
    Transit Connect: Keep
    Edge: Keep
    Flex: Cut
    Explorer: Keep
    Expedition: Keep

    Trucks:
    Keep them all

    Lincoln:
    MKZ: Keep but give it a name. Keep a hybrid version
    Continental: Keep. Make this the Full Electric to blow away Tesla. Get whoever designed the Aviator to design this.
    Nautilus, Aviator: Get them to market asap.
    Navigator: Keep and keep it current.

    Also, Ford and Lincoln will be known for consistent quality.

  • avatar
    EX35

    Anyone think this will cause resale values of Ford cars to plummet (even more than they have)? Would love to pick up a late model Fusion for pennies on the dollar since it is a decent car.

    • 0 avatar
      28-Cars-Later

      You are correct, anything discontinued typically drops 10% on the block. The issue here is, the one model which for sure is being discontinued (Taurus) has a lot of ownership drawbacks. This is much different than years back when half decent stuff was fire sale’d. A manual Focus is already a nice buy for what it is, but you’ll have a tough time unloading it to owner three. If Fusion goes, it might be a nice buy. I personally won’t touch one, I would go to the 10-12 MKZephyr if I wanted a CD3 and wait a year or so for the 15-16 V6 Zephyr CD4 (don’t buy MY13-14).

  • avatar
    tylanner

    We shouldn’t attribute this dramatic refocus to market changes….but rather Fords mismanagement and inability to produce a good products in segments that sell millions of cars…

    Ford thrived in an era when you walk down the block to your local car dealer, go in sit down and buy a car…but consumers are infinitely more discerning and informed today…and when you have bad products they get exposed…

    This was a necessary fix to amputate the cancerous limb before it infects other brand staples like the F150…

  • avatar
    trout

    I have owned 2 FiSTs. The writers here are correct, they are fun as hell. And they would probably agree that they are cheap as hell. The interior of the Fiesta commands some of the cheapest plastic known to man, and looks like it was designed by a junior high school kid. If the rest of Ford’s lineup is like that, well…

    That being said, I have never had a problem with either FiST, and I beat them like rented mules. They are too fun not to.

  • avatar
    ra_pro

    I think there are 2 main trends in the post here.

    1) Ford has done a good thing, no point in throwing good money after bad money.
    2) Ford has done itself a lot of damage in the long run. Gas prices may swing up at any time and they will not have the right product when that happens. Beyond that it says volumes about a company that cannot make money on cars in the largest car market in the world albeit shrinking one.

    I think these 2 are not mutually exclusive and in fact are kind of consistent. If you perspective is short-term they have done what they had to do but if you look at it long term they have done the opposite.

    But in life neither perspective is better than the other one. In the short term Ford will profit literally and figuratively, in the long run it may not survive.

  • avatar
    Len_A

    “Ford has financial concerns, no doubt.” Enough that last summer/fall, they promised shareholders, Ford family and non Ford family, that they were taking $18 billion in costs out of the company.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Corey Lewis: I am a VERY careful eater in the car. Took my time, had all the time I needed to eat slowly and with no...
  • Corey Lewis: I believe so. I am sorta unsure with the engine being in the Camry and all.
  • Secret Hi5: Premium >91 octane is required, correct? i.e. Not just a recommendation, but a requirement.
  • MoparRocker74: McDonalds and Taco Bell seated in white leather on a 1000 mile roadtrip…we have ourselves a...
  • redgolf: so it’s also a “smart” car too!

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Timothy Cain, Canada
  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States