By on May 10, 2018

Anyone hoping to glean specifics about upcoming products during Ford Motor Company’s annual shareholder’s meeting likely walked away unsatisfied. During the Thursday meeting, the company’s leaders touted Ford’s plan to freshen its lineup and align its products with changing American tastes.

Killing off the Fiesta, Focus, Fusion, and Taurus was necessary, CEO Jim Hackett claimed, adding that the decision doesn’t mean the company plans to leave those buyers in the lurch.

“We want to give them what they’re telling us they really want,” he said. “We’re simply reinventing the American car.”

As Automotive News, which reported on the meeting, points out, that remark came in response to criticism over the loss of cars meant to appeal to entry-level buyers. It’s true that sales of Ford small cars were on the wane, but not everyone’s in the market for a subcompact EcoSport that nearly kisses the $20k mark before delivery and nets 29 mpg on the highway.

The company’s upcoming Focus Active (a cladded five-door with a 1.2-inch suspension lift) will soon be the only small car in the brand’s lineup, with the exception of the Mustang. Considering a 2018 Focus SE hatch retails for $20,540 before delivery, it’s unlikely the Active will come in any cheaper. Hacket didn’t divulge what “reinvented” cars might appear.

“We don’t want anyone to think we’re leaving anything,” Hackett said. “We’re just moving to a modern version. This is an exciting new generation of vehicles coming from Ford.”

Besides the culling of the sedan lineup and a looming explosion of light truck models, the automaker hasn’t spent much time talking about the bottom of its lineup. With pricier trucks and SUVs as its bread and butter, maybe it doesn’t have to. It has mentioned, however, that it plans to continue adding models in different segments and at different price points. Will there be additional crossover-ized cars, perhaps one that slots below the Focus Active? Or is Ford just talking about the upcoming Ranger pickup, Bronco SUV, “baby Bronco” crossover, electric Model E crossover, electric performance crossover (originally dubbed the “Mach 1”), and Focus Active? Time will tell.

We’ll also have to wait and see what happens to Lincoln’s cars. Ford remains tight-lipped about the fate of the Fusion-based MKZ and flagship Continental, despite two recent reports — one claiming the model’s toast, the other claiming a retro-inspired successor is in the early stages of development. Hell, we’re still unclear as to when exactly the Fusion bows out of the lineup.

The Continental will continue “through its life cycle,” Hackett said, without mentioning a new generation.

For now, Ford’s, ahem, focus remains on getting those higher profit trucks and SUVs out the door and reaching its $25.5 billion cost-cutting goal by 2022. Then there’s the issue of Ford’s stock price, which can’t seem to gain any upward momentum. Executive chairman Bill Ford said he shared the frustration of shareholders.

“Look, we want to get the stock price moving,” he said. “The business can get fitter, and it will get fitter.”

[Image: Ford Motor Company]

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65 Comments on “Ford CEO Vague on Car Replacement Plans; Lincoln Continental’s Future Still in Limbo...”


  • avatar
    DeadWeight

    I’ve issued a CODE BLUE on Ford Motor Company.

    Ford is at imminent risk of a severe downward spiral financially.

    HACKett is an infection that will prove fatal to Ford if not removed soon, and Farley will also need to go.

    It’s straight up plain to all to see who possess common sense, which is sorely lacking amongst the Ford Heirs, apparently.

    • 0 avatar
      TwoBelugas

      Funny story, I bought some FCA stock not too long before they dropped the 200 and the Dart. Their share price now is up about 115% since I bought it. I did as kind of a joke but it’s one of my best performing stock in recent years.

    • 0 avatar
      mike978

      He should be called Hatchett. He has no clue or experience in the auto business. How was he selected?

      • 0 avatar

        Who has experience these days? Did Obama had experience in anything other than activism? Or Trump? Both were elected nevertheless and not once. It is the age of dilettantes.

        • 0 avatar
          tonycd

          The “vague” headline here is a bit misleading.

          I don’t hear anything in Hackett’s comments that contradicts the “no more sedans” announcement in any way. When he says “We want to give them what they’re telling us they really want,” or “We’re simply reinventing the American car,” or “We don’t want anyone to think we’re leaving anything,” he’s simply inviting anyone who’s willing to spend their money on what Ford will be selling.

    • 0 avatar
      Peter Gazis

      @DeadWeight

      Ford & FCA are probably making plans on how to divide up Hyundai/KIA after it goes broke.

    • 0 avatar

      Yeah exciting new something but no car is coming from Ford. We have to wait to see what it might be – flying vehicle? Knowing Ford’s history in all its gory details prepare for more troubles ahead. Lew Veraldi’s Taurus driven renaissance did not last long, did it? Veraldi was dismissed just like Fields. I knew that Mulally driven renaissance will not last long either after he left company. And that’s what exactly happened. Yeah of course nobody needs cars, especially me. Do I need car? No. Not from Ford anymore.

    • 0 avatar
      Big Al from Oz

      DeadWeight,
      All I can say is I told many on this and other sites years ago.

      It comes down to the US’es position on vehicle manufacturing.

      The Big 3 are unable to produce vehicles that are competitive. Period. Hence fullsize pickups and pickup truck station wagons. They are cheap, nasty and no one else makes them.

      So, the Big 3 can charge what they want, so long as it’s within the 25% tax advantage given and built with America’s unique design standards.

  • avatar
    Maxb49

    Ford is in deep shit with Hackett in charge. The Ford family better get rid of him before the company is in ruins.

  • avatar
    junkandfrunk

    It’s all about the share price. Build, market, sell high-margin only. Lots of margin to show to Wall Street. But what happens when the economy goes back into the toilet and people don’t want to buy high-margin SUVs anymore? Short term gains, long term defeats.

    • 0 avatar
      dwford

      They somehow think that discontinuing low margin vehicles to increase profitability will help the share price. Ford has made countless billions over the last 9 years, and the stock price has FALLEN. it’s not about the profits – they already have plenty of profits.

      Running from still huge market segments will only make investors more concerned about whether Ford management has a clue about what they are doing.

      Also, aside from stopping the development of the next Fusion, there is NO savings form not bringing the Fiesta or more versions of the Focus here. Those cars were already designed for the US market anyway.

      • 0 avatar
        Peter Gazis

        @dwford

        Yesterday, Toyota reported that they lost money in North America during the 1st quarter of the year. If they can’t make money with a brand new completely redesigned Camry, how do you expect Ford to make money on a 5 year old Fusion?

      • 0 avatar
        sportyaccordy

        The Focus/Fiesta were designed for the whole world. Selling them here = selling them at a loss, so of course there are savings in not bringing them over. If market conditions change Ford can quickly federalize and bring them over.

    • 0 avatar
      sportyaccordy

      If we have another recession, everybody dies. Forget about cars vs SUVs. The American auto industry will spiral into another existential crisis, only without the out of a government lifeline. Car sales plummeted during the last recession too… they’d probably do even worse than high riders the next time around.

      • 0 avatar
        tonycd

        Agree, sporty. Except for the idea that car sales will tank worse than SUVs in the next depression circa 2023. People will go for the lowest-cost choices, and those will be compact sedans and down. You can already see the start of this trend in the growth of the Corolla/Sentra/Civic class at the expense of midsize sedans, and the growth of those compacts’ back seats for family duty. There’s no other explanation for why the utterly wretched Sentra is selling as fast as Nissan can issue you a high-interest loan to finance one.

    • 0 avatar
      Big Al from Oz

      junkandfrunk,
      You are correct about the shareprice and the high margin vehicles the Big Three want to manufacture in the US.

      But why? Why is it the Big 3 are most competitive within the US (NA). Outside of the US the Big 3 seem to be not as competitive as their peers.

      It might have something to do with the way in which the Big 3 run their businesses. Trump’s argument that US vehicles are penalised outside of the US is pure bullsh!t. Every other manufacturer must contend with the same rules, it’s a level playing field.

  • avatar
    tallguy130

    Again, i can’t get my head around them “not being able to make a profit” on cars. Really!? Not a dime to be made on the 200k plus cars they sold in America yearly? Why is everyone else able to make money on cars? What is it about Fords management, design or build process that prevents them from making money moving that many units?

    Also, is the assumption that having no lower cost (sub $20k) products to get people into the brand won’t be an issue long term? I thought that was a big part of building smaller cars. So the consumer would out grow his Focus and buy an Edge or Explorer when the time came?

    It all just makes me not want to own Ford stock. None of this smells right.

    • 0 avatar
      TwoBelugas

      Simple

      CAFE 2025.

      Feel free to go and look up how many MPG a corolla sized car has to make by 2025 an get back to us if Toyota can make money on it then.

      It’s always good to look ahead 7 years.

      • 0 avatar
        tallguy130

        Ok, so Ford is the first automaker to cry uncle. Honestly that’s the best theory I’ve read on what is taking place but I still don’t buy it.

        Why not make hay till 2025? If it’s that hard of a mark to hit everyone will likely fail also and the target will be adjusted. Or electrify a core product like the Fusion?

        • 0 avatar
          Lou_BC

          “Ok, so Ford is the first automaker to cry uncle”

          Nope.

          Sergio “the sweater” Marchionne was the first one to see the light.

        • 0 avatar
          TwoBelugas

          “Why not make hay till 2025?”

          Why devote valuable dealer lot space, assembly lines, workers, and supplier contracts to dead cars when you can switch to higher margin vehicles now?

          “Honestly that’s the best theory I’ve read on what is taking place but I still don’t buy it.”

          I’m not selling you anything and neither should Ford try to convince you if you can’t believe regulatory realities. Did you look up what MPG a Focus would have to make in 2025?

          • 0 avatar
            HotPotato

            Those MPG figures are all but meaningless given the wide variety of offsets available, from 48-volt fake-hybrids to E85 fueling capability that will NEVER BE USED. This is going to be the same movie we saw years ago, all over again: Detroit thinks SUVs are free money and pays attention to nothing else, a war jacks up fuel prices, Detroit is in trouble because its economical cars are either garbage or don’t exist. They don’t learn.

      • 0 avatar
        highdesertcat

        TwoBelugas, there’s still hope that CAFE 2025 will be repealed and not replaced.

        And that President Trump will go to war against CARB in the courts.

        I read that EPA Secretary Pruitt is working on all sorts of ways to repeal or nullify regulations of the previous administration.

        So far, the current administration has been highly successful in undoing the damage done by the previous administration, although only the real biggies make it to the news cycle, even on the Fake News outlets.

        Biggies like pulling out of the Iran deal, dropping of the individual Health Care mandate, etc, where the importance of CARB and CAFE 2025 pales by comparison.

        • 0 avatar
          TwoBelugas

          “there’s still hope that CAFE 2025 will be repealed and not replaced.”

          I agree and I really hope that is the case. However Ford’s bet is a rational one. There are two possible outcomes to this regulatory fiasco:

          (1) CAFE 2025 goes away or dramatically reduced. In which case Ford’s conventional ICE SUV and Trucks suddenly just became more profitable without the looming fuel economy penalties. And they can bring Fiestas and Focus here from Thailand or wherever else when market wants them. Meanwhile Toyota can figure out how to electrify their Corollas for under 20k. Remember that even Prius C will have a hard time passing CAFE 2025.

          (2) worst case scenario CAFE 2025 stays as is, in which case they continue onto electrification of higher margin crossovers what will get 40+ MPGe without breaking a sweat. And young people with families would still want higher vehicles that they can put little Jaydens and Olivias in without pulling their back.

          Now don’t get me wrong, I am a fan of their hatchbacks and shopping for a Fiesta as we speak.

          • 0 avatar
            highdesertcat

            “I am a fan of their hatchbacks and shopping for a Fiesta as we speak.”

            I hope you find one that exceeds your hopes and dreams and is attainable.

            I am a fervent proponent of people driving what they love, even if it is an EV, PEV or Hybrid.

            At the current rate I honestly don’t know if I’ll ever buy another Tundra because we travel so much out of the US every year.

            Eventually our Sequoia will wear out and will need to be replaced.

            So if I should need to buy another vehicle I hope that the 5.7L Tundra V8 will still be available.

            If CA had their way, even our pickup trucks would be EVs.

            And that’s not acceptable to me. Gotta have a V8!

            It’s in my blood. It’s in my bones.

          • 0 avatar
            TwoBelugas

            I should probably mention that what constitutes my two belugas, one is a Ram HD with a Hemi and one is a Ford sedan with a Modular V8. The hatchback will be for running to the store and parking in ever shrinking city parking lots. As a 3/4 ton pickup owner I don’t have hate for hatchbacks, but boy oh boy do hatchback fanatics have hate for pickups. LOL.

          • 0 avatar
            DenverMike

            I’ll stick with V8s (in whatever they’re wrapped in) until they pry them out of my cold…” No one can prove to me there’s anything better, all things considered, not even close.

            Everything else feels chintzy, sounds cheesy, and fails to invoke confidence. I always leave the stock exhaust, but if they want to include factory “headers”, I won’t complain.

            It’s not just that wheezy engines don’t give off a “quality” vibe, starting it up, building speed, and do they honestly want me to spend $50K (or more!) on something shiny and new, without a V8?

            Yep, I’m used to engines you never have to think about. Ever. Oil changes? Maybe not even that!

            Show me another engine that’s still ready for more, long after the car’s sorry carcass is ready for a slow boat to china. I’ll wait here..

          • 0 avatar
            DenverMike

            The whole “Growing with the Brand” thing is antiquated. Let’s put it to death, along with the “Halo Car” wive’s tale.

            Maybe those things worked a long time ago, or it could still work out for Toyota, putting (investing in) 1st time (new car) buyers in simple, basic compact sedans.

            Basically a long term (long-con) investment, but there’s really no guarantee 2nd/3rd/4th time buyers will stick with the same brand that sold them their 1st new car, especially over at Ford and GM.

            As to “why” Ford can’t clear a decent profit on basic sedans, who cares? It’s clear they’re not, or they would stick with them. And obviously it’s not worth fighting it out with Toyota, Honda and others for the left-over scraps. And fleets.

            So soon you’ll have to go elsewhere for your compact sedans, I’m sure you’ll survive. And Ford will survive without smaller sedan buyers. Just like McDonald’s without tacos and chile rellenos.

          • 0 avatar
            tonycd

            Belugas, you still think global warming isn’t real, huh?

            I have two friends in Miami who report the sea level has already risen so noticeably, structures on the shore are now getting routinely swamped. That means sea levels are rising in coastal cities around the world, and very many of the world’s biggest cities are coastal. Meanwhile, the Arctic Ocean is becoming entirely clear of ice for the first time in thousands of years, and the Antarctic ice shelf is starting to collapse from beneath in gigantic chunks.

            Which of these events do you think are “fake” or destined to stop by themselves without a change in human emission rates? Stopping efforts to slow hydrocarbon belching are not something I’d characterize with the word “hope.” Rather more the opposite.

        • 0 avatar
          DenverMike

          Ocean levels have been rising by about 7 inches for the past several centuries, and I don’t know why I find it hard to feel sorry for those owning ocean front property, at or near sea level.

          You have to really love water.

          Except it’s better than owning a home below sea level, along or close to the coast. I find that amusing. Same as having a home siting on a natural flood plane.

          • 0 avatar
            highdesertcat

            What a lot of alarmists overlook is that “climate change” has been on-going for 4.5 Billion years.

            Over the last million years, every ten thousand years or so our planet had an ice age with glaciers, and today we are due for a gradual warming for the next 5000 years or so.

            What concerns me much more, and I’m not a tree hugging enviro-freak, is all the trees, forest, jungles, and plants that have been cut down, destroyed, burned, or otherwise terminated all over the planet to accommodate civilization.

            We needed those to exchange carbon dioxide into oxygen through the plant (chlorophyll) process.

            Add to that all the nuclear weapons that were tested in the atmosphere since 1945 by the US, Russia, France, the UK and China, and it is no wonder that cancer is eventually going to get all of us, if something else doesn’t kill us first.

      • 0 avatar
        Big Al from Oz

        TwoBelugas,
        Why is it only US (Big 3) manufacturers seem to struggle with CAFE more than the Asian or Euro manufacturers?

        I believe it’s more like the Big 3 just can’t compete as well as others.

        Maybe it’s the way US manufacturers do business??

  • avatar
    Lou_BC

    ““not being able to make a profit” on cars.”

    I’d say that it is about not being able to make ENOUGH profit on cars.

    To be a devil’s advocate, most vehicle buyers are just consumers looking for an appliance that fits their needs. A SUV/CUV just happens to appear to be more bang for the buck than a car.

    Vehicle enthusiasts will buy what fits their interests. My interests don’t include cars and other than the Mustang, Ford is sh!tty at building them therefore I’m not traumatized by this news.

    As far as Ford not being ready for the next downturn, car companies are myopic and “too big to fail” is ingrained into corporate executive mentalities.

    • 0 avatar
      Big Al from Oz

      Lou,
      I’ve been over this before. The US Big 3 just can’t do much more than a few niche vehicles and fullsize pickups that no else on the planet will make and their related pickup truck station wagons.

      As I’ve been stating for a while now, the US needs to remove the chicken tax, become a signatory to the UNECE vehicle system of regulations.

      Then, the US will become competitive, because it has to.

  • avatar
    JMII

    Lincoln slaps badges on Fords so I don’t see how Lincoln continues with “cars” if Ford doesn’t given them any to play with. If Ford can’t make money on the Fusion then how much further upmarket must the MKZ go to become profitable? Lincoln has got to make serious (read: expensive) luxury cars to get the profits to a point where Ford feels making a car is worth it. Given Lincoln’s lower sales volumes that is going to be a tall order.

    • 0 avatar
      Rocket

      Ford is only giving up on sedans here. Assuming they factor US regulations in their designs, they can always import sedans from elsewhere if the market miraculous turns back toward conventional 3-box cars. (It won’t.) And if Lincoln continues offering the Continental and MKZ (or whatever its replacement will be called) here, I won’t be surprised if they’ll eventually import them from China where they’ll also continue to be offered.

    • 0 avatar
      sportyaccordy

      An MKZ is a higher margin Fusion with decent volume. I don’t see it going anywhere.

  • avatar
    Gardiner Westbound

    It’s a “what have you done for me lately” world. Ford’s 2017 pretax profit fell to US$8.4-billion from US$10.3-billion. Wall Street rewards CEO short-term thinking. Cutting sedans will save more than US$11-billion in replacement development costs.

  • avatar
    Hummer

    I’m going to take a different approach than everyone else and commend Ford for this move. This actually makes sense and is one of the few sensible moves I’ve ever seen out of FoMoCo.

    Face it people, outside of the Mustang, Ford cars suck. I don’t mean that they aren’t preferable to brand a or brand b, I mean they are absolutely terrible to get stuck with. I turned away a Hybrid fusion a week ago for rent… for a Kia. I just couldn’t take the Fusion, it’s real damning of Ford cars when you take a Kia over them. Horrible to look at, outside of a few overpriced trims they are miserably slow, horrible places to spend time, DCT, rattly, horrible QC on part fitment and multiple recalls – oh did I mention slow enough to double check your not in an 80s Malaise special?

    This is the best possible move Ford could have taken to save face. I hope GM is next because their lineup is no better. FCA’s plan to get rid of shoddy disposable front drives looks better everyday.

    GM needs a midsize based on the Alpha for Chevrolet and Buick, and a fullsize based on an updated Zeta for Chevrolet, Buick, and Cadillac. Everything else can be cut off and abandoned as far as cars go. There’s no reason to keep chasing a dying segment filled with brand image killing entrants.

    • 0 avatar
      mike978

      Wow you have some bizarre views. The Fusion is a good car and sell well at retail. The focus is just old and they have a US ready model to come, but won’t.

      • 0 avatar
        gmichaelj

        I’m surprised they couldn’t make the Fusion work. The Fiesta, C-Max and Taurus, ok, but the Fusion seemed competitive to me.

        • 0 avatar
          Scoutdude

          The Fiesta and C-Max shouldn’t have even been brought to the US in the first place. The Taurus’ time was up as very few people with the money for such a car are not buying cars.

    • 0 avatar

      @Hummer: What you are talking about? Ford makes great cars. I would prefer them to any Toyota or Honda or Mazda for that matter. May be VW makes better cars. Audi certainly does. But it does not mean Ford cars suck. Audi is more expensive too you know.

      • 0 avatar
        Peter Gazis

        If I was going to buy a new car today my choices would be

        Large sedan
        1. Impala
        2. Taurus
        Midsized sedan
        1. V6 Fusion
        2. Accord
        3. Malibu
        Compact
        Civic or Cruze (toss up)
        3. Focus
        Sub-compact
        Fit or Sonic (toss up)

        Toyota needs to get rid of their crappy entune infotainment system for me to even consider buying one.

        Hyundai/KIA, Nissan built to cheaply don’t think the vehicles will last.

        Mazda – Small Trunk & Backseat.

        VW – having to go back to the dealership for everything makes maintenance costs very expensive.

    • 0 avatar
      sportyaccordy

      I’ve had various Focus rentals and I thought they were all pretty good. Powershift and all. For the record the Fusion has a regular planetary 6AT. At least know what you’re bashing lol.

      Powershift is what really did the Fiesta/Focus in; changing market tastes did the Fusion on. Add Ford’s shaky brand reputation in the car world, an addiction to incentives, and high legacy costs, it’s a no brainer.

      For what it’s worth, Hyundai/Kia are in just as dire straits as Ford in the mainstream car realm, only with the added stress of not having an F-150 to keep the lights on.

      • 0 avatar
        tonycd

        Sporty, this is the second time in this thread I’ve seen the assertion that Hyundai/Kia is in deep existential trouble.

        I don’t think this is true, not by a long shot. They have two key advantages Ford doesn’t. First, Hyundai is a gigantic corporation in shipbuilding and other industries, and cars are just a sideline for them. Second, they own their home market, and Ford has just proven anew it can’t say that.

  • avatar
    plee

    Once the supply of one to three year old Ford cars dries up at the auction, what are the dealers going to stock, used Corollas and Cruzes? The auction I work at part time had a Ford factory sale today, approximately 75 to 80% sold. Many units were Fusions, Focus etc. Ford dealers stock up on these to have for their used car business and these are priced lower than used SUVs. So Ford is asking their dealers to give up this part of the business? This is a head scratcher.

    • 0 avatar
      TwoBelugas

      “Once the supply of one to three year old Ford cars dries up at the auction, what are the dealers going to stock, used Corollas and Cruzes”

      Yes. Ford dealer will just buy auction cars and sell them like a GM or Toyota dealer does. What? Do yo think Ford dealers only sell Fords for used cars?

      • 0 avatar
        Big Al from Oz

        TwoBelugas,
        I think he meant Ford dealers must buy used cars as they will be the only cars available to attract customers through the door.

    • 0 avatar
      brn

      They’re going to stick used SUVs/CUVs, just like they do now.

      We helped a relative buy a used car about two weeks ago. We went to a Ford dealer. Their inventory of used cars was maybe 20% of their used inventory. Lots of SUVs/CUVs.

  • avatar
    Jeff S

    I don’t disagree with Ford’s decision. I have owned a couple of Ford cars and overall they were good. I doubt I will ever buy another car and obviously I am not in the minority. If Ford does go down the drain it won’t be because of lack of cars. I doubt Ford will go out of business and if it did it wouldn’t happen anytime soon. Ford has enough truck and suv sales that they should be profitable for years even with a downturn in truck sales. Ford has enough crossovers of all sizes and prices that they should be able to cover most types of buyers including those starting out with their first new vehicle.

    • 0 avatar
      TwoBelugas

      Ford needs to look back and see why some of their most trusted nameplates like the Panther enjoyed a reputation for being reliable only after years of neglect, it’s not like they were particularly carefully engineered by the personal staff of the Toyodas on top of Mount Fuji, instead it was in large part thanks to the neglect of the Mullaly era that allowed the supply chain to stabilize and the assembly line to work out the bugs over time. SPC works on sample size and the longer you allow a part to be produced without altering the spec, the better the consistency can be monitored.

      Heck even Chrysler is making rather reliable full size cars now precisely because they don’t shake things up very often. The award of the don’t-fix-if-ain’t-broken doctrine goes to Toyota, their most reliable names are all ancient in the context of modern cars.

  • avatar
    28-Cars-Later

    The entire auto industry is sick, and Ford is simply the canary in the coal mine.
    Real wages have been stagnant for decades. We have certainly entered a period of significant stagflation in what is perhaps the second leg of the 2008 depression which has not been remedied. Morgan Stanley agreed with my assessment in 2016 and 2017 in that the wholesale market was completely overvalued by at least thirty percent, in predicting an average decline in valuations by 25% (bull case, even, bear case -50%).

    I argue the industry, including financing companies, has been scrambling to hide, export, and probably in some cases destroy inventory to prevent it from hitting the overall wholesale market which will balance out supply and demand causing price corrections. Ford’s cutoff of car models may also be an overall stealth production cut. I have already read theories by idling the plants instead of closing them, this is a move to eliminate the UAW workforce and later replace them with non-union after whatever period in the contract has expired. Maybe a quick buyout of the jobs and poof, gone. Michigan went RTW after all.

    If the industry wants to succeed, its really got an uphill battle. While the President is still in office they have to lobby hard on the ridiculous regulations which have been put into effect since 1990. They keep playing games with production locations and wages to increase profits and give them some room for incentives, but the cost of materials and certification has done nothing but increase in the past twenty five years. Much of this is to due economic reasons they cannot solve, however if foolish requirements could be rolled back or undone production costs could fall and in theory the industry could offer new vehicles more in line with declined wages. This is key, as the current model has been unrealistic debt and bad loans repackaged a la MBS. People have to be able to afford the products if this is to be corrected. The EPA mileage is a nice attempt, but it was done so the industry has MPG wiggle room for their high margin products. They are not truly challenging the giant behemoth which has been choking more and more for decades.

    In the end I believe Ghosn and Marchionne were right in the industry will simply shrink then consolidate. They will not fight against twenty air bags and exotic materials both of which are diminishing returns. They will not fight against the EV black hole of R&D no one will buy which they will never be able to produce profitably. They will not point out they sell the same or similar models in other second world markets for less local dollars because of the huge cost of federalization. They’ve got two years for sure to start this fight and quietly undo the stupid while drawing attention to a punching bag like EPA numbers. Its ride or die time, gentleman. Do you have it in you?

    ““Our problem is not a lack of growth. For the past 40 years, productivity has gone up substantially, but these gains have not reached working people,” said Mishel. “The problem is that wages have been suppressed by a restructuring of rules on behalf of those with wealth and power.””

    http://www.finfacts.ie/Irish_finance_news/articleDetail.php?US-pay-productivity-gap-Real-wages-for-typical-worker-flat-since-1970s-119

    “The report points first to an abundance of new-car inventory — up 10% and trending higher at the end of 2016 — and then to price competition: Having capacitized to a seasonally adjusted annual rate (SAAR) of up to 20 million units, OEMs and dealers will have to price to sell in a market that is expected to hew closer to the 17 million-unit mark this year.

    “As new-car prices fall, used prices look relatively more expensive, which necessitates a decline in used prices to equilibrate the supply/demand imbalance,” the report warns.”

    http://www.autodealermonthly.com/channel/dps-office/news/story/2017/04/used-car-values-could-fall-by-50-morgan-stanley.aspx

    • 0 avatar
      sportyaccordy

      Good post.

      Something else to consider is the average age of cars on the road continues to increase. For all the whining about tech and pining for the “good old days of the 1992 Camry” cars in general are more durable than they used to be (or at the minimum people are holding on to them longer).

      I always tell the story about how I bought a 10 year old Accord in 1993 for $2200. Today a 10 year old Accord goes for at least 3x that. Now while that 93 Accord could go the distance that was the exception to the rule. A 10 year old Ford or Hyundai at that time was a real gamble. Now it’s no issue. I think banks have also become a lot more lenient on the age of cars they will finance for this reason. I just got approved for a loan that can be applied to cars going all the way back to MY08. Part of this is probably just greed and desperation for spread in this low interest rate environment, but I think part of it is an acknowledgment that older cars have more inherent/intrinsic/functional value than they used to.

      So it’s definitely no surprise Ford cannot make it work. The whole industry is under the gun and is propping up a house of cards. I feel like the real SAAR should be about 10-12M per year, with a similar reduction in brands/offerings.

      • 0 avatar
        28-Cars-Later

        Thanks man, I agree with any perceived losses in quality there have been definite improvements.

        “I think banks have also become a lot more lenient on the age of cars they will finance for this reason.”

        I agree, and also agree this is more in part because of the nature of banks chasing riskier yield and the fact good and bad auto loans are being sold off like the sub-prime mortgages were in 2008. Average vehicle durability is also certainly up which mitigates risk more than it used too as you point out.

        Ironic you name 10-12, the industry was back to 12m units in 2012 which may have been the peak of any true “recovery” which may have occurred. I really don’t know how they are going to handle the MY13-17 glut in the aftermarket, I feel as if eventually they are going to lose control and valuations will correct.

  • avatar
    V16

    “We don’t want anyone to think we’re leaving anything,” Hackett said.
    Millions of potential CAR shoppers would disagree.

  • avatar
    conundrum

    Instead of the usual ranting, the Autoextremist has the most in-depth overview on the Ford situation this week.

    It actually makes sense in a rather calm manner, which is a bit unusual for them. Rather than me precis it, just read the article. It’s far more in-depth than anything reported in the usual press, or even hinted at here by commenters. Covers all the bases.

    autoextremist.com

  • avatar
    road_pizza

    Hack-it is nothing more than the second coming or Jacques the Knife. Bastard’s gotta go NOW.

  • avatar
    RocketScience

    After reading this web site and other sources, I think I’m starting to get some clarity.

    Ford Division may want to be the next Subaru–with pickup trucks.

    Want a car? Go see Lincoln–the difference between high level Ford Fusion Titanium, which is the only trim FoMoCo makes money and MKZ is negligible.

    May as well put people in a product with a Lincoln badge and boost market share and profitability at the same time.

  • avatar
    highdesertcat

    https://www.bloomberg.com/news/articles/2018-05-11/morgan-stanley-sees-detroit-largely-exiting-american-car-market

    Maybe Ford had a better idea that was ahead of its time.


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