Ford Withdraws 2009 Profit Promise
January 13, 2008. Reuters. "Ford Chairman Bill Ford on Sunday said the automaker's plan to return its North American operations to profitability in 2009 is 'progressing very well.'" May 23, 2008. Automotive News [sub]. "Ford Motor Co. said today it will cut North American production and retreated from earlier profit outlooks, saying it expects only 'to be about break-even' before taxes in 2009." About? What's that, give or take a couple hundred million? Anyway, Ford's slicing North American production by 15 percent in the second quarter, down 20k units to 690k vehicles. And you can bet that the majority (if not all) of those not-produced vehicles will be high-profit trucks and SUVs. A statement from CEO Big Al Mulally just about said as much. "The challenge affecting the entire industry is the accelerating shift in consumer demand away from large trucks and SUVs to smaller cars and crossovers — combined with a steep rise in commodity prices and the weak U.S. economy." FoMoCo's "how low can you go" ain't done yet. The Blue Oval Boyz are dropping third quarter production by 15 to 20 percent and fourth-quarter production another two to eight percent. Or, come to think of it, more.
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The announcement is bad news for Ford, but I like the fact that they are cutting production instead of simply building more of them and slapping more money on the hood. If Ford has to shrink to become more profitable, so be it. At the very least making an announcement like this shows that somebody has a sense of accountability in Dearborn, no?
The F100 IS a bad idea unless ford is being coy and using it to replace the fat F150. Any body with sense at ford would take the truck formerly known as the best selling compact truck in the world and refine it and its mileage potential. And do it 6 years ago. Oops, cant do it, can they? Oh wells, another squandered opportunity.
@P71_CV: It was firmly "tounge in cheek" when I said bleoved...sorry. They're ending production, and are not available unless for fleet sales. I think that would point to the Panther's demise. First, I'll state that I don't really see a need for either big-box wagon...but I'd rather see these than more Explorers and Expeditions not being used to their capabilities. I think the Explorer is a great vehicle and one of the best 7-seat vehicles on the market too. Ford is cancelling the Taurus X, the Flex does seem to be a better packaged vehicle and a bit different than the Flex. Yes, they both have similiar underpinnings and seat 7...but are different vehicles. Everything you listed as to why the Flex will fail is SUBJECTIVE. Just because you wouldn't buy one doesn't mean that Ford should not sell it. I honestly don't see why you're getting all bent out of shape over this. Polarizing style and comments is what made the 86 Taurus sell. Ford could have kept with the Fairmont, as it was a 5/6-seat sedan. @ Katie- if it sells like hotcakes, that doesn't mean it's useless to Ford. It's making money. I personally think that Ford, and others, should scale down the number of models they offer. And I would like to see less of these "segment-buster" vehicles. They aren't busting any segments like the minivan did, and really not offering anything incredibly new or game-changing. Every manufacture is getting too bloated with so many vehicles that do essentially the same thing. I think Ford would have the easiest job of trimming it's lineup if it chose too, and the least amount of vehicles to dump. Also trim the truck packaging and offerings. Sell a wagon version of the Focus and Fusion. My idea: Fiesta Focus Fusion Mustang Taurus >will 2010 redo make it a more popular vehicle? [s]Taurus X[/s] >Flex Escape [s]Edge[/s] Explorer >will 2010 redo with unibody render it "useless" as a 7-seater or will it make the Flex even more "useless"? [s]Expedition[/s] [s]Ranger[/s] F-series F-series SD [s]E-series[/s] >Transit ? Transit Connect That's just how I see it. You'll have a few more vehicles than Honda. I do feel Honda knows how to cover the market quite well...nothing they sell (save the Ridgeline) does poorly. However, they don't offer to the commercial and fleet crowd like Ford does and don't offer a utility van or trucks.
I have no doubt that Ford will be able to escape bankrupcy, even if it is reneging on its promise to make a profit by 2009. But I don't think Ford can escape future bankrupcies and other disasters. Its corporate culture and ways of thinking just aren't where they need to be on a long term plan. In order to protect Ford from future problems, Mulally would have to change the thinking that goes into Ford products, making them more reliable, getting rid of the Ford family's influence, and hiring workers on a merit basis. The question is whether he can stay in the driver's seat longer at Ford than past executives have, so that his influence can affect Ford for the long term. Long term, Ford is going up against China and India, who are going to be making much cheaper vehicles at Ford's current quality levels using cheaper labor. Toyota will also be going up against China and India. But Toyota has a reputation for reliability and quality while Ford doesn't. The Ford model lineup will be where it needs to be come around 2012, when the new Mustang, Ranger, F-100, Focus, Fiesta, and Mondeo (Fusion) go on sale. But if the corporate culture can't keep up with the product line, Ford still won't be able to survive against Tata, Toyota and Chery.