http://www.forbes.com/opinions/2007/..._0918ford.html


Ford's Dangerous Flight Plan
Jerry Flint 09.18.07, 6:00 AM ET




August was a tough month for auto companies in the U.S. It was so bad that even mighty Toyota Motor was down slightly from August 2006. Ford Motor continued its sharp downward trend, with a 15% drop in sales of passenger cars and light trucks.

To put this in perspective, Ford (nyse: F - news - people ) has backed off from its "keep-the-lines-running" fleet business and is trying its best to resist profit-draining sales incentives for retail customers. It is also true that monthly auto sales are quite volatile, and that this month's gainer might be next month's loser. What troubles me most about Ford is not its current situation, but where the company appears headed in the coming years.

So far, the press has largely been supportive of new Ford chief, Alan Mulally, who parachuted into a disaster. I am not ready to say an airplane guy can't head a car company. An old friend who ran Plymouth once, Robert Anderson, did a fine job running a West Coast aerospace giant.

Mulally deserves credit for renaming the Ford 500 as the Taurus, and credit for holding good meetings and instilling "discipline" in the process. Ford was in dire need of such reforms, but they will be a waste of time if the company cannot bring the right vehicles to market.

Mulally has limited resources for revitalizing Ford's lineup. As such, it is even more crucial for him to rethink the current direction and future plans. Let me start with a Ford icon, the Mustang.

Remember how we cheered a few years ago when Ford brought out a brand new Mustang? Ford is wrecking Mustang again. The boy racers have taken over and put the money into big-engined $50,000 models. They are ignoring the entry-level Mustang buyer and risk losing that part of the market.

Mustang's sales, 99,537 year-to-date, are down 16% from 2007. The pony car's mission will not be any easier when Chevrolet's new Camaro and Dodge's new Challenger come to market. Ford, apparently, plans some mild sheet metal changes for 2010, but a serious redo is not in sight.

A one-time big winner for Ford, its rear-drive sedan, appears headed for the great junkyard in the sky. A decade ago, cars based on Ford's Panther architecture were its most profitable passenger car line. Panther is an ancient design, but its customers love it for its size and reliability. Why not modernize a car like the Crown Victoria instead of killing it?

Macho police with .357s on their hips drive Crown Victorias; New York City taxi drivers put 150,000 miles a year on these cars. That is great if you are a cop or a cabbie, but a retail customer cannot go into a Ford dealership and buy a 2008 Crown Victoria; Ford is now selling that car only to fleets. Retail buyers can still get the Lincoln Town Car, a pricier version of the Crown Victoria, or the Mercury Marquis--the only Mercury model that Ford still sells in Canada.

In looking at the product plans printed in trade publication Automotive News, it seems as if they plan to kill off Mercury. Maybe somebody in Dearborn hates Mercury. But without it, the company would have to merge Ford and Lincoln dealers, something that it has already done in Canada, with disappointing results.

The people at Ford apparently do not understand that wealthy people who buy luxury models do not like to mix with the people who buy low-priced cars. Another problem: Rather than getting the rear-wheel-drive automobiles it needs to compete against the luxury imports and a revitalized Cadillac, Lincoln is now receiving the type of cars that Ford used to assign to Mercury.

Ford has done almost nothing to update Panther. Instead, it is letting it fade away so that it can justify canceling it. All this comes at a time when rear drive is becoming popular again. Ford has displayed a few teaser show cars based on its big rear-wheel-drive Australian cars, but I do not know how serious the company is about developing production models for the U.S. The company is also thinking about replacing its big sedans with a larger version of its new Taurus, but we are probably talking about a front-wheel-drive or all-wheel-drive car for a segment of the market that prefers rear-wheel-drive.

How about small cars? With the nation's renewed concerns about fuel economy, small cars may be coming back in style. For 2008, Ford cut the variety of Focus models, just when it should be broadening the line. Yes, U.S. customers get a restyled Focus for 2008, but this is just a fix-up of the previous generation vehicle. European buyers already have a second-generation Focus, which I hear is a terrific car. The word is that U.S. buyers will eventually get a new generation Focus, but that is years away.

For similar reasons, I am baffled why Ford seems to be abandoning Ranger, the smallest pickup in its product portfolio. We are definitely seeing less demand for the biggest, thirstiest pickups, but next year the Ranger plant closes, and there is no sign of a replacement. Ford once sold 400,000 Rangers a year; Toyota (nyse: TM - news - people ) will lead the segment this year with 180,000 sales. With Ford bailing out, Toyota might eventually sell 250,000 small pickups a year.

I also hear that Ford will build a new small car in Brazil and export it here. Why not build it, instead, in Mexico? In the 100-year history of the auto business there has never been a successful export here from Brazil.

One more thing: Ford eventually plans to turn its truck-based Explorer sport utility vehicle into a car-based crossover. GM (nyse: GM - news - people ) and Chrysler, apparently, have similar plans to phase out many of their truck-like SUVs. Yet the market is already flooded with crossovers, and there will always be some demand for rugged SUVs with strong towing capabilities.

Ford does have a few models that are doing OK in the U.S., such as the Ford Fusion and the Mercury and Lincoln varieties--all based on a Mazda (other-otc: MZDAF.PK - news - people ) design. Two years ago, the company pushed aside Phil Martens, the product boss behind these winners. The company sold off Aston Martin, and in the process lost the most successful executive at Ford, Ulrich Bez. They are getting rid of Jaguar and Land Rover, which is coming around, and have said that it would consider offers for Volvo. Such sales would end any hope of a global luxury business and mean the loss of talent and resources.

Alan Mulally, check your flight plan.

 

It seems like Ford execs are completely out of touch with the car buying public. The one that hits home to me is the probable loss of the Ranger. I have a 97 with 140k on it that I love. I don't want a big truck, and so if it gets cancelled, I'll have to see what else is out there (non-Ford).

 

Scary isn't it? Ford really has a knack (and history) for fouling up their designs. If we look at the Mustang and the rear spoiler for example you'll see what I mean. None of them match the clean design of the car. The V6 spoiler looks like it melted in place and was left on. The GT is at best heavy handed in design, almost an after thought. Then there's the GT500 version, again the design is not in keeping with the flow rest of the car. It's sad that the aftermarket guys have to jump in and rescue the design with grills, spoilers, and quarter window louvers that look "right".

Sigh, and for the "refresh", we've got the Gag-aro influnce.

 

Ford has ran themselves out of the car market. The Mustang, the Fusion, and once 500 now deemed Taurus again is all we have to offer. Beside the Focus.

 

Why Ford execs still refuse to sell the European Mondeo and Focus in the US is beyond me. Those are 2 very successfull cars here in Europe, but apparently Ford doesn't realize they're sitting on a potential gold mine...

 

probaly because the US dollar sucks (although I bet a greenback would make a helluva diaper wiper right now), you bring the mondeo and euro focus over, nice as they are, people wouldn't see the value in them and they would flop, dunno about OZ cars, but thats a different market.

I dunno why this guy has his shorts in a twist over the GT500? It's a halo car. You go in looking for a GT500 and you find out you can get a pretty snappy GT or V6 in yuor budget range. I can agree with needing a mid range performance car between GT and GT500, but we'll have to wait and see. GM is gonna need serious volume to offset the costs of its more expensive chassis and from what I understand, its gonna have a model range like the Mustang V6/V8/Halo car. Dodge is going with halo car and may end up with V6/V8/Halo car down the line, both of the competitiors will be more expensive than the Mustang, GM is going with essentially an upscale pony car and I guess dodge is going for the top of the heap and if ity proves success spawn lesser cars.

As for langusshing sales and a total redesign, Mustangs heve pretty much been on a 3 year cycle when sales dip, then they freshen things up (1979 - 2004 was an abberation, but the car evovled roughly every couple years except 1987 to 1993). Besides why rush into a three way war with GM and Dodge, what does Ford have to gain by mixing it up with a new car in 2009 or 2008? They will have a bunch of cost to amortize with a new car that will be in a market that has increased by two or more cars by then (Nascar is proposing a series that races Mustangs, Camaros and Challengers as well as a Toyota are they going for a pony car in thier further effort to prove that Toyota was really an american company that went to Japan to help them out?)

 

The guy that wrote that article must be smoking something. The introduction of the GT500 had nothing to do with the slight decline in overall sales. Every successful new car introduction sees a decline after a couple of years. All the "I gotta have one" guys have their cars already. The initial sales were almost double what they expected to get, and even with the decline they are still above average. The GT500 program did nothing to sales except bring people into the showroom.

 

Ford is canceling the Ranger? Did I read that right?!

~Mike~

 

Uhh I believe he is talking about more than the GT 500 with he talks about 50K plus cars....

Saleen, Roush and just about anyone else out there doing high HP versions of the s197 falls in that price range. Hell the basic Shelby GTs are what - 40s??...

I don't think he is far off base with his observations

I have been saying for years we should have the European Focus over here..... but I think it has to do with European customers versus American customers. (and they have to find their way around this)

Think about the Focus over here - the type of drivers and the price range. The Euro Focus is a **** good car (and way ahead of ours) - but the price point sure isnt the same - you definitely pay more over there for what you get - and it would be the same over here.

Its tough - expected price on 08 US Focus is 15K to 18K
its slotted as a value car

Euro:
a main staple vehicle
a base price LX is approx 12K pounds equaling 20K US
This goes all the way up through various models up to a Focus ST at approx 18K equaling approx 30K US.

Think about telling someone over here you just paid 30K for a FOCUS

Yeah you are getting a better car but they have to count on people/consumers changing their mindset from FOCUS = simply economy value car

 

He's an idiot. Funny too he's not quite sure what year it is comparing sales numbers. The rest could be gleaned from any BON whining threads in an hour's time. I don't think he realizes that Mazda exists either. My bet, he read a few things on the INTERNET and then wrote the article. Every point he makes are coincidentally some of the biggest arguments running on BON right now.

 

For exaqmple. I rented a white V6 stang that was pretty stripped option wise a week or so ago.

Compared to the GT it is a totally different world.

That is not to say there is not good there.

HOWEVER.

When you can get a VW jetta for same or less money with a really nice interior. Then you look at the mustang interior without all the bells and whistles, IUP, etc. One has to wonder why all mustangs do not come with the IUP group.

I love my gt, and think the interior is very nice for the money I spent considering the driveline package. But this V6 rental really brought me back to earth. If I had only limited cash and given a choice between a V6 stang with no options, or something foreign with some creature comforts. The stang might be in trouble.

 

The Ranger cancellation puzzles me. Why would they do that, gas is only getting worse, and the F150's dont get but maybe 15. I know of Rangers getting 25-30 easy.

 

are you kidding me, V6 rangers get about the same as an F150, roughly 15-17. One in 50 of the non-commercial rangers we stock are 4 bangers.