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Ford criticized for “dumb” restructuring announcements

09/25/2006, 1:27 PM

By admin

Ford’s “Way Forward” restructuring plan ranks among the five “dumbest things on Wall Street this week,” according to TheStreet. “Fixing Ford’s business is looking like no mean feat. The company promises better cars and trucks, but its core North American auto business won’t swing back into the black till at least 2009. Just nine months ago, Ford was promising a North American profit in 2008,” the financial publication says. “The future is looking so bleak that Ford reportedly even discussed an alliance with GM.” Shares plunged twelve percent the day of the announcement. TheStreet also seems skeptical of Mark Fields’ ability to turn Ford’s U.S. operations around. “We’ll take your word for it, Bill.”

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09/25, 1:38 PM

posted by:

Cars and Automobiles» Blog Archive » Ford criticized for “dumb” restructuring announcements

[...] Source: Leftlane [...]

09/25, 1:50 PM

posted by:

mblommel

OK here’s my official plan to save Ford NA from oblivion.

1. ****can everything in the current lineup except the F-series pickup and Mustang. The F-series is a proven seller if anything else and the mustang is bringing in some decent traffic.

2. Begin immediate importation of Aussie Falcon, and Falcon Utes and all their derivatives. Sell them as a Falcon and the Ute as a Ranchero. Don’t let the NA marketing guys come up with some dumbass new name. Match Falcon XR6 Turbo vs. IS350, G35 but price it lower.

3. Begin immediate importation of Euro Focus, Mondeo, all-new Ranger and either the Ka or Fiesta, maybe both.
Don’t let the bean counters and other corporate retards dumb down the product for us “dumb Americans”. Match the Focus against Honda Civic, Mondeo against Accord& Camry, Fiesta or Ka against Kia, Hyundai Accent etc.

4. Price all models with comparable options at $2000 less than the competition.

5. Offer a warranty like Kia

6. Use the ensuing profits to rebuild the North American operations to produce world-class cars that can be exported to the former import nations and/or build common models.

It probably wouldn’t work, but it’s better than slapping 3-bars of chrome on the front of a 500 and calling it a day.

09/25, 1:59 PM

posted by:

angelo

Great post. In fact, your “it probably won’t work” line makes it even better. It’s a smart way to humor people at work.

09/25, 2:02 PM

posted by:

angelo

I would add that by eliminating so many lines of production, Ford might be able to fire enough people to actually succeed in reducing costs to manageable levels.

To you list I would add eliminating Mercury. I’d unite Jag and Lincoln (like the did with the S-Type/LS) and make Aston Martin a super-jag division (a la RUF v Porsche).

Continue the platform sharing exemplified in the MAZDA3/Volvo S40/Ford Focus.

I don’t think that Ford can sell the European Focus at the price of a Civic, it’s platform is more expensive. Then again, Mazda does it…

09/25, 2:15 PM

posted by:

The Stig

The longer Mark Fields is employed at Ford the worse it will be for them.

09/25, 2:43 PM

posted by:

Robert

Why was this a dumb announcement? They confirmed that 70% of their line-up would be reworked by MY2009. They announced offering buyouts to all workers, which could reduce their workforce by 30,000 by the end of next year, saving billions of dollars. No, they might not hit profitability in NA by FY2008, but I bet they’ll hit overall company profitability that year, boost their credit rating, allow them to borrow more inexpensively, have more money to invest in products and get the ball rolling again.

There are big product deficiencies – but you cannot just bring a car from Europe or Australia or Asia to the U.S. without tweaking it or designing it sepcifically to handle both markets – emissions, crash standards, materials, powertrain options. They tried just rushing the Focus in 2000, and we all know how that ended.

Right now, it looks like for 2009 and 2010, we will have a C2 Focus, a new panther platform, new trucks, new engines, new small cars. But that’s the time it takes to get it right. Ford has constantly failed in the past because they didn’t get it right, it cost them billions in lost customers, recalls and repairs. Do you honestly think the current Corolla is 250,000 units per year at a $3000 premium after dealer sales better than the current Focus? No. If you think it is, you obviously haven’t driven the Focus and Corolla recently. It’s all about image. Ford needs stellar cars soon, but it needs high-quality cars as well. Bad quality will only worsen things.

Ford needed to make the decision on the C1 18 months ago if it was going to bring it to the U.S. They didn’t, and unless there is a miracle, there’s no way to get it here without problems. Ford needed to decide about 5 years ago to update their RWD platform, but they didn’t so now we have to wait until they can develop one. In the meantime, they have to make meaningful updates, because updates are better than nothing.

The one area where I would be VERY critical of Ford is this: the design of the Explorer and Expedition. It doesn’t matter how good the engineering of those vehicles is (and it’s good, the new Explorer is by far the best SUV I’ve driven), it’s all about the look. A vehicle is only new if it looks different. That’s the consumer mindset. I hope that the Focus is noticeably different next year even if it is not a C1. I hope the same of the Five Hundred. Because a little nose treatment never fooled anyone.

And that’s all they can do in the meantime. Work with what they have, continue the huge strides in vehicle quality and hunker down for the next 12-18 months, because things will be rough. But, if they don’t go bankrupt, I think they’ll be in much better shape then. It’s all a process that takes time, and in the meantime, we hope for the best.

09/25, 3:51 PM

posted by:

Endurancevm

Ford cant can any of their products, the most they can do is add to them and redesign. I would make all the Mazda6 derived cars AWD optional, put the new 3.5 duratec in all the cars and hope that they get good fuel economy. I would restyle the interiors and exteriors of all the cars(except mustang) and i would make high performance versions of the cars. In chryslers case the SRTs sell the RTs and SXTs and base models. So Ford should do the same. SVT Fusion to sell the regular one. Make the cars not look hideous and make their interiors somewhat adequate with the other automakers.

09/25, 3:55 PM

posted by:

lanapat7

I agree there is a problem of image and perception. But it was created by Ford. The 500 was dull, the Explorer has no distinctive sheetmetal (who wants to drive a 2007 car that looks exactly as a 2000 model?), ditto with the Expedition, they have left the Ranger and Freestar to die, the Escape should’ve been redone by now with more modern styling, the Crown Victoria is circa 1979, etc.
And their solution for a new Ford design language is to apply the 3 bar grille to everything they manufacture.
The grille works in the Fusion, but it will NOT work in the Focus, 500, Freestyle.
I only hope they DO NOT apply the 3 bars to the Mustang.

09/25, 4:03 PM

posted by:

Fatstrat

One thing is for sure, companies this size don’t turn around overnight. It’s going to take a long time, and some out of the box thinking to do it.
I think that Ford and GM have been chasing the Japanese for so long, and now they are trying to catch up with Germany at the same time. Thats too tall a task for anyone really. Just boil it down to the basics and make sure the models are quality. Too much badge engineering is just not a good idea anymore.
Oh yea, and do everything possible to dispose of the UAW.

09/25, 5:17 PM

posted by:

Endurancevm

Ford needs to invite their European styling department to do US cars. Every Ford in Europe looks much better than their counterpart here in the states. Ford cant win in the reliability department(that belongs to Honda), Ford cant win in the luxury department(that belongs to Germans/Cadillac/Lexus), so Ford has only one path to take, and that is design. If ford can design a car thats not just appealing, but looks great as well then they have a hit on their hands. For example, to me the new Mondeo and the old Mondeo are much better cars than here in the states. The European Focus is much better than our focus and the european people hauler is much better than the one we have here(Freestyle?! FREESTYLE?!…oh god). Ford will have to design a nice car, in and out to compete with the market.

09/25, 5:21 PM

posted by:

GL1

I think its going to get A LOT worse for ford before it ever gets any better… If it does at all…

09/25, 5:24 PM

posted by:

GL1

Since their quality has been in question for a VERY long time offering a free longer warrenty say five years and 50,000 would help a lot… but they won’t ever do that because they would loose a fortune fixing their cars because the quality still isn’t there to run for 50,000 miles with no problems or cureently for 30,000 either for that matter.

09/25, 5:59 PM

posted by:

lanapat7

FORD stands for

Fabrication: Ordinary; Repairs: Daily

09/25, 6:23 PM

posted by:

Fatstrat

Isnt Ford offering a 5yr 60k warranty now?
Also, I like the tone of this string. I like reading the thought out solutions people have come up with and not so much of the garbage of the past.
There are some really good ideas and comments here.

09/25, 7:59 PM

posted by:

1c3d0g

I’m just pinning all my hopes on that Mulally dude from Boeing to turn things around, he’s basically the last person that can do it before Ford is too deep in red ink to make it.

09/25, 8:34 PM

posted by:

Hidden_Hunter

The guy from boeing helped put boeing back on track after they got a bit of a whooping from airbus so maybe he can patch it up a bit :D

I personally think that ford america should be looking at what their external devisions are producing and seeing how they could fit in their current line up, buy American might of worked back in the 50’s but it certainatly doesn’t work anymore.

09/25, 10:37 PM

posted by:

davidg1977

I’m all for Mulally bringing them back from the brink akin to the work he did in the commercial airliner division at Boeing but please remember that a lot of Boeing’s success came as a result of Airbus tripping over themselves. Without a one arch enemy (stealing Ford’s BIG 6 term), it’s hard to do a me versus them but rather more akin to me versus the field which can be more difficult.

They truly need to get their costs (fixed and variable) in line while trying to decrease the subvening required from their finance arm to get the debt rating back up and make the money they borrow cheaper.

09/26, 10:54 AM

posted by:

Fatstrat

Also remember that Airbus is an international consortium. They are supported by more than one country are they not? Although Boeing probably enjoys some types of tax advantages, they are not a government supported business in the same sense of the word.
This gentleman is bound to bring cost saving measures to the table. Hopefully he is smart enough to let the good product people have their way and/or hire some new ones.

09/26, 2:26 PM

posted by:

Piablo

And everyone thought GM had problems! Ford is the automotive equivalent of Sybil.

Ford’s problems are a bit heavier than just having the UAW stuck on their ass like a flaming hemmoroid. They have some real identity problems. Unfortunately these identity problems cannot be solved as easily as lopping off an arm of the company. If Ford sells off Mercury, it loses a huge vehicle (pun intended) to make profit. Mercury is a broken machine, capable of mass production. All it needs is to be fixed and rebuilt. The company doesn’t know what Mercury represents (besides the hot chick in the commercials!) and it shows in their product line. They are a bunch of slightly different Fords. Once they have a real image, Mercury will be back to being profitable.

I would also suspect that in order to rework Mercury, Lincoln will need some sort of work as well. Currently I think Mercury is suppose to fit in a slot between the baseline (Ford) and the highline (Lincoln). Lincoln has essentially squeezed out Mercury in that it doesn’t provided a high enough level of luxury. It’s cheap by today’s standards. Then there is Jaguar. Jaquar needs to be amped up tremendously. Share NO parts, nothing with Ford. If Aston Martin is the ultra performance luxury, then jaguar needs to be the ultra luxury of luxury. I don’t see a difference in level between Caddilac and Jag. But there is a big difference between Caddilac and Aston.

09/26, 4:03 PM

posted by:

Fatstrat

I cant see Jag as a business case if it isnt at least sharing a platform. Too costly to develope its own. IMHO.

 
 
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