RSS RSS Twitter Twitter
Leftlane - news, reviews, and info for the auto-industry
 
 

Ford relying on new models, cost cuts to get through tough economic times

11/13/2008, 6:22 PM

By Drew Johnson

The economic collapse is forcing the Detroit Three to rethink their business plans, but Ford’s management is taking the company in a completely different direction than that of General Motors and Chrysler. Whereas the other Detroit automakers are slashing product development plans, Ford is actually fast tracking several new models in order to ensure the Blue Oval’s survival.

Although new product programs require huge amounts of cash, Ford sees the continued development of its product line as the only way to stay afloat in today’s highly competitive market. “We’re only going to be in business if we create products that people really do want and value,” Ford CEO Alan Mulally told The Detroit News. “This is the essence of creating a viable Ford.”

GM and Chrysler are taking the opposite approach and have already delayed or cancelled several product plans.

It remains to be seen if Ford’s strategy will be enough to save the company, but Ford’s management team is adamant that new products are the only way to ensure Ford’s survival. Mulally has been holding daily meetings with Ford executives from around the globe for several weeks to see where money could be freed up for new vehicle plans, with seven-day work weeks becoming the norm. So far only one vehicle has been delayed — a European crossover that has yet to be announced — thanks to cost cuts in areas such as advertising and executive bonuses.

In addition to setting the foundation for future Ford models, Mulally believes the progress that has been made will also make Ford a more attractive option for government aid. “Whoever is going to invest or loan us money wants to know we’re taking the actions to create a viable company going forward,” he said. “We are absolutely taking the appropriate actions.”

Ford’s current plans don’t rely on any help from the government, making the Blue Oval the frontrunner to survive these tough times.

    Print This Post

New car price quote

Zero obligation price quote from a trusted local dealer.
 
 

11/13, 6:25 PM

posted by:

Borat

“We’re only going to be in business if we create products that people really do want and value,” it took almost 2 years on a job to learn that much? What a talented man! I think we need to shower him and his employer with our tax dollars for such epiphany.

11/13, 6:36 PM

posted by:

A4

well people ought to want the flex too… its a GREAT car, but that aint flying off lots

11/13, 6:41 PM

posted by:

mayer_ray_nagin

This is why Ford is a better long term bet.

11/13, 6:51 PM

posted by:

sakio327

If I were buying stocks in the Auto industry (not that I am right now), I would rather buy stocks in a company that says they are investing in the future instead of saying we are not doing anything to ensure our future. If I had a gun pointed to my head and had to buy either Ford or GM, I would probably buy Ford.

11/13, 7:37 PM

posted by:

PW

Just a year ago, I would have thought that Ford would be the one Detroit automaker that was about to be put on life support. My, how times have changed.

11/13, 8:00 PM

posted by:

DrFill

Flex: Miss
F-150: Push (Won’t gain or lose share)
New Fusion: Hit
New Exploder:Push
Fiesta :Hit (If they move their #&$)
Mustang :Miss
Lincoln/Mercury: Dead (Can’t afford grave)

Ford’s best arrows are the Fusion and Fiesta, but Ford is dragging #@$ with one. It would be a great one-two punch, and could be the start of the Civic-Accord/Corolla-Camry competitors domestics need.

Ford isn’t planning this out well (shock), but may have just enough product to make it to the other side.
DrFill

11/13, 8:12 PM

posted by:

FSVT_ROCK

Great job for Ford, bring the best to the table and Ford is going to start making money very soon. But for GM, is going to continue going down hill and their new cars is going to keep pushing back over and over.

11/13, 9:25 PM

posted by:

Payton Byrd

@DrFill

Are you on crack? What makes you think the Mustang is a miss? It’s the most profitable thing not called a Truck or SUV that Ford sells. Also, what makes you think that a Focus is a competitor to Accord or Camry? Have you ridden in a Focus and also ridden in an Accord. Completely different vehicles for completely different markets. I’m about to have a third child, how I do I fit three car seats and the wife in a Focus? I can easily do it in my Accord.

And for the record, I had a Focus Wagon, it was a great LITTLE car, but was simply too small to be comfortable with four people in it as I had to practically eat the dash on the passenger side to escape the kicking feet of a bouncy toddler. And unless you have kids and know what it’s like to make an absent minded toddler stop kicking their feet………………………….

11/13, 9:29 PM

posted by:

DetroitWatcher

Mercury is probably dead, but Lincoln might do well with some of its upcoming cars (MKS, MKT). Not competitors to Lexus, but cheaper to produce, and priced more correctly for the current economy.

The new(ish) Mustang might do well. Even though it’s not as hi-tech as the Camaro, it’s cheaper (better positioned in hard economic times). Also, much of it’s tooling is probably already paid off… so it’s likely a higher profit-margin product.

11/13, 9:35 PM

posted by:

DrFill

You might want to read my post, or have it read to you, before commenting on it
DrFill

11/13, 9:44 PM

posted by:

johnnycanuck

Payton, thanks for the advice on Halloween about the Ford stock. Funny, but I was also thinking about acquiring some GM shares as well. Let’s just say now, not so much.

11/13, 9:54 PM

posted by:

441Zuke

I don’t really see the fiesta as competition for the corolla maybe the yaris, the focus needs to grow up if it is to be taken seriously. I think the mustang will do well everyone makes a big deal out of how inferior it is. well it is better then the fox mustang and that was 20 years old when it died. the mustang as Carol Shelby pointed out is a secretaries car. I think that a majority of buyers don’t care about the internals they car about the body.

11/13, 10:10 PM

posted by:

Catiadesigner

The Fiesta is Yaris size, the Focus is Corolla, the Fusion is Camry, the Flex is far too expensive.
Nice to see a company at least talk the talk, we’ll just have to wait and see if they can walk the walk.

11/13, 10:11 PM

posted by:

Borat

Johnny, don’t rush on taking advice from folks who use generic brand of medication to save money. As you (and everyone else) can see it’s not always working as well.

11/13, 11:22 PM

posted by:

johnnycanuck

Borat, why not? Our provincial lottery corporation has a slogan: ” know your limit, play within it”. I’ve lived my life around that theory, and my ‘generic medication’ usually comes in a can.

11/14, 1:16 AM

posted by:

steve333

Mulally is awesome. The only CEO of the Big 3 worth a damn.

11/14, 3:18 AM

posted by:

JakeK66

Funny, last year I would have bet a million bucks that GM would be the one coming out of the slump on top. It’s nice to see Ford is planning ahead and not back tracking (like GM and Chrysler). Too bad the Mustang isn’t on a modern platform with a decent V-6, but at least it is priced right (after about $7000 in incentives of course).

11/14, 5:53 AM

posted by:

PW

I guess I should be rooting for Nardelli over at Cerberus, seeing how he’s a brother in my fraternity (Tau Kappa Epsilon).

11/14, 6:07 AM

posted by:

Ramatai

How representative of normal car drivers are the comments here? I think the point is that most people want economical cars at the moment. It doesn’t mater how good the Flex is, it’s still quite a large SUV isn’t it? Personally I feel it looks like a cheap imiation of a Range Rover.

Shouldn’t Ford be focusing on the Fiesta, Focus and Mondeo (not sure what the USA equivalent is) now rather than SUVs and pickup trucks?

I never got the concept of a pickup truck, I wouldn’t drive a tractor for fun so why drive a pickup? If you need one for work fine, but as a family car why?

I think the way forward is to increase the speed limit and tax gas. Use the tax on gas to provide loans to the auto industry for vehicles which get 35-60 mpg. In five years the US get to eport oil and reduce the tax on gas again. TheGM and Ford already have the engines and vehicles to hit 35-40mpg all they have to do is retool in the US, which isn’t as expensive as designing cars from scratch.

11/14, 10:51 AM

posted by:

Borat

Johnny, I know Scottish blood is against excessive spending, but something tells me that your medicine can is of good label variety, not exactly Colt .45. One thing Scotchman will save on is whiskey.

11/14, 11:02 AM

posted by:

Payton Byrd

@JakeK66

The Mustang is on a modern platform which is a completely redesigned version 2.0 of the Lincoln LS/Jaguar XE platform. The only thing “not modern” about the Mustang’s engineering is the live rear axle which has been engineered to behave better than any live axle has a right to behave. The Mustang is getting the new Ecoboost V6 to augment the 4.6L and there are rumors of the Ecoboost I4 heading for the base model. Ford has said that every car in their inventory will have Ecoboost as standard or optional in the next couple of years. All of this is info available right here on LLN.

@Ramatai

We drive a Pickup for one of our two family vehicles for economic reasons. My wife drives about 200 miles per week around town in the Titan. At 15mpg, that’s about 13.3 gallons per week which is about $25 per week or about $100 per month. It seats five adults very comfortably, can haul over 4000 pounds (taking concrete, gravel and bricks to our rental apartments is real work), and can tow about 9000 pounds. The payment is $348/mo (paid $21,000 for it with 21K miles on the odo in 2005). So, given regular services of about $50 three times a year, and a full service of about $250 every two years, that’s about $275 per year in maintenance costs. TCO is about $471 per month including fuel and maintenance. Now, the only vehicles capable of doing what this truck does is another truck. We have to have a truck. Even if I downsized to a regular cab V6 powered full-sized pickup (does that actually exist now?), I’d have to trade in the Titan and lose all of the capability of that Titan. Now, what do I do about transporting the family? I have to buy another car. That means another car payment. That means another tank to fill. That means more regularly scheduled maintenance. That means another vehicle to insure. Where is it so practical to have a small car when you have a real life with a real family?

And since I’m big on practicality and economics, I’ll also tell you why Honda was absolutely foolish for not including the Hybrid V6 in the new Accords. 1) Diesel stinks when you pump it. 2) Diesel is expensive disproportionately with its efficiency improvement over gasoline. 3) Getting 32mpg on a 65 mile (each way) commute while riding in luxurious leather on a great suspension with the most powerful car with a Honda badge is much more fun than getting 41mpg on that same commute in a tiny car with cloth seats riding on four spare tires with a commensurately crappy suspension. I paid $28,000 for my 2005 Accord Hybrid with only 5K miles on it. Best. Purchase. Ever.

11/14, 11:14 AM

posted by:

Z06ified

I like their idea of accelerating new product. You need cash to do it though. Ford can do this because they have more cash than GM or Chrysler (relative to their respective sizes).

11/14, 11:39 AM

posted by:

MercMark

I don’t think Ford (Ford family) wants to declare bankruptcy.
I think GM does in order to finally break the UAWs hold.
Just my opinion

11/14, 11:49 AM

posted by:

wbent

Borat, You are an unabashed idiot with absolutely no comprehension of how the industry works or product cycle challenges and the time involved. Mulally is dead on right and is changing the culture at Ford that has a 100 year history, doesn’t happen overnight. BTW the Flex was devoloped prior to his administration for example. Far better option than Wagnor or Press are putting forward, lets shower those two with low interest goverment loans. Blithering idiot!

11/14, 1:10 PM

posted by:

yarddog82abn

LOL…….this is a good one……..
At lest one of the 3 look to be trying to do something…..

11/14, 1:14 PM

posted by:

yarddog82abn

Chrysler paying executives bonuses, and GM crying BK, and opening plants in “RUSSIA”….

LOL……………………..

11/14, 1:33 PM

posted by:

Ramatai

@Payton Byrd

Your logic for the Titan is perfectly sensible, but how many other people use a Titan as a truck regularily enough to warrant the extra fuel? When I was on holiday in the USA we played spot the pick-up with something in it, by my reconing 1% of trucks were used as trucks. If I need to haul stuff I hire a van for the day it makes more sense to me, but I live in London.

I have driven both diesel and petrol, obviously petrol is preferable but I get 40plus mpg in london with constant stop start motoring on a diesel. I used to get damn all out of my V6 petrol, went like stink though, 60 to 100 ahh happy days. On a long trip I get loads more than 50-60mpg, diesel costs $9 per gallon here, petrol about $8. It sure adds up and is the main reason why cars are more fuel efficient in europe. As for hauling large loads a diesel is obviously better at that than a petrol no one could argue that point.

I agree diesel doesn’t smell nice but then neither does petrol. It really wasn’t on my list of concerns, running costs were higher up. My car is serviced onc a year or every 20K miles. As for hybrids I’m not convinced they are a real solution, if you take in to account the weight and complexity. I’m sure they offer something but think there has to be another more sensible solution out there.

11/14, 2:09 PM

posted by:

Catiadesigner

Petrol in the USA smells like diesel in the UK, I don’t know what they do with it, but it stinks.
Petrol in the UK almost has a clean smell compared to the US stuff.
Me ? I just wish I could get a Peugeot turbo diesel in the USA, my Father has a 307 station wagon and it goes like stink and still gets 60+mpg on a run.

11/14, 5:07 PM

posted by:

Borat

@Ramatai
Truth be told that most of us Americans will not fit into European cars. If you see links to their web sites some folks were insetting into their names with their own pictures, you would understand why smallish cars are not an option. Our arses are huge! Hence the need for Silverados/Tundras/Titans with V8, never mind bricks (I am sure no wife ever hauled them in SUV/truck) it is the heft of owners that require tonnage hauling ability.

11/14, 7:17 PM

posted by:

Blakkarr

Dare I say it…

“FORD makes a bold move.”

Bring me a Falcon!

11/14, 7:44 PM

posted by:

PW

Ramatai, I don’t know where you’re from, but pickup trucks (especially large ones) are part of the American/Canadian culture. Take it or leave it, but don’t criticize or question it.

11/14, 7:46 PM

posted by:

PW

Oh wait, you said you were from London. Never mind. But alas, one of your own Commonwealth countries, Canada, has large pickup trucks as part of its culture. I wonder what the Queen thinks.

11/14, 8:19 PM

posted by:

falcodore

Blakkar, you’ve got the right idea. Falcon is what Ford U.S needs

11/14, 9:14 PM

posted by:

1c3d0g

I just hope their quality doesn’t suffer because of this measure.

11/16, 2:32 PM

posted by:

Payton Byrd

@Borat

Wives are the reason most guys in the US buy a truck. I know home ownership is a lot more common in the USA, and we tend to own bigger, more spacious homes as well. Those bigger and more spacious homes with big spacious lots inevitably get filled with big furniture and lawn equipment. When the wife wants to go to Home Depot or the furniture store, she doesn’t want to go through the hassle of locating a pickup for rent, paying over $100 to do so, and then have to take it back. For low mileage drivers, the economics of a car versus a truck are overshadowed by the pure difference in lifestyle here in America. Also, we tend to have more children and pets than Europeans. I know that you guys have a hard time wrapping your brains around the differences in our culture, but just because you don’t understand it doesn’t make your opinion more valid than our own opinions.

Finally, gasoline is $1.77 where I live, diesel is still $2.99. That’s a 40% premium. I’ve yet to see a diesel get 40% better mileage for the same performance.

 
 
You need to log in with your user name and password before you can leave comments.

    

Forgot your Password?

Don't have a user name yet? Simply fill in the form below and click the link provided in the
confirmation email. You must supply a valid email address to complete the registration process.

  
 
 
 
  • Login
  • About
  • Contact
Please note that you need to log in with your user name and password before you can leave comments.
  

login
cancel
Forgot your Password?
Don't have a user name yet? Click here to register now.

Simply fill in the form below and click the link provided in the confirmation email. You must supply a valid email address to complete the registration process.

  
submit
cancel
Leftlane is the leading source for automotive industry and vehicle news, new car research, future vehicle information, and reviews. Read by car shoppers, driving enthusiasts, autoworkers, executives, and investors, the website is updated throughout the day with the very latest auto news - as it happens.

Leftlane also provides consumers with accurate and media-rich information on every car currently on the market. In-market shoppers can review specs, read overviews, view high-resolution images, watch videos, and estimate pricing. No other automotive publication brings together the same degree of timeliness, thoroughness and accuracy as Leftlane.
 
submit
cancel