Advertisement
Find a Car
Go!

How Low Can Ford Go?


How low can you go?

That was the question repeatedly posed to Ford CEO Alan Mulally over dinner, Tuesday night. It was neither rhetorical, nor personal; Ford’s not launching campaign-style attack ads. But the automaker, which not all that long ago controlled a healthy 25 percent share of the U.S. auto market is having trouble, lately, hanging on to just half that number.

With the goal of hitting 13 percent retail share starting to look less and less likely, would Ford launch an all-out incentive blitz or some other move to shore things up? “Absolutely not,” the former Boeing boss said, over and over, insisting that Ford’s management team is reassessing its options every month.

“We’re not going to draw an arbitrary line,” he insisted, adding that if need be, it will continue cutting back to keep production in line with market demand. The bottom line? Well, it’s the bottom line. Ford is after profits, not market share.

That’s a discipline we haven’t seen in Detroit. True, we’ve heard that mantra before, but when things start to sink, the Big Three have traditionally backed down, rolling out massive giveaways, like the legendary GM employee discount program that cost the giant maker billions but, in the end, ultimately lost it market share.

Staying the course can work, and Ford has a good role model in the form of Toyota, the Japanese giant that surged past the U.S. marque, last year to become America’s second-largest automaker. Jim Farley, the new marketing czar and a key member of Mulally’s management team understands personally how things have worked at Toyota, having worked there until late last year as head of the Lexus luxury division.

There’s no question that Mulally is frustrated by Ford’s continuing decline. The automaker thought it would level out when it slashed back on low-profit daily rental business. And then came the renamed and restyled Taurus, formerly known as the Five Hundred. But even the few hits Ford has had, notably the new Edge and Lincoln MKX crossovers, haven’t been able to stabilize the situation.

The current, unstable economy has only made matters worse, hitting hard the big trucks – notably the F-Series pickups – that have been Ford’s foundation for so many years. Rising fuel, steel and commodity prices – “headwinds,” in Mulally’s terms – have only worsened the situation.

So, how low can Ford go? Eventually, there’s no more room to cut. And even with massive concessions from the United Auto Workers Union, and even with incredible flexible new plants, Ford has to make a stand.

Earlier this week, Farley told members of the automotive media that Ford needs more product. And there’s a fair bit coming, if the automaker’s plans for the Detroit Auto Show are any indication, with a re-skinned and updated F-Series, a minicar concept and a prototype Lincoln crossover all reported to be on the schedule.

That minicar, it appears, will be the first step in a critical transformation at Ford. When Henry Ford I created his empire, he set up operations all over the world, but they operated as independent fiefdoms, a sharp contrast from the globalized system that is working so well for Toyota. Mulally is committed to “fully globalizing” his company, he explains, and that so-called B-, or minicar, will be the first product jointly developed by Ford’s North American and European operations.

Next up, look for a globalized version of the Focus, and then some of Ford’s larger models. Obviously, not everything will be global. “There’s not much opportunity to sell the F-Series on Paris’s crowded streets,” Mulally says, with a laugh. On the other hand, notes Farley, today’s younger buyers “are far more open” to global styling, including the hatchback designs their parents hated.


Advertisement
 
Follow Us

 

Have an opinion?

  • Posting indicates you have read this site's Privacy Policy and Terms of Use
  • Notify me when there are more comments
Comments (4)
  1. IT IS A DISGRACE THAT AMERICAN CAR MNFRS HAVE LET THE JAPANESE OUT SELL AND OUT MARKET THEM.
    A BLITZ AD CAMPAIGN TOUTING OUR CARS, A HYBRID OFFERRING IN THE FOCUS, EDGE, AND TAURUS MODELS. COPY THE BENZ AUTO DIESEL TO THE LINCOLN LINE AS AN OPTION TO WHAT IS BEING OFFERRED NOW.
    THE SAME STORY FOR THE TRUCK LINE.
    IN SPITE OF WHAT THESE DESK CLERK EXECUTIVES THINK, EVERY CAR SHOULD BE ECONOMICAL IN ITS GAS USAGE. IT'S ONE THING TO BUY A CAR BUT YOU ALSO HAVE TO USE IT, AND WHEN GAS IS SO COSTLY, THE MAIN CONSIDERATION IS WHAT THE PRODUCT OFFERS.
     
    Post Reply
    Vote
    Bad stuff?

  2. The last 4 new cars I have bought have been Fords, but they better get their act together if they want to keep me as a customer! With the rising price of fuel I want a car that can get at least 50 (USA) MPG & must be a minivan, hatchback, or stationwagon. So far, only the Prius or forthcomming VW Jetta TDI Sportwagon which is comming in summer 2008. Don't give me the BULL that Ford & the rest of Detroit coesn't know how to build a fuel efficient car since they are in Europe & the rest of the world. My last new Ford, which I am still driving with 106,000+ miles is a 2001 ZX-3 5 speed. The European diesel Focus gets 50 MPG. My Focus' MPG STINKS! It is under 30 MPG! Will this be the "Last Ford in my Future?" Ford, are you listening?
     
    Post Reply
    Vote
    Bad stuff?

  3. I can only speak for Ford Motor Co,however I feel that the same problem is happening to the other American car companies. I have owned/ driven Fords for the last 20 years, there are a total of 18 Ford Company vehicle in our family, most of us will not be buying another Ford product again. It has alot to do with all the problems that have occured with these vehicles and the lack of interested by the Manufacturer in repairing these problems, I feel if Ford wants to keep brand loyality and sell vehicles, they must satisfied the current customer/owners, make people want to purchase your products because they were happy with their old one, changing the name or offering a rebate will not move the metal, reliability and customer satisfaction are more important.
     
    Post Reply
    Vote
    Bad stuff?

  4. Change MANAGEMENT-------Bring back IACOCCA!!!!!!!!!!!!
     
    Post Reply
    Vote
    Bad stuff?

 

Have an opinion? Join the conversation!

Advertisement
Try My Showroom
Save cars, write notes, and comparison shop with hi-res photos.
Add your first car
Advertisement
Take Us With You!
   
Related Used Listings
Browse used listings in your area
Advertisement

 
© 2014 The Car Connection. All Rights Reserved. The Car Connection is published by High Gear Media. Stock photography by izmo, Inc. Send us feedback.