Daily Edition: Jan. 24, 2006

January 24, 2006

Ford Charts The "Way Forward"

Bill Ford 2006

Bill Ford 2006

Ending months of speculation, Ford Motor Co. officials finally lifted the veil of secrecy surrounding their "Way Forward" turnaround plan, announcing 14 parts and assembly plants will close between now and 2012, while as many as 30,000 hourly and salaried jobs, and 12 percent of its executive ranks, will be eliminated.

Despite deep cuts affecting virtually all Ford "stakeholders," Monday's announcement left a number of questions unanswered, including the fate of several Ford assembly plants, as well as specific plans to support the turnaround with much-needed new product. Ford officials promise to fill in some of those gaps in the weeks to come, with company sources providing some of the details for TheCarConnection.com.

"We all have to change and we all have to sacrifice," said Ford Chairman and CEO William Clay Ford Jr., as he outlined the situation facing the company founded by his great-grandfather, Henry Ford I, 102 years ago. But he left the details of the so-called "Way Forward" plan to Mark Fields, the young President of theAmericas, who bluntly repeated his mantra that Ford must "change or die."

His words were driven home by the first of three Monday morning briefings for reporters and industry analysts. Chief Financial Officer Don Leclair painted a picture of a company improving its fortunes in much of the world - even as its home market is in freefall.

Ford Charts The "Way Forward" by TCC Team (1/23/2006)
Deep cuts - but are they enough this time?


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More to Come from Ford

It took a team of 60 Ford insiders, working virtually without break for 100 days, to pull together the Way Forward turnaround plan. Yet several sources familiar with the project tell TheCarConnection.com that the project is far from complete.

Of seven assembly plants expected to close, only three were specifically named on Monday. Two others will follow shortly, TheCarConnection has learned, including the Ranger plant in St. Paul, Minn., and another sorely underutilized assembly line in Cuautitlan, Mexico.

Work on the various speeches given on Monday continued almost to the moment before senior Ford managers, led by CEO Bill Ford, took to the stage. That reflected, in part, an ongoing debate over just how much information to reveal to the world. In the end, a number of key details were omitted, in part for the sake of time, in part to maintain certain proprietary decisions.

But "a lot will be coming out over the coming weeks and months," confided one high-level source, immediately after the announcement was completed. Others confirmed that comment.

More to Come from Ford by TCC Team (1/23/2006)
Automaker will be making lots more news in the coming months.


Ford Earns $2B In 2005

Ford Motor Co. did better than expected financially during the fourth quarter, eking out a small profit even though its core automotive business was under siege and its credit rating under extreme pressure.

William Clay Ford Jr., chairman and chief executive officer, said Ford Motor was profitable for the third consecutive year in 2005 and its automotive business was profitable everywhere but in the United States. "We accomplished many things in 2005, including the successful launch of the new Ford Fusion, Mercury Milan, and Lincoln Zephyr, introduction of the company's new innovation initiative, completion of the sale of Hertz, and an agreement with the UAW to help reduce rising healthcare costs," said Ford.

"Excluding North America, our automotive operations made great progress in 2005. We must keep working to improve our business in each and every region," Ford added.

John Murphy, the auto analyst at Merrill Lynch, said in a note to clients that Ford's fourth quarter was better than expected. "Surprisingly, the main driver of the upside of the quarter was Ford's automotive operations," he said. In addition, the company's liquidity position looks relatively secure since the company is now sitting on $25.1 billion in cash, Murphy said.

Ford Earns $2B In 2005 (1/23/2006)
Ford Credit drives third profitable year in a row.

Special Report: Ford's Way Forward (1/23/2006)


Toyota Makes the Move to NASCAR

NASCAR Camry 2007

NASCAR Camry 2007

In a press conference held at NASCAR's Research and Development Center in Concord, N.C., this afternoon, Toyota announced that it would be accelerating its NASCAR program with entries in the Nextel Cup and Busch Series utilizing the Camry model beginning in 2007.

The announcement was made by Dave Illingworth, senior vice president and chief planning and administrative officer for Toyota Motor Sales, USA.

"Next year - 2007 - will be a special year for Toyota in more ways than one," said Illingworth. "Toyota will be celebrating its 50th anniversary in the United States, and we will be joining the NASCAR Nextel Cup Series, America's premier racing series. Toyota has been an important part of the U.S. motorsports community for almost 25 years. We've competed and won in different series and on tracks across America. Toyota drivers and teams have won championships in a variety of different series. But, if you want to compete against the best, in America that means NASCAR.

"We look forward to February of 2007 when the green flag waves to start the Daytona 500 and the starting lineup features the Toyota Camry."

Toyota has been competing in NASCAR since 2000, starting out in what was then known as the Goody's Dash Series for four-cylinder sedans, winning its first race in 2001 and capturing the series championship in 2003. The company moved up to the Craftsman Truck Series in 2004, where it has noticeably contributed to raising the competitive level of that series. Toyota has been racing in America for 24 years, having competed and won championships in IMSA, CART, IRL, and off-road racing. Their trophy shelf includes coveted hardware from events including the Rolex 24 at Daytona, 12 Hours of Sebring, the Baja 1000, and the Indianapolis 500. Toyota is also currently competing in the Formula 1 World Championship.

The company, as the first Japanese-owned firm to compete in what has traditionally been an all-American series (if you overlook the fact that Dodge is now part of the German-owned DaimlerChrysler empire), is sensitive about wanting to be welcomed into the "NASCAR family" and not alienating any fans. Illingworth took pains in his announcement to point out the many manufacturing plants located in America, the number of jobs created by Toyota and the millions of cars and trucks that are constructed on these shores.

Illingworth was welcomed by NASCAR CEO Brian France, who joined him in unveiling a Nextel Cup Camry. Illingworth said that, unlike the Craftsman Truck Series, no Nextel Cup or Busch Series Toyotas will have Toyota sponsorship, and that the manufacturer support will be on par with what other manufacturers currently provide in the Nextel Cup and Busch series, with no vehicles being engineered and/or built by Toyota Racing Development, as was the case with their entry into the Craftsman Truck Series.

Toyota will host a media event at Lowe's Motor Speedway on Tuesday night, at which time some of the teams and sponsors who will campaign Camrys will be introduced. -John F. Gardner


New S60, Facelifted XC90 Due in July

The facelifted Volvo XC90 SUV and S60 sedan could get their world debut at the revamped British International Motor Show in July.

The bi-annual event has moved from Birmingham to London this year in a bid to boost attendance figures and convince more carmakers to attend. Volvo U.K.'s managing director Hugh Reid said he was optimistic he could convince Swedish HQ to back the exhibition with a pair of global premieres.

"The shift to the capital deserves the support of as many manufacturers as possible to give credibility to the 'international' element of the name. We are talking to Sweden about it; these two cars are examples of the sort of things that could be launched at a rejuvenated British Motor Show. I'm not go to say it's definitely going to happen because things might change over the next few months, but it's what I'd like to see." Neither facelift is expected to be dramatic, with mild cosmetic changes to keep the models fresh. -Richard Yarrow


ASC Has Deal for InfiniVu

Just a fortnight after it unveiled its new patent-pending convertible roof concept, component firm ASC Global has signed a deal which will see it go into production.

Called InfiniVu, it features sliding panels that stretch from front to back on the vehicle's top. At the NAIAS debut, bosses at the Michigan firm claimed it was so innovative it actually created a new market segment between cars with sunroofs and full cabrios. They dubbed it the 'sunvertible.'

Spokesman Tim Yost said, "We already have at least one OEM

customer for one of our InfiniVu systems, on a car to be launched in about a year. We can't say which OEM and which product line at this stage." However, he did give a clue by saying that the company was "presently focused on foreign-based OEMs selling into the North American market." -Richard Yarrow



Sales of Exotics for 2005

A couple of weeks ago TCC had a round-up story on 2005 U.S. auto sales, which at the end had a brief paragraph itemizing eleven-month sales of the handful of "exotic" cars in the market, sourced from an Automotive News summary. Among those listed was Lotus, with sales reported as a mere 96. Almost immediately, several Lotus fans protested, including one in Texas who sent a copy of a Lotus U.S. news release from August 2005 saying that 2385 Lotus cars had been delivered in the preceding July-to-July 12 months. While July-to-July and January-to-December aren't comparable, they shouldn't have been THAT different. Eventually the Lotus PR director, Colin Price, got back to me with what I thought was a sound explanation:

First, Lotus sales in 2005 came to about 2300. Second, the numbers reported in Automotive News for some of the exotics are estimates, as noted in a tiny footnote I had missed. "We don't report our sales to Automotive News," Mr. Price wrote.

"Because of our small size monthly fluctuations in production and transportation can create large variations in sales," he explained. "If we receive 20 fewer cars in a given month it can appear that our sales have fallen by ten percent and the next month they may appear to have increased by 20 percent. As an example if we sold 180 cars a month for three months we'd have 540 sales at the end of the quarter. However, if we had 180 one month, 160 the next and 200 the third month, we'd still have 540 cars at the end of the quarter. But it would appear that our sales were down 12 percent in the second month and up 25 percent in the third month. Perhaps more importantly, we have made a conscious effort to avoid focusing on sales volumes. Our small size and flexible manufacturing allow us to adapt to the marketplace."

So, final full-year 2005 sales for the following limited-production exotics were reported by the manufacturers or importers to TCC or Automotive News and are NOT earmarked as estimates: Dodge Viper 1652; Maybach 152; Ford GT 1302; Cadillac XLR 3730; Acura NSX 206; Maserati 2006; Infiniti Q45 1129; Porsche Carrera GT 340, Bentley 3654 and VW Phaeton 820.

TCC hopes the above will please the lovers of Lotus and some other exotics we heard from. At least one of the exotics not listed declined to provide sales numbers when asked. -Mike Davis


FROM THE SOURCE headlines from the latest press releases


UAW President Ron Gettelfinger and Vice President Gerald Bantom, who directs the UAW National Ford Department, issued this statement on the restructuring plan announced today by Ford Motor Co.

"The restructuring plan announced this morning by Ford is extremely disappointing and devastating news for the many thousands of hard-working men and women who have devoted their working lives to Ford. The impacted hourly and salaried workers find themselves facing uncertain futures because of senior management's failure to halt Ford's sliding market share.

"The announcement has further left a cloud hanging over the entire workforce because of pending future announcements of additional facilities to be closed at some point in the future. Unfortunately, analyst and media speculation during the last month has made these events even more wrenching for Ford workers, their families and communities.

"The announced plant closings and future announcements are the subject of ongoing discussions with Ford. Certainly, today's announcement will only make the 2007 negotiations all the more difficult and all the more important.

"Like the 2002 plan, Ford's new 'Way Forward' is based on cutting jobs and closing facilities to 'align' Ford's production capacity with shrinking demand for Ford's vehicles. Then, as now, the focus should instead be on striving to gain market share in this competitive market by offering consumers innovative and appealing products.

"The UAW-represented workers affected by today's action are covered by the job security program and all other provisions and protections of the UAW-Ford National Agreement. Our union will rigorously enforce those programs."


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