Ford PR is blooming all over! On the same day that The Detroit News declares that "Ford's recovery gaining traction," page one of The Wall Street Journal claims "Ford Eyes More Cuts As Recovery Advances." Readers of both pieces will find plenty of reasons to be cheerful: cultural change! lower labor cost (eventually)! common components! reduced development time! positive operating cash flow! less brands! more filling! So… who wants to talk about Ford's U.S. market share? Mr. Hoffman? Mr. Spector? Do we have to do EVERYTHING around here? FoMoCo's market share dropped from 15.1 percent at the end of 2006, to 14.2 percent at the end of 2007, to 13 percent this April. Big deal. "I don't care what market-share level you are," Mr. Mulally told the Journal. The goal is to "get back to profitability." Oh, and the New York paper says "According to people close to Mr. Mulally, he is looking at selling Volvo despite Ford's repeated statements that it intends to hang on to the brand. Similarly, he hopes to shutter the ailing Mercury brand." Hopes and dreams. Drive one!
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I like many of Ford’s offerings (even the Focus I rented for a week wasn’t SO terrible, once you got inside and didn’t have to look at it) and I really hope to see them pull out of their troubles. This is probably a good move, although I rather like Volvo cars and Ford has probably benefited from owning them what with the safety improvements (which also caused them to cannibalize Volvo sales proclaiming the Taurus to be the safest car on the road). I think Ford is more likely to succeed than GM because they are less fragmented and produce pretty good vehicles across the board.
Also, kudos to Mulally for not focusing on market share. Running a business should be about making a decent profit while providing a great product and/or service, not about being the biggest gorilla in the forest. Toyota finally muscled their way into the #1 spot and their quality has suffered substantially.
Wow, go figure – someone from outside of Detroit comes in, and next thing you know, Ford is doing smart things like ditching brands and reducing the number of unique parts used across all vehicles. Who’da thunk it?
Go Ford! I’m pulling for ya!
It’s been no secret in the Ford community that phasing Mercury out has been a high priority for Mulally since he came aboard. It’s possibly the most pointless brand sold in the US aside from Isuzu.
AM clearly means it when he says “One Ford”. That and his admiration of Toyota are clear signals that Ford will make a go of it with two brands.
Given that Volvo’s four models combined US sales are half of that of the Fusion (106,354 units in 2007) and worldwide sales (458323 units in 2007)close to what the US Camry does each year, this is a no brainier. Same with Mercury given the impending death of the Grand Marquis.
Does this put Lincoln one step closer to producing the MKR concept? :D
It’s good to see that Ford are gaining traction. I always maintained that Ford have the best chance of coming back stronger and will become Toyota and Honda’s worst nightmare.
Mulally is actually making some real decisions which will help Ford. Like brownie said “someone from outside of Detroit comes in, and next thing you know, Ford is doing smart things like ditching brands and reducing the number of unique parts used across all vehicles.”
But, let’s not get carried away here. Just because Alan Mulally has SAID that it’s going to happen doesn’t mean it’s ACTUALLY going to happen.
P.S. If you’re reading this Mr Mulally, save Ford a few more million and sack Mark Fields! Utterly useless manager.
Would Ford still contract Volvo to develop platforms and safety systems?
Also, I hope Ford can find another job for Jill Wagner. I’d certainly like her to stick around!
KP:
Actions do speak louder than words: See any new Mercury product on the horizon?
They have to sack Mercury – the rebranding towards women and “urban” customers has been a dismal failure, and the downmarket move of Lincoln to being rebadged Fords leaves Mercury out.
It is too bad – Mercury was my favorite Ford brand, at least until they feminized it.
Wow – selling Volvo. That was one of the few areas where they were able to do some good platform sharing (C30, Mazda3, Taurus/Five Hundred/s80).
I always thought Volvo’s biggest problem was brand identity – when they stopped being the “safest” car (or was that regulated away from them?) they struggled to find a hold – they introduced the R line so they could be more BMW but that died, they did the SUV thing, but it is old and forgetable now and the S60 is the poster child for Volvo it is perfectly average and completely forgetable.
A shame, they had a great brand that wasn’t afraid of the word wagon.
I love TTOC…but every once in awhile, it seems to implode.
Like all the late night comics…they do a good job of critisising, but have difficulty looking back and explaining how they were so wrong.
Its much easier to be a critic than a solver.
Look at all the past death watches for Ford and GM.
But anybody who really understood and listened, we knew that there were some things going on behind the scenes.
Big things.
Now look out because Chrysler could change the game over night with its diesels.
Ford has begun to use its Euro group to refresh the USA.
I am happy for our brands futures.
I think that one thing that hurt Volvo (especially their wagon sales) was the movement of Subaru into the low end of the Volvo market with cars that offered a decent combination of safety, all-wheel drive, and reasonable luxury at a lower price point.
Yes, Mercury has been feminized for some time now, as taxman100 has mentioned. But in 1967 the brand was advertised as “THE MAN’S CAR” at least on their sales brochures (no joke; this was right on the cover in large print). I guess they figured that a woman would buy a car promoted as a “man’s car”, but a man would never buy a car promoted as a “woman’s car”. Golly, do ya think that might still be true today?
I have fond memories of the Mercurys of the 50s and 60s, but the brand has been meaningless for years. Business is business. Time to pull the plug.
I’ll be so boring as to quote myself from an editorial here back in 2006:
Mulally is already applying his knowledge to the task at hand. For example, he knows that Ford must align itself more closely with its suppliers’ best interest. FoMoCo’s suppliers are wobbling with fatigue, having been squeezed dry by their overlords. They’re so fed up they’ve started to squeeze back, exploiting the weakness of the rulers up at the Castle. Hopefully both sides will see the light before they force one another off the field of battle. Ford’s already seeking a more constructive relationship with its key suppliers, so don’t think Mr. Mulally is simply holding Thursday chat sessions.
Mulally’s also begun realigning his forces in the field, making the various divisions understand they’re answerable to High Command and that the brandmash has got to stop. That’s going to be the tough one. There are hundreds of stakeholders who will be resisting any transfer of power back to the corporate mothership. I suspect this is why Mulally insisted on being co-director along with Bill Ford. A fly on the wall would have heard this: ”I’ll do it, but only if you’re willing to rain hell on the holdouts that will be fighting my changes. You and me Bill, we’re in this together.”
Ford has the best crack at a recovery among the Detroit car majors. Instead of hoping for gas prices to drop (the inanity of today’s editorial in DetNews is staggering), or for people to go on losing their minds before buying a battleship sized car – Mulally is tuning Ford to deliver tomorrow’s vehicles as soon as possible. He’ll sacrifice market share (something GM should have done years ago instead of drowning in their hubris) until he hits profitability, then he’ll realign for growth with a relevant product portfolio.
Interesting tidbits of news here.
If Volvo goes, then why not? Kill Mercury too. Lincoln can play in that space, since they badge engineer Fords at a more Lexus/Toyota level. If/when things get better for FoMoCo, it could be 1939 all over again.
15 years from now, a new Mercury (singular) might arrive. No Edsel jokes, please.
I’m glad to see that Mulally is getting some of the things done that needed done years ago. He’s also right in ignoring market share and making the company profitable. Once profitable again then they can work on growing the market share.
So far he’s the only one I see as having a good grasp of what is going on and working to correct it out of the Detroit three.
I still won’t buy a Ford yet, but perhaps given some time with him at the helm that may change.
It would be a shame to see Volvo go. The brand does have a certain unique Sweedish appeal. The platform sharing has been a boon for Ford. Volvo sales may not be performing all that well, but it hasnt been the money pit that Jag was. I think it may be worth holding on to as it seems to contribute to Ford. At the end of the day, I think the best route is to fix Ford and Ford brand vehicles, so if Volvo has to go to accomplish that, so be it.
As far as Mercury goes, its demise may not be official yet, but everyone knows the axe man cometh.
Go big Al.
But put the Merc grill on the Fords. The three bar looks oh so Wal-mart.
Bunter
Hey, if they can figure out a way to consolidate so that they make a car as attractive as the C30, with the handling of the Mazda3, and the economy of the Focus, I’ll be happy.
Interesting to see which dies first, Mercury or the Grand Marquis. Of course, Mercury has always been full sized sedans, so without the Grand Marquis, may as well kill the brand.
In Canada, it is the Ford Grand Marquis, only with Mercury badges. An odd bird.
They can’t kill Mercury without killing Lincoln too. Sales at every Mercury-Lincoln dealer throughout the country would instantly drop by more than half, which means a whole heck of those dealers would be forced to go out of business, dropping sales of Lincoln to the point that Ford would have to shut it down too.
Besides, Mercury is profitable. Hard to screw up rebadging Fords, slapping on a little more chrome, and then charging a grand more for them.
Plus, if they were going to sell Volvo, they probably would have bundled it with Range Rover and Jaguar and given all of PAG to Tata.
I smell bullshit on this particular rumor.
Wait… so where are April’s numbers? That’s right, they don’t come out until next week.
Ford’s marketshare as of the end of Q1 was about 15%, relatively unchanged from a year earlier.
Just making sure that we’re telling the truth.
Geotpf :
April 23rd, 2008 at 6:44 pm
They can’t kill Mercury without killing Lincoln too. Sales at every Mercury-Lincoln dealer throughout the country would instantly drop by more than half, which means a whole heck of those dealers would be forced to go out of business, dropping sales of Lincoln to the point that Ford would have to shut it down too.
Besides, Mercury is profitable. Hard to screw up rebadging Fords, slapping on a little more chrome, and then charging a grand more for them.
Plus, if they were going to sell Volvo, they probably would have bundled it with Range Rover and Jaguar and given all of PAG to Tata.
I smell bullshit on this particular rumor.
If I’m not mistaken, Mercury’s so far down the tubes that they’ve been outsold by the Lincoln brand for a number of recent months. Of course it would vary by dealership, but overall, I think this is the case.
I seriously thought Mercury had been axed… actually, come to think of it, maybe it’s the case in Canada.
… True, I was in Massachussetts earlier this year, and I do recall the “Mariners” and “Montegos” that I never see here in Canada.
I think Mercury is dead in Canada, and — know what? — no one noticed.
AKM said “I hope Ford can find another job for Jill Wagner.”
That’s already happened. Jill’s a special consultant to Mulally for product planning. For example, she told AM “You’ve gotta put Mercury on your list!” and sure enough, Mercury’s now on his hit list.
Taxman 100- When was Mercury not feminized?
Bunter:
Go big Al.
But put the Merc grill on the Fords. The three bar looks oh so Wal-mart.
Beaten!
Yes, the “Mach 3” grille treatment, while ‘manly’ (as it reminds me of shaving), is already old.
And I think that the Mariner looks better than the Egg-Crate Escape.
Hmm — I must be succumbing to those “estrogen analogues” the scientists are talking about…
Too bad the optimism about Ford doesn’t reflect the realities of the working-level operations.
As someone intimately connected to Ford’s seat engineering (but nota Ford employee, thank God!) I listened to the podcast from Jerry Brown with interest. That guy should get in touch with the people who qwork for him. Or perhaps more importantly, the people outside Ford who do the actual work.
In any case, Mullaly can say and do all the right things, but it will all come to naught if the minions running the show don’t change.
A year or so ago I wrote, in TTAC, about seat tracks and the multiplicity of seat track mounting feet. If I was to write that story today, I could add many more examples along the same lines.
Ford recovery? Not bloody likely.
Remember, Studebaker made the best cars they ever produced in the months before they quit the car business to become a bank and real estate company, among other things.
Ford owns oneof the largest banks in the world, and a realestate company with $30 billion in assets. Making cars is a very unprofitable sideline.
If Volvo can be sold for a profit, or at least sold to eliminate another cash drain, then it should go. Quality and desirability of the cars aside, if they don’t contribute to the mother company, they have no place sucking up resources.
Bob
Mercury is only selling something like 3 vehicles per dealer per month. I can’t imagine that is supporting many businesses. With the pairing of Lincoln and Mercury most of the franchise costs should be avoided in a Mercury closing. Seems like a no brainer. I would be very impressed if Mullaly pulls that move off.
Similarly, getting rid of Volvo would be a great idea. I don’t really see how they’ve been helpful to Ford other than the PAG loss offsetting in the past. The D3 platform has been a major flop so far and Volvo’s fortunes are fading fast. Perhaps the Flex and other variants of the Volvo platform will do better this go around but I have my doubts. The successful platforms have thus far come from Mazda.
I have to admit I’m hearing about really positive things at Ford from inside and out lately. I think they may have a chance after all.
Did anyone else see this yet?
http://biz.yahoo.com/ap/080424/earns_ford.html?.v=8
I have to agree that Mercury could easily go and nobody would miss it at all. Except automotive historians, of course. Badge engineering of cars is, or should be, dead. Mercury is simply a money wasting distraction.
Personally, if Ford execs do read this, I want to say “thanks” for swallowing your pride over the AFA thing – perhaps other companies will learn a lesson you learned, that potentially insulting a huge portion of the public to snuggle up to 1-2% (who buy Subarus anyway) doesn’t play well in Peoria – or Texas, where you really truly need to turn around the fact that a LOT of new full sized Toyota pickup owners have turned in Ford pickups on trade over the last year or so.
I also want to mention the fact that bringing back real car names would benefit Ford and Lincoln. I’m sure I’m like a huge portion of the public, in that when I hear a jumble of letters as a car’s name, I simply don’t register or remember them. A name means something (especially if well chosen). For example, bring back Zephyr for Lincoln’s sportier CAR line.
Perhaps bring some iconic, classic, clean styling for a luxury Lincoln CONTINENTAL CAR line – yep, even with rear hinged rear doors, please.
Also, did anyone else “happen” to notice in the linked article about Ford, that they are now breaking out Volvo’s numbers for the first time?
I have to wonder if Volvo will soon be in the hands of some company such as Peugeot-Citroen. At least Peugeot group would then have some kind of presence in the United States, and could potentially re-launch the Peugeot brand in Volvo dealers, as a lower-cost Euro-alternative.
Interestingly enough, Peugeot is already collaborating with Mitsubishi by building Peugeot and Citroen SUVs, and Mitsubhishi has an underutilized plant in Normal, Illinois.
Imagine Volvos coming from Illinois, and Peugeots from South America being sold in the US at Volvo dealers…. it would work.
Also, Ford could then concentrate on Ford and Lincoln, by killing off Mercury. It is simply a distraction.
I’m hoping Ford succeeds. Here in Michigan, we need a Michigan based company to survive.
“The platform sharing has been a boon for Ford.”
To quote Chris Matthews: Hah! The Volvo based Fords have been flops. Five Hundred/Taurus and Freestyle/Taurus X. The current Taurus is perhaps the best vehicle in it’s class (if you limit the class to 2.8 members), but it isn’t selling worth a darn.
Mazda has contributed greatly to Ford’s successful developments, but Volvo …. not so much.
Actions do speak louder than words: See any new Mercury product on the horizon?
@Lichtronamo:
It dawned on me a day after TTAC blogged that Ford just announced a fairly substantial MCE for the Fusion (a staggeringly important vehicle) but didn’t mention the Milan at all. Mercury’s not getting a Flex, but Lincoln is (MK…T, I think?) Mercury didn’t get an Edge, but Lincoln did. Seems they’re just going to starve it to death.
@Geotpf:
Sounds like you’re in the minority on this one. It seems to make great sense to me.
6G74 :
April 23rd, 2008 at 8:23 pm
If I’m not mistaken, Mercury’s so far down the tubes that they’ve been outsold by the Lincoln brand for a number of recent months. Of course it would vary by dealership, but overall, I think this is the case.
Maybe in some months, but the overall trend is clearly that Mercury sells more units than Lincoln.
http://media.ford.com/article_display.cfm?article_id=27952
Total sales during the first three months of 2008:
Lincoln: 28,471 (down 18.9%)
Mercury: 34,435 (down 21.5%)
For March alone, things are even worse for Lincoln:
Lincoln: 10,913 (down 26.1%)
Mercury: 14,333 (down 17.7%)