Loose cannons. Where would TTAC be without them? Now that GM Car Czar Bob Lutz has his bankruptcy-proof pension to think about (no thanks needed for the early heads-up, Bob), the man of Maximum has somehow learned to shut the f up. Bob “Operationally Bankrupt” Nardelli hasn’t said boo to a goose since telling the feds he wasn’t earning any salary for driving Chrysler into the history books. Ford’s Presidente del Americas Mark Fields is flying low, maybe even commercial. The head of the Presidential Task Force on Autos, Steve “Chooch” Rattner, is as taciturn as he is tyrannical. These days, GM’s VP (“Very Profitable”) Mark LaNeve is about as good/bad as it gets. At least until last night, when former Ford CEO Bill Ford played BMOC (big man on campus) at the green love-in known as this year’s Fortune Brainstorm Green conference. The MSM has yet to chronicle the PC hoedown. But according to earth2tech.com (who supplied our headline quote), Former FoMoCo CEO Bill Ford’s mea culpa was mucho maxima.
While the company has brought in a legion of experts over the years to help with vehicle planning — helping to anticipate where the market would move over the three to five years it took to develop a new vehicle — but it “might as well have just tossed darts,” said Ford.
Just a few years ago, he said, the buzz at a conference like this one, held in Southern California, would have been about hydrogen cars, which he said “would have been the holy grail,” and ethanol blends, for which the company has made a big push with its flex-fuel vehicle lineup. Even now, he said, it’s not at all clear to the company where vehicle technology will end up.
GreenTech confirms Ford’s ongoing lack of, uh, focus. Or is that its sensible policy of spreading its bets on a various environmental technologies (excluding, it now seems, hydrogen fuel cells)? We deride, you report.
In an effort to make more fuel-efficient vehicles, Ford Motor is placing its bets on a number of alternative technologies, including electric vehicles, biofuels, and clean diesel.
Confident yet? Well, Ford didn’t forget the whole small, conventionally-powered automobile thing.
Ford plans to bring small cars designed originally for congested cities in Europe to the U.S., he said.
“The downsizing of the fleet is going to happen. We at Ford are placing a big bet on that,” he said. “It’s a bet we’re making because we believe that it’s the right thing to do. Whether we get the timing right–don’t know.”
It’s too bad GM made the Cavalier, if you know what I mean.
Don’t deride him! I love this man… He basically admitted the consultants he hired were full of crap, how refreshing.
Everyone has screwed up badly. I think his candid assessment of Ford’s mistakes is refreshing and even inspiring. It sure beats the “everything is fine” Kool-Aid coming out of GM, Chrysler, and other.
Also, I don’t think that covering multiple bases on alternative technologies is so crazy. The biofuels and clean diesel programs are probably cheap since the technology has been around for a while. And the electric vehicle program they have to keep for PR reasons.
You are always “tossing darts” when you use the gold rush mentality as the main instrument of your business plan.
Cavalier was a great car and sold in huge numbers. GM should have stuck with it instead of trying to play VW with Cobalt.
I’m still rooting for Ford. Not enough to buy one, but I hope they survive.
Bill Ford makes George Bush sound eloquent. If you heard him speak off the cuff, you would be very afraid to ride in any car built under his reign as CEO.
Just a few years ago, he said, the buzz at a conference like this one, held in Southern California, would have been about hydrogen cars, which he said “would have been the holy grail,” and ethanol blends, for which the company has made a big push with its flex-fuel vehicle lineup. Even now, he said, it’s not at all clear to the company where vehicle technology will end up.
If someone advises throwing out everything you know and betting on a new technology or process, run away. The more radical the concept, the more likely the suggestor is either ideologically predisposed and/or financially interested in the outcome.
If they talk about “buzz”, “synergies” and/or hail from southern California, don’t stop to pack.
Incremental improvements are best. In this sense, making flexfuel vehicles isn’t a bad thing because they can still run on regular fuel. Making hybrids is ok, too, because you’re incrementally improving an existing design. EVs and hydrogen are a clean break, and no one’s been able to demonstrate a way to break the barriers to implementation.
EVs are getting there as people readjust their expectations, and the more practical EVs morph into hybrids. Until someone has a Eureka! moment, though, hydrogen is going to remain a pipe dream.
I retort. You deride.
It’s always a fresh breeze when someone admits mistakes. All this time I thought everything was just fine in Dearborn.
Cavalier was a great car and sold in huge numbers. GM should have stuck with it instead of trying to play VW with Cobalt.
No kidding. Shame that the Feds don’t allow a grandfathering to FMVSS Regs so older but still commercially viable vehicles can remain in production. The do that in Latin America.
Really, was anyone better off when the KJ replaced the XJ or the Caliber replaced the Neon?
Bill Ford tells it like it is and gets derided for it? It sounds to me like he is telling The Truth About Automotive Forecasting. Nobody knows what the future will bring. Absolutely nobody. Whether the topic be automotive design, economics, war & peace … you name it. The best it gets is well informed guesses. This eternal truth is worth remembering anytime someone says what is “going to happen”.
The most interesting piece of the article is that Bill Ford calls for a tighter regulatory environment and higher fuel taxes so that the company at least knows what the )&)(*&) to be working on:
“But one thing that can help focus markets with dart throwers is regulation. In that sense Ford actually endorses a gas tax hike. “If prices are gyrating wildly,” he said, it becomes extremely difficult to know whether the company is planning the right vehicle or technology (if you’re operating under the assumption that automakers should supply what the market demands, and that there’s a lot less demand for fuel-sippers when gas is cheap). Ford noted that in the EU, diesel fuel “became an easy decision” for drivers after the government decided to make it much cheaper than gasoline.
Bottom line, he said, it’s preferable to have a fairly predictable, stable planning horizon rather than even cheap gas for the short-term. In other words, if gas is going to be six bucks a gallon in five years, so be it — at least he can plan for it.”
John Horner
I didn’t feature the gas tax hike thing because I believe the blogger was reading into Bill Ford’s remarks. Until I see a second source on that one, I’m inclined to believe that Ford was dancing around the subject, rather than calling for a gas tax hike.
Not that it would bother him…
@John Horner – Maybe instead, they should just have a solid lineup and keep pushing for efficiency anyway? Instead of ignoring small cars until high gas and poor economic times anyway. Seems like an obvious plan – oh wait, it is an obvious plan that people have told Detroit of numerous times.
@akatsuki,
I don’t think the dig at John Horner is justified. Ford has a solid small car line up. Ford has and has always had a small car line up. They had the Falcon. Granted, by today’s standards the ’60’s Falcon was large, but at the time, it was a small 4cyl car. Then came the Pinto! They also have the Euro cars (i.e Fiesta and Ka).
When the Focus came out, I thought that was a small car, but then I moved back to Europe and realized just how big it really is!
I just don’t think the line up was the issue. I think in this case, the economic downturn and high gas prices caught them off guard. Not that they were not making the right cars but that they made too many – of all of them! And, when the economy didn’t turn right back around, they continued to build all these cars, both small and large. If you had gone to a dealership in darkest August, they had miles of small cars, right next to the overstock of Expeditions. In other words, there wasn’t a waiting list for small cars.
And if American’s really wanted small cars, it wouldn’t be hard for Ford to divert some of their Euro production stock of Fiesta and Ka’s to America while a new plant in Mexico or Brazil got built.
Cavalier was a great car and sold in huge numbers.
The Big Mac sells in huge numbers, too. Doesn’t make it good.
I like small cars, and I’m willing to forgive a lot, but the J-Bodies (aside from the reasonable powertrain) sucked compared to the Escort and Neon, let alone the Corolla, Civic and Focus. The nameplate had negative equity, and GM was right to scrap it.
Ford would have been wise to let “Taurus” rot in the history books as well.
psarhjinian, I agree on the Cavalier. The same thinking extends to the S10 pickups too. My daughter’s boyfriend had one (that we helped him buy) and after about the third trip for water pump, radiator, etc., the mechanic said “These things have good drivetrains but a lot of the small parts aren’t up to par.” Of course the glove compartment lid was gone, as in all the S10’s I saw. When they came out with the new s10 body (1994, I think), a sales guy was showing me one in the showroom. I got into it and immediately opened the glove compartment; he said “Yeah, they’ve fixed that.” I don’t know about the rest of the little problems though.
I’m with John Horner on this… Bill Ford is the only one of the Big 3 leaders to have the gumption to say, “I need a strong leader to run the company”, and “We’ve done a poor job at product planning”.
Rather than belittle him, he ought to have support for doing the one thing that most leaders (regardless of industry) are unwilling to do – tell it like it is.
The Lutz comparison is silly because Bob Lutz made a habit out of saying ridiculous, outlandish things with little connection with the reality outside of his head. If anything, BFord is the antithesis of Lutzian thought.
… And I’m the furthest thing from a Ford fanboy possible.
Bill did just about the hardest thing any topexec ever has to do-admit he’s not the man for the job and fire himself.
He may really be the man who saved Ford.
BTW-never owned a Ford…yet.
Bunter
+1 on th Cavalier statement. My X had one and it was terrible. Besides the mix of SAE and metric bolts, it was horrible when we were driving to the USGP at Indy and the paint pealed off the hood in one fell swoop! Landed on the windshield, blocking our vision. Scared her silly, sliding it off the road and into a spin in the grass. Good thing those Indiana roadways are wide!
I drove the rest of the way there and back.
The fact that Bill Ford had the vision to recognize in is part of the reason that Ford is in better shape and has a better prognosis. Unlike other executives who are only concerned with getting what they can and the company be darned, Bill Ford is concerned about his families’ legacy.
He took the reins from Jack Nasser several years back with the vision of changing how we do business. He had the intestinal fortitude to recognize that there were others better qualified to bring about the changes that were needed. He’s still willing to admit a real shortcoming that auto manufacturers have to deal with.
Something that they are doing is working on as many technologies as possible that can have applications across the model lineup. One example of this is the changeover to electric power steering in the models. It can be applied to all of our vehicles (I say our because I sell Fords). That technology improves fuel mileage incrementally in all cars and it doesn’t need to be reinvented for every vehicle that is designed.
Mulally wants our factories to be able to adapt much more quickly to different models as the the market changes. Other industries do this quite well (like the microchip industry) and so can an auto manufacturer.
These types of moves, at least to me, will help Ford to adapt more quickly regardless of the twists and turns of demand. The plan is to have a strong vehicle line up across all segments and then have the ability to adjust production to demand quickly and to adapt our designs to use as many common technologies and parts as is practical across the vehicle lines to improve the speed and cost it takes to get a vehicle from the drawing board into production. A secondary benefit to that is it is easier for supply chain management and quality control.
On a personal level, I do hope for a gradual phase in of higher fuel taxes and doing away with cafe standards. That’s a move that would help stabilize planning for all of the manufacturers.
Fortune is carrying the Bill Ford wants a gas tax story now:
http://money.cnn.com/2009/04/21/news/economy/whitford_ford.fortune/index.htm?source=yahoo_quote
I recall Bill Ford saying in other articles that higher gasoline taxes are the way to go.
Kurt.: They had the Falcon. Granted, by today’s standards the ’60’s Falcon was large, but at the time, it was a small 4cyl car.
The American Falcon never came with a four-cylinder engine. It was initially available with a small six; a larger six was optional for 1961. For 1963, the small V-8 was added to the option list.
As a native of Ford Country (though 25 years gone now) I can’t help but hope that Ford can succeed.
I have never owned a Ford (fond memories of my Dad’s old ’50’s Mercury, though!) but think that there is a certain wisdom in incremental change vs. magical thinking. Nothing wrong with transitional technologies like hybrids; Ford just got a little bout of GM-itis for awhile and failed to capitalize on their early-adopter status with the Escape hybrid and opted for the high-profit big-vehicle route in the fat years.
And I have to agree with many of the above comments: whatever his reasons – and I’m sure there were many, and not without some internal contradictions – Bill Ford knew when to step down and hand over the reigns, and to someone who is specifically NOT from Ford Country.
As a company, though, they really benefitted from good timing by mortgaging the farm (even the Sacred Blue Oval! GASP!) to raise cash while asset prices were still high; was this because they were in bad shape earlier than their bankrupt brethren, or just earlier to get over their Detroit Denial?
Either way they are a more worthy company than GM ever was, or perhaps ever will be. (Even if their cars have more parts made outside the US than a Kentucky Camry….)
BTW – there is a slightly rusty Edsel in mint green/white with a “For Sale” sign in the windshield that just got parked in front of a local repair place. Will Ford survive by virtue of having made a past blunder like this which is the stuff of legends? May they never forget…I can only look at it for so long before I must turn my eyes away…not even a mother could love…
Marquis Dee
I think Billy is admitting the unreliability of much of the market and consumer testing that companies do. Remember, ever single car that has been a massive flop was focus group tested to a fare thee well. GM decided on asking for gov’t money because market research showed them that consumers wouldn’t buy cars from a bankrupt automaker. Instead they’ve had their reputation dragged through the mud for six months.
I’m very ambivalent about consumer testing and market research. Of course you need to listen to what consumers want and need but like political polling and elections, the only real test is the market itself. You have to have some confidence in your ability to create a competitive (or better, a superlative) product, and then roll the dice.
There’s a new show on cable called Pitchmen about Billy Mays and Anthony Sullivan and how the products they pitch on tv end up getting selected and marketed. While it’s possible they use focus groups I didn’t see anything like that mentioned. Once they’ve decided to go ahead with a product presented to them by an entrepreneur, they do some preliminary media buys and measure the response. In the case of one hit, they got $4 in sales for every $1 in advertising and decided to go with full scale media buys. In the case of a less successful test market, they decided to try again with a BOGO offer. That’s where the “but wait, there’s more” stuff comes in, fine tuning the price and addons.
Obviously, with a new car costing $1 billion or more to develop, there’s a bigger risk than with selling a warehouse full of Shamwows, but the only test that really counts is if people buy it.
It doesn’t matter if the ad wins a CLEO award or generates some buzz following the Super Bowl. What matters is if the ads sell stuff.
Speaking of ads, am I the only one getting incredibly annoyed by the ATT Yellow Pages ad campaign with people “hunting” for products and services? They must be spending tens of millions of dollars on the campaign – it’s omnipresent and irritating.
Ford’s reliability scores started rising under Bill II also. Way better than the Detroit pretenders.
Bunter
I’m with Bunter. I don’t care who you are, it’s tough to admit that you’re not the man. Might have been easier for him than some others. Still…
Obviously, with a new car costing $1 billion or more to develop, there’s a bigger risk than with selling a warehouse full of Shamwows, but the only test that really counts is if people buy it.
I’ve noticed a spike in the frequency of mention of ShamWow as of late. Now, I don’t watch TV as a rule so maybe I’m missing an ad pitch, but I’m curious as to why.
The Big Mac sells in huge numbers, too. Doesn’t make it good.
It also doesn’t make it bad. It it haute cuisine? No. Does it provide fair value? Since McD’s keeps on selling billions of them I’d say the answer for many, many consumers is yes. The problem with the Cavalier is that not enough customers came back for seconds.
“Ford would have been wise to let “Taurus” rot in the history books as well.”
Ford sold a lot of Taurus/Sable vehicles, through three generations, with many families buying more than one. While Ford may have pissed off Taurus owners by decreasing resale value by dumping thousands of cars on the fleet markets, I don’t think they damaged the Taurus and Taurus brands nearly as much as GM did itself with the J bodies.
Ford dropped the Taurus nameplate not so much because it was a damaged brand but because of the industry’s infatuation with alphanumerics. The fact is that when they switched from Five Hundred to Taurus, they had data showing great name recognition with Taurus, with favorable associations.
Remember, the Taurus outsold the Camry and Accord for a number of years.
RF,
I agree with so many of your editorials, but I don’t quite get the problem with his statement of obvious fact. Then again, I thought some of MB’s stuff wasn’t as bad as you seemed to think (though there were some really bad ones I will agree).
It is clear they did not forecast the market well, and I doubt seriously it was because of lack of effort. More likely it was lack of competence, but hey, he didn’t really say that either. I think he really believes the current situation was unforeseeable, even though industry players actually helped create it.
BTW, I don’t believe Toyota saw it coming any better than anyone else. They just were better at many things that help them weather the storm better. The Prius may be a great idea, but it’s not proof they made a better prediction of the future market.
psharjinian: I’ve noticed a spike in the frequency of mention of ShamWow as of late. Now, I don’t watch TV as a rule so maybe I’m missing an ad pitch, but I’m curious as to why.
The ShamWow infomercials are so goofy that they stick in the mind – particularly the tag line, “It’s from Germany, so it has to be good!” (or something to that effect).
The recent arrest of the ShamWow spokesman for allegedly beating up a prostitute – with mug shots posted all over the web – has only fueled the references.
Ronnie Schreiber: Remember, the Taurus outsold the Camry and Accord for a number of years.
With the aid of fleet sales and massive incentives, which destroyed its resale value.
I know that the current model is actually quite good, and the new model looks great, but the Taurus nameplate is still dogged by the problems with failing transmissions and blown headgaskets that went on for far too long…
I’ve noticed a spike in the frequency of mention of ShamWow as of late. Now, I don’t watch TV as a rule so maybe I’m missing an ad pitch, but I’m curious as to why.
Vince has some legal bills to pay. Perhaps you saw the news. He got into an altercation with a woman pitching something you can’t sell on tv.
The guy is so sketchy he’s amusing. He’s a former Scientologist, D list actor who produced and directed what some consider to be one of the most tasteless movies ever made. After the movie failed he sued the Church of $cientology saying that they tried to suppress it, but much as I despise the Cof$, the movie sucks on its own rights. To pay his bills he started working flea markets and eventually hit on selling the Shamwow towels on the tube.
I don’t begrudge Vince, or the guys on American Chopper, or anyone else who recognizes an economic opportunity and runs with it.
Think about what’s involved in creating and selling something. Let’s say you invent and patent some kind of kitchen gadget, a new corkscrew. You spend thousands, maybe millions, on prototypes, molds, packaging, etc., rent space at trade shows for the wine and housewares industries, and hope for an audience with a buyer at a major retailer or other sales channel like QVC.
So all the props to those who manage to grab the brass ring when it comes around on the carousel.
BTW, I’m waiting for someone to cast Vince Shamwow in a movie as Steve Buscemi’s brother.
The recent arrest of the ShamWow spokesman for allegedly beating up a prostitute – with mug shots posted all over the web – has only fueled the references.
Vince isn’t just a spokesman. It’s his company. He buys the Shamwows from his German vendor and sells them on tv.
To be fair to Vince, the hooker was arrested for assault too. He told the police that he was drunk, paid her $1000 for sex and that after he paid her she started to bite his tongue and hit him, so he hit her back. From his mug shots the story sounds credible since he looks kind of messed up. The episode will only increase his legend.
Ronnie Schreiber: Remember, the Taurus outsold the Camry and Accord for a number of years.
With the aid of fleet sales and massive incentives, which destroyed its resale value.
Late in the run, as Ford was propping up sales to keep it ahead of the Camry. Before that, families bought successive Tauruses (Taurii?). Like I said, Ford has some data on name recognition, favorable and unfavorables regarding the Taurus nameplate, and the current model’s name designation is not without reason.
Like I said, Ford has some data on name recognition, favorable and unfavorables regarding the Taurus nameplate, and the current model’s name designation is not without reason.
Yes and no. I think they may have significantly overestimated the equity in the Taurus nameplate, or underestimated the damage done to an otherwise-decent nameplate through years of neglect or abuse. Not as bad as Cavalier, but it’s not net positive, I’m sure.
There’s a certain amount of myopia in any marketing department, and I’d suspect there’s more than an average amount in one that, quite frankly, has dropped the ball as much as Ford’s has. They probably came to the conclusion—and were likely able to prove—that Taurus was a worthwhile name. I think they’re wrong, and given that people have stayed away from an otherwise decent vehicle support that at least somewhat.
Ronnie Schreiber: Vince isn’t just a spokesman. It’s his company. He buys the Shamwows from his German vendor and sells them on tv.
Well, they are from GERMANY, so they HAVE to be GOOD! Vince says so…
psharjinian: They probably came to the conclusion—and were likely able to prove—that Taurus was a worthwhile name. I think they’re wrong, and given that people have stayed away from an otherwise decent vehicle support that at least somewhat.
As you noted, the reputation isn’t the greatest, but the styling isn’t helping, either. It looks like a giant VW Passat with an over-chromed grille. I’ve seen the new one at various auto shows, and it looks MUCH better.
Still, it is hard to believe that the Impala outsells it…
Forecast??? I’m so sick of this word.
What about PRODUCT LEADERSHIP!?!?
As they don’t innovate, they spend their time looking over their shoulder’s saying “How come we didn’t FORECAST that????”
American Business at it’s reactionary “finest” eh?
Ford will benefit mightily if they are successful in dramatically improving their forecasting, although there is always that element of surprise, both good and bad.
While The Ford Motor Company is cleaning house, please oh please get rid of the committee that takes a very well done pre-production unit and seeks to take $200 out of it. The net result 100 percent of the time is reducing the desirability by $2,000 which leads straight to the 7-item incentive pac five months into production.
Look at reviewers’ net list of beefs and the balance more often tilts to a cheapened design decision rather than a clearly poor design.
European and Asian car manufacturer’s do it also but they far better resist going for that last $200.
Detroit has not learned this lesson.
Ford’s vehicles, like the other Detroit products, have been horribly nickel-and-dimed.
If Mulally went to the Chief Designers of each product and personally approved a net $200 “quality improvement” for each, you’d hear a big WAHOO! that would rattle that town. Each would have a terrible time paring down the list of dozens and dozens of things to improve but it would be a labor of love.