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Automotive News & Views Where Is Ford taking Lincoln?
3085 messages, Last post on Aug 17, 2009 at 7:46 AM
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$12.746Bn...lost. $33.4Bn in the bank, $24 Bn borrowed. Revenues down 14% to $69.4Bn. U.S market share down to 16% overall, on 3.021 Mn sales. Roughly $4,017 per vehicle lost. Average selling price against revenues: $22,417. Losses before special items: $2.812Bn The numbers present a grim picture at Ford Motor. When Bill Ford looks out his office window he will see the smoke-stacks of The Rouge. The iron ore smelters were lighted by his grandfather. Two men toured those factories almost twenty years apart, and now the companies they formed and built afterwards---based on Ford methodology---threaten to overtake or subsume Ford Motor. Ferdinand Porsche toured The Rouge, meeting the Henry Ford in July 1937, later recruiting Ford men to run the new VW-Werke in Germany. Eiji Toyoda would follow in his footsteps as soon as Japanese citizens were allowed to leave Japan after 1945, touring The Rouge in 1954. Today, those two firms now threaten the very position of Ford Motor as the second largest auto firm in America and the world. VWAG is a half million units away from surpassing Ford if the trends at Ford continue---and will beat them in 2007/08. Toyota has already beaten Ford once in 2006 for that title in America----this from a company that imported TWO cars to L.A. in 1957! When Henry Ford II drove a VW March 3, 1948 he told Ford-Werk Chief Engineer Richard Busseein: "Well, at least it's a car..." Ford's interest in VW never came to fruition.... Eiji Toyoda toured The Rouge and saw amazing things, astounding production feats, matched equally by a similar degree of waste he thought he could improve upon---simply by removing the "warehouse" aspect of the factory, and having the parts arrive just-in-time as they did at Ford's Fordson tractor factory. Thus the two men set their path from "Fords" and now it is Ford that is fighting for its future. Thus the "ARMS RACE" has begun. Mr. Katsuaki Watanabe at Toyota has said: "I personally would like to become number one in terms of the qualitative level of our company..." Mr. Mulally has been engaged at Ford, and must now engage in an "ARMS Race" against the competition. Just as Mr. Wiedeking at Porsche has declared: "This is a business war..." in reference to CO-2 emissions standards the EU Commission is seeking to impose. Mr. Mulally must now take the same position with respect to Ford Motor and Porsche-VWAG (the two companies have effectively, but not legally merged) and Toyota. The key to salvation: the kind of reaction that makes a man trade in his Zephyr for a MkZ. Levels of quality here-to-fore not seen in Ford Motor or Lincoln products. Just as VWAG uprated their cars in the 1990's, as did Audi under Martin Winterkorn, so must Lincoln move now. Not next year, but this instant. When a customer opens the door on a Lincoln (presuming you can get the car to him or her to do that) they must go; "wow, I didn't know they were that nice..." Start with interiors...and move on from point to point. Eventually the cars will have a seemless level of quality that no one can compete against. And it will take the herculean efforts of the suppliers like Collins & Aikmen to do so. Lincoln can regain the initiative because no expects them to do so. Take all the knowledge gleaned from the Jaguar project and put it into Lincoln without breaking into market segment mistakes that has turned Jaguar into a deep cat box. Take the smaller Jaguars and turn them into Mercury's---along with a Mustang varient bringing back Cougar. Ford has 37,000 salaried workers at the Glass House and they want to reduce that to 28,000 in '07/'08 That's 82 engineers and design staff working per day on project X, Y or Z to solve any one problem. Even if half that number are real car people and numbers crunchers or sales staff, alot can be done with motivation. Innovation, superb design, etc. all comes from the soul--often from one person---and the underdogs trying to save Lincoln might well be able to save all of Ford Motor if the can push their way through the top floors of the Glass House. One would not know it, but 'The Duce' said it best when he said it: "Never complain, Never explain..." and this time Team Lincoln must step forth, stop complaining, and stop explaining and just do it. Don't look for proposal guidance...just create ideas whole cloth from the wares that Ford can build, plus a few new ideas. That's how Bob Gregorie designed the Continental: In half an hour... Tell me that that can't be done again...? IF you beleive that, then our nation truly is finished in terms of manufacturing excellence and innovation. Talk of mergers or cooperation with Toyota is a carbunkle on the side of the Blue Oval. Hybrid technology bought-in will not save the company. Because Mr. Ford has made an empty promise about such things, and the public (now) knows better. So it falls to Mr. Mulally to ARM the public with designs that can inspire them to reconsider Ford and Lincoln once again. 27.4% of the world GDP belongs to America, and tell me there is not enough room in that pie for Ford to regain its share. "At least its a car" is no longer game in the auto industry. You have to be twice as good as the competition because they are aiming at you every day. Everytime someone opens a car door.... Mr. Mulally will you win the game with Lincoln? If Bill Ford wants to see those smoke stacks billowing with Ford ore in the future, you must do it. Bring new Lincolns to the people, don't wait for them to come to you.... DouglasR (Sources: FT; WSJ; 'Small Wonder' Walter Nelson Little Brown & Co 1967; 'Battle for the Beetle' karl Ludvigsen, Bentley Publishers, 2005; 'Toyota Way' Liker, NY 2006; Ford Motor Company Annual Reports) |
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Ford lost almost $13 Billion in 2006, I began to question the possibility of buying a used Aviator or a new Explorer, as I wonder if Ford will survive long enought to service the vehicle under an extended warranty... Further, will they actually be around to service my current 2004 Crown Vic??? If they lost $13 billion after borrowing $24 billion, and most of their profit is from slow selling SUVs, I can almsot assure you that they will lose another $10-15 billion in 2007... That brings the cash pretty low with which they pay ongoing bills like payroll and suppliers...what happens if the suppliers no longer extend credit if Ford starts paying bills 30-60-90 days late??? If they file Chapter 11, they still msut pay the notes on the collateralized loans where they put up their plants and property as collateral... They may be able to restructure their unsecured loans, like their suppliers, but if they do not lokk like a viable company, will suppliers continue to extend credit???...(I am assuming that the $24 billion has already been financed over the maximum amount of time for the smallest possible payment to conserve cash flow, but I may be wrong on that)...
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Replying to: marsha7 (Feb 01, 2007 9:03 am) |
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is what percentage of the financial burden hindering recovery? 
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Yes, the losses "aren't as bad" if you exclude the special items, leaving another $2.860Bn lost---still a $987 loss per vehicle sold. But one can't ignore the shrinking of the company before any attempt is made towards profitability. The January results are in: GM: 244,688---a 16.9% drop Toyota: 175,850---a 9.5% gain Ford Motor: 165,688---a 20% drop over last year. Even VWAG gained 3.2% to 23,251 cars! The clock is ticking at Ford Motor. Why Lincoln needs to work round the clock on a "war-time" basis to save itself and the company. No one can argue with any veracity that Ford Motor can survive without its upscale brands, specifically Lincoln. (The counter agrument: Bill Ford let it languish, so perhaps a new owner might do better...) It would, however, be turning the clock back to 1922. GM surpassed Ford because it stratefied its product range to entice customers as their incomes increased. Ford must do the same thing, and selling off divisions would merely seek to drive customers further away. Sadly they are selling off the one division that (finally) did make money: Astons. The Billion they will get from Doughty Hanson (UK), Simon Halabi (Syria!), James Parker (Australia), or the UBS consortium will not solve their problems. It will buy another couple of months for them at best. And it will tarnish Ford's image for having come so far to develop the car and then cut and run. Both Jaguar and Astons should have been sold together....if they were going to dispose of assets. There is, however, hope...it is soon in the offing. DouglasR (Sources: Reuters, Automotive News)
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Replying to: douglasr (Feb 01, 2007 2:45 pm) The first model that will be more modern and be Lincoln alone will be the MKS, and it won't arrive for more than another year (and already had to be re-worked because the original concept was so boring). The MKR shows that Lincoln COULD produce exciting vehicles..if it survives. Any MKR-related Lincoln is more than two years away at the very least. What they plan to do about the earlier proposed Fairlane clone (due in 2009) is anyone's guess, but I bet Mullaly put his foot down on issuing yet another Ford clone with a Lincoln grill and interior. Yes, there is hope, but not great gobs of it yet.
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No, I never had a chance to read the article, so maybe I should feel sheepish...but still, that IS a lot of money, sales do NOT seem to be increasing, especially when the vehicles bringing the most profit, SUVs, are down due to gas mileage...we may need $2/gal gas for quite some time for folks to "forget" about $3/gal... And, with a number of Ford's designs anemic (IMO), where are the future sales going to come from??? |
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Replying to: gregg_vw (Feb 01, 2007 4:07 pm) I dunno. My Navigator is a nicely-tarted up Expedition, yeah. But I prefer the tarted-down Jaguar which is my LS. But that's in the past now. No more of that will be coming. I should know this, but what do the CTS and STS share platforms with? Anyone know?
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to come up with a new model. After Pearl Harbor the American auto industry produced planes,tanks, trucks, & Jeeps within just several months. This is 65 years later and more time is needed? With computer sequential production and automation techniques, what are the obstacles?
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Replying to: heyjewel (Feb 01, 2007 6:39 pm) I don't criticize Lincoln for doing the Navigator the way it did at first...practically all the companies offering big SUVs built them off a corresponding light pickup, and the later luxo versions (Lincoln, Lexus, etc.) were built off the Expedition, Tahoe, Sequioa, Armada, etc. But why they didn't update the body panels, at the very least when the F150 was revamped, is a mystery. To my knowledge, the CTS is its own car. However, I don't think that matters so much as giving the car its own individuality and solid reason for being. If Ford can build the Mustang and the MKR off essentially the same platform, more power to them. No one will confuse one with the other.
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