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Lincoln Zephyr, Lincoln MKS, Lincoln MKX
#436 of 4401 Lincoln vs. The World & Mr. Ford
Jul 20, 2006 (6:00 am)
The Q2 Results have tipped the hand at the Blue Oval.
Ford Motor lost $162Mn for Q2 in 2006, with Ford Motor Credit offsetting the $806Mn loss in North America. Average selling price per vehicle was $22,781, representing a $955 per vehicle loss on 834,000 vehicles sold. This is diametrically opposed to their stunning profits in the tiny South American market, where the average selling price per vehicle was $15,110 and Ford made a profit of $1,055 per vehicle representing a $95Mn profit on 90,000 vehicles sold. Europe showed some signs of improvement under Richard Parry Jones, making a $228 per vehicle profit on 459,000 sales with an average selling price of $16,122 per car. PAG, however, lost another $162Mn, a stunning $835 per vehicle loss despite an average selling price of $40,625.
Ford Motor's market share is now down to 16.7% with PAG making up another 1.1% share, leaving Ford Motor at the midst of the summer with 17.8% of the U.S. Market. It's 1927 all over again! Ford-Europe continues to hold at 10.2% where PAG holds twice the market share at 2.2%. Outside the U.S. Ford Motor made a $238Mn profit, including Mazda.
At the current rate, North American Operations will have lost a stunning $3.188Bn for 2006, or roughly $3,382 all toll per vehicle on sales on 3.38Mn---if the trend continues. The fall season, of course, more robust than the spring and summer, should skewer the results. Yet even Ford Motor admits it will not make a profit in North America in 2006. More than one third of that cost represents health-care and jobs-bank reallocations.
While one admits that Ford is being blunt about its projected losses, Ford still sits on a cash reserve of $23.6Bn with $42Bn in Revenues for the quarter, with a company wide selling price of $24,249 per vehicle, and a loss of less than $75 per vehicle sold---the "total" posted after tax corporate loss of $162Mn for the quarter. Ford Financing made $372 for every car sold offsetting deeper losses. For every dollar Ford Motor lost during Q2 selling a vehicle, it made back $5 loaning you the money to buy it.
The best face one can place upon it, is that as a whole Ford Motor is approaching a "break-even" point for Q3/Q4 if sales improve. Yet the fact that Ford loses so much money per vehicle within our own nation puts further impetus for Ford to fix its product lines, starting with Lincoln---which explains how Zephyr ended up in Mexico. Therein we see the battle being fought between Fields, Horbury, and the Ford Motor Finance Committee and Mr. Ford. If NVB is correct, and gas tank regulations killed the Town Car in America...but not its sister ships in Canada, then it makes sense to move production until the new car is ready, to St. Thomas. It would buy Lincoln the needed two more years before its replacement is ready. "Why would they want to kill the Town Car..." a wealthy friend of mine asked me after hearing about it on 'Click & Clack'! But Ford through CAW President Buzz Hargrove, has already put an end to that reality.
Now...a plausible explaination exists why Ford has been tardy is doing something about its top-range Lincoln---but Ford knew before-hand about it, and planning should have begun in 2003 for the 2008 Town Car. The arguments to and fro about Lincoln must have been heated ones. Given $3.50-$4 a gallon for gas in America, and more in Europe*, it is no wonder that Ford UK CEO Richard Parry-Jones increased Ford Motor's investments in fuel economy engineering to $1.8Bn in Europe, while scapping some existing programs. You can bet Mr. Fields has done the same, creating a greater problem for future Lincolns.
Hopefully Ford Motor will NOT form an 'alliance' with Toyota should GM mistakenly proceed with Nissan-Renault. More likely is that Mr. Ford will court Mr. Ghosn again, should Mr. Kerkorian's gambit to improve his Estate Value fail. At the end of the day, Lincoln should become the talismen for Ford Motor to indicate where it wants to go as a company, both in terms of engineering, and style, but also answering the looming economic and fuel crisis at hand. PAG is not making money, and healthy demand still exist for Town Car. As such, Mr. Fields, and certainly Mr. Ford must indicate where they will take Lincoln before Wixom closes, some 330 days from now. Lincoln must become the lone leader within Ford, for as Lincoln goes, so goes the nation.
*Europeans pay about two to three times more than we do for a comparable 'gallon' of gas, VAT and 20% taxation included. It regularly cost me the equivalent of $105 to fill my tank when I drove in Europe, and I got "used" to it after a while---with gas being priced by litres! The average European spent about $40 to fill their tank then, and now about $65-70---the relative price roughly the same we now pay. Our 'tanks' are often two to three times larger. As a European friend then pointed out to me: "For me, our gas is cheaper, we drive farther than you do on one tank of gas...you fill up twice or more to my one tank!"---responding to my tart remark: "Yes, but we still have cheap gas, at a $1.25" I didn't add, that I was not shoe-horned into a smaller car.
(Source: Ford Motor Company)
#437 of 4401 Re: Lincoln vs. The World & Mr. Ford [douglasr]
Jul 20, 2006 (6:30 am)
Ford Motor lost $162Mn for Q2 in 2006, with Ford Motor Credit offsetting the $806Mn loss in North America. Average selling price per vehicle was $22,781, representing a $955 per vehicle loss on 834,000 vehicles sold.... At the current rate, North American Operations will have lost a stunning $3.188Bn for 2006, or roughly $3,382 all toll per vehicle on sales on 3.38Mn---if the trend continues.
How much of this is attributable to one-time (hopefully) restructuring costs, buyouts, etc? I'd like to see how FoMoCo is doing factoring out extraordinary accounting charges. To me the important thing is will they be able to turn a profit based on operating costs.
#440 of 4401 Re: Lincoln vs. The World & Mr. Ford [scootertrash]
Jul 20, 2006 (12:07 pm)
Man, that's a heavy article! Should I feel guilty if I try to negotiate my next purchase?
Of course, Chevy and Ford's dealer networks are 3 and 4 times as large as those of Toyota and Honda, and ToyHon do just fine. Maybe it is time to trim a little of the fat.
What I really don't get is why ANYONE would want a Lincoln-Mercury franchise today. No product, no brand awareness, no advertising, and after all that you get squeezed by the manufacturer for profits, and possibly forced to accept into your inventory cars you know you can't sell or don't want!
#441 of 4401 Lincoln vs. The World & Mr. Panke
Jul 24, 2006 (1:19 pm)
William C. Ford Jr. is faced with shrinking his company to fit the collapsed market share he now holds, less than 18%...had he hung on to the traditional market share held by Ford Motor before he arrived, Ford Motor Company would now be the #1 U.S. Manufacturer again, having surpassed GM's 24.1% share---thereby making good use of the Nasser acquisitions.
Now the time is ripe for bold action. Helmut Panke, sadly, must take mandatory retirement the very next day after his 60th birthday on September 1. Bill Ford needs his experience...having guided a masterful expansion of BMW AG during his tennure, while maintaining much of their profit per vehicle. Mr. Ford should hire him immediately---lest he go to GM or even DaimlerChrysler. PAG Group has fallen behind in its attempts to become profitable this year, and may well post a loss---having thereby put a cloud over Mr. Fields former division. Mr. Panke's experience in the industry should not be lost---he has a good five years ahead of him before he really needs to retire.
The plus side is that Mr. Ford's move would be seen both on the 'street' as a shrewd and necessary move considering that domestic brands no longer hold the majority share of the market (June results with 53.7% of the market going to 'foreign' labels), and bolster Ford's stock position. Mr. Panke could well advise Ford Motor to 'fix' their median marques and middle position, and step-up their efforts to improve their car lines. No one doubts Ford's ability to make trucks and SUV's, yet having the advice of a BMW man might well make consumers think about considering future Ford's, and get them into the showrooms. Certainly, after having successfully revitalised Rolls-Royce and vanquishing Maybach, Mr. Panke knows a thing or two about luxury cars: especially since BMW outsells Mercedes in America and Germany.
The down-side is that bringing in 'an outsider' would make his job a difficult one without the full faith and confidence of the Ford Family. Mr. Fields could keep his job, but he would have to report to Mr. Panke and defer to him. The last BMW executive to serve at Ford, Wolfgang Reitzle rubbed the Ford Family the wrong way, and he was shunted aside, and later resigned. Mr. Panke would have to overcome the animus thus created by the departure of Reitzle. Many would critisize Ford for bringing in a German executive to run the company, or portions of it: many would say that Ford had "lost the battle" and was merely surrendering to the inevitability of foreign market domination. (But then we made able use of Mr. Werner von Braun to get to the Moon, so why not Mr. Panke to vanquish Lexus and Cadillac?) Many would also praise him for recognising the very same reality.
At the end of the day the plusses would outwiegh the negative reaction. "Dr. Z's" commercials making it that much easier for Ford to consider such a move: Ford must remain true to its products, since it is the sum total of the team creating them that matters. After-all, it was Chris Bangle, the American designer, that has brought BMW away from, in Mr. Panke's words, "making three types of cars, same saugage, different length",---and successfully vanquishing its competition.
Mr. Panke could do the same for Ford Motor, and at the end of the day, perhaps save Lincoln from a seemingly inevitable downscaling and demise in the market-place. Who would doubt that if Lincoln were guided by a BMW man, that many people would consider the brand...? Nor does not automatically mean that Lincoln would surrender their traditional base---just add a dash of zest to the line. Mr. Panke in the least, would want to take Lincoln and Jaguar and continue to 'go after' his longtime rival Mercedes-Benz---not to mention those other brands.
(Sources: BMW AG, Automtove News, WSJ)
#442 of 4401 Re: Lincoln in 1961 [scootertrash]
Jul 25, 2006 (5:23 am)
That is exactly the kind of move Lincoln needs to make.
Using styling cues from the 61-67 would not be out of line: IMO the longer wheelbase 65-67 models looke a little nicer.
And don't forget a 4-door convertible! These were the personal cars of of JFK, LBJ and many others among the rich and famous.
LBJ even drove his Lincoln 4 door convertible around his Texas ranch.
#443 of 4401 Lincoln & The '61
Jul 25, 2006 (5:57 am)
Yes, a remake of the '61 would hit a nerve with the public. Lincoln has tried that twice in the last several years: both with the Four-door show car done under the aegis of Wolfgang Reitzle, and also the Mark X convertible based from the Thunderbird that was shown two years ago. And then there is the Mark IX Show Car...all three of which boasted '61 styling cues. None were built, or approved for production. The most Lincoln received from those show cars was a revamped dash-board in cars and trucks.
Therein lies the problem: Mr. Horbury is looking for an entirely new design voice or look for Lincoln---he wants to cut his own cloth in steel for Lincoln---ergo the Mark S. Mr. Fields clearly does not understand Lincoln, but he is more concerned about productivity and capacity utilisation than anything else. It is all too obvious that any Lincoln evocative of the 1960's designs would sell well...just look at 300 for an example.
Ford Motor is spending $5.3Mn per day on operations and new products. $1.6Bn in Q2 for new cars, $7Bn this year alone. Yet there is no doubt that Ford's ship is running in rough shoals, even Bill Ford said last week that he would "consider a negotiation or alliance" with another manufacturer, much like what GM is now doing with Nissan-Renault. Lincoln is left out in the cold. A lengthened Ford 500 is about the most we can now expect from Mr. Horbury as Ford Motor revamps its 'Way Forward' plan within the next 60 days. Ford Motor is effectively shrinking itself to fit its now reduced market share: precisely what James J. Nance did at Packard in 1954.
Unless there remains a surprise behind the curtain, when that last Town Car rolls out of Wixom, it will be a sad day for Lincoln, and for America. A revived '1961' style Lincoln should have been introduced five years ago: precisely the plan MR. Reitzle had proposed, and it was cheap at the price: $1.6Bn...as Lincoln goes so goes the nation.
(Sources: Ford Motor Company, WSJ, FT)
#444 of 4401 Re: Lincoln in 1961 [scott1256]
Jul 25, 2006 (9:13 am)
as Lincoln goes so goes the nation
Maybe 'as goes Lincoln, so goes Ford'
It won't affect the nation. Luxury car sales of other brands have grown fast over the last decade or so.
When a product line disappears its space is quickly filled by competitors.
Packard faded away but there were still lots of luxury cars to choose from. It will be the same if Lincoln is left out to die.
Jul 25, 2006 (9:32 am)