The Sun Never Sets on the Ford Empire

By Jason Lu

08.15.2008

Here we go again, another announcement from FoMoCo that will bring our hopes up of receiving European Fords. For those of you clamoring for stylish blue ovals, you probably will have a feeling that there is a bright spot that’s just going to light up your day. Well here’s the good news. Ford has announced that it now “expects quality, fuel efficiency, smart technologies and shared global nature [in] its upcoming new Focus small car in North America.” We’ve all heard similar lines from automakers, but Ford’s statement follows a recent chain of events and announcements, including the news of European models coming to the United States. Today’s statement though, is the first that gives an insight on what will be featured in the upcoming Ford Focus. Ford seems determined to change, and it is certainly undergoing a transformation that outshines its competitors. Eager to bring new grass-is-greener models to the US of A, FoMoCo is truly focused.

Ford is aiming for a next-generation Focus that will earn “double-digit percentage profit improvement” over the current North American Focus. The current cash-drainer is two different cars on two different sides of the pond. Ford hopes that a globalized C-platform will help the next-gen Focus share 90 percent of its parts between the two markets, as opposed to the current 20 percent. A new customer connectivity team will also be in charge of making sure that Ford maintains leadership in providing buyers with class-leading technology. A big seller for the current North American Focus is the SYNC technology that can play music, receive phone calls, and even read text messages so Ford is hoping that it can attract more buyers with tech-filled cars. Buyers can expect to see SYNC, SIRIUS Travel Link and Ford Work Solutions, and HD radio in future products.

Continuing on with its aim for more profits, Ford is also cutting the number of packages and options available to buyers. Again, Toyota has been doing this with their vehicles, sometimes offering only four available packages as options. For example, the only way to obtain a navigation system on a Toyota Sienna XLE is to order it in a package that will include a rear-seat DVD system and leather-trimmed seats. This strategy will help cut expenditures by simplifying orders and lowering floor plan costs. The Focus will carry “approximately 150 combinations by the 2010 model year,” said Mark Fields, president of Ford’s American operations, “More than a 95 percent reduction” from the 2008 model.

After learning how fast markets can change, Ford also mentioned a plant retooling process that will make Ford factories more flexible. By doing this, Ford will join foreign automakers such as Toyota and Honda who already have factories that can be easily and quickly reconfigured to meet consumer demands. Obviously, if flexibility had been in place before, we would probably have already gotten European models on our shores. Ford though, as well as every other automaker, was caught off-guard by the sudden consumer shift. Some companies are just more prepared than others.

Being unprepared does not mean that Ford hasn’t been undergoing fast-paced structural and executive reshufflings over the past few years. Big news and announcements came one after another as Ford takes on a turnaround that is unprecedented by other automakers. All of them took a stance on goals, quality and new European-designed products.

In early April, spy shots of the 2010 Ford Taurus were leaked onto the internet. It was unclear whether or not it would be the Taurus, but a reaction from Ford who threatened lawsuits against some websites confirmed that it was indeed a Ford product that is due to replace the current Homer Simpson Taurus. The grainy spy shot, although lacking in clarity, sufficiently depicts a Kinetic-influenced vehicle that made Alan Mullaly drop a tear of happiness. The Taurus features lines that are found on the Mondeo and also looks aggressive with a large lower grille. The styling is sharp and although it is a bit toned down than the Mondeo, already looks better than any other car of its class. Ford is hoping that this newborn will be a winner and with the progress and extent of its turnaround, there is no reason to believe that the 2010 Taurus will not be class-leading. Expect the new Taurus to make its debut at the Detroit Auto Show.

In mid-April, Ford announced that the next Focus will be on a global C1 platform, meaning that the Ford Focus could finally become a true, global car. Americans jumped in joy with this news, but celebrated a bit too early, as the same platform does not necessarily mean the same car (although we hoped). At the time of that announcement, Ford also boosted the North American Focus production by 30% due to high demand. Apparently, ugly ducklings don’t always mean ugly sales, but the two things that consumers liked were fuel economy and the SYNC system.

Aiming to alter the consumer’s perspective that American cars are inferior products, Ford launched an ad campaign in mid-May which emphasized that Ford vehicles are competitive and just as good as their Japanese rivals. A few days later, Ford ties Toyota in Strategic Vision’s Total Quality Awards. This is not entirely news though, because J.D. Powers has given Ford vehicles some of the best quality ratings in the market for the past few years.

Also in mid-May, the North American Ford Focus was updated for the 2009 model year as it continued to post strong sales. A few days later, as gas prices continued to skyrocket, Ford announced that it will make fewer vehicles for the rest of 2008, with more cars and less trucks. To cut costs, 12% of white-collar workers were also…well…relieved of duty.

Less than two weeks later, Jaguar as well as Land Rover called Tata motors their new mom. That same day, Ford posted a net income of $100 million in the first quarter of 2008, possibly due to unusually strong Focus sales, which generally posts very small profit margins. Another announcement was made that Ford will start keeping its products on a three-year cycle in order to maintain “freshness” in their products. Again, sales of SUVs and trucks tanked against fuel prices so Expedition and Navigator productions were stopped for nine weeks. Then, the big day comes and fulfills many dreams: Ford confirms that the European Focus will be produced in the U.S. in 2010 at two plants while the new F-150 launch is delayed. Yes, breathe a sigh of relief.

In August, following announcements of new upcoming models, Ford says it will be striving for best-in-class fuel economy and quality with its new products. “This is without question the best Ford lineup we’ve ever produced – and it comes at a critically important time for the company,” said Mark Fields, president of Ford’s American operations. “Our product-led transformation is well under way, and there is much more to come.” On that note, six B and C-car platform European models are expected to trek the Atlantic and land on our shores. Keep in mind, the newest and most recently updated B and C-car platform vehicles in the European lineup are the Fiesta, Focus, Fusion, Kuga, Ka, and the C-MAX. The Mondeo and North American Fusion are expected to be consolidated into one vehicle as well. “We now have a truly global product development organization,” says Fields. “That really forces, in a positive way, the product development, manufacturing, marketing and sales, and financial community to work together in a global way.”

With new products on the horizon and new goals set for competitiveness, it looks like Ford is finally waking up to a market that it has long struggled in. Ford is known for quality and reliability in Europe, and some of its products have been knocking on the doors of BMW. Americans though, just as with their perspective on diesel fuel, will take some time to understand that Ford is a major player in this arena. However, with tastes between Americans and Europeans beginning to mirror one another, it has the potential to be a huge advantage for Ford. The Blue Oval has had some rough days in the past and it certainly is far from flawless even today. But if progress continues at the pace it has been going for the next few years, we may soon have a prominent American leader in the automotive industry if Ford is focused on its goals.

COPYRIGHT Autosavant.net – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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4 Comments

  1. Great article, very, very informative! As a fan of Ford, I really like the way Ford is going under Mulally! I used to think that GM would be the American car company that would be the most likely to weather the current storms in the industry, but I think Ford is going to be the one.

  2. Ford gets it under Mulally, GM is still flailing around as it tries to imagine a world without 3-ton pickup trucks and SUVs. They’re having a tough time with that whole concept.

  3. Focus was a ‘world car’ in 2000, when it shared the C170 platform. Some talk as if the current car is a Pinto, and was never, ever EURO.

    Just old management was afraid of quality qlithes in changing to C1 for 2005, so then they kept C170. In long run, wasn’t that bad, since I think the C1 Focus had the ‘bland look’ of the Five Hundred, and the extreme hatch was a bit much for US tastes in 2005.

  4. If there’s a God, we will have the Focus RS.

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