Truckin Blog - Ford's Way Forward

Edward A. Sanchez, Senior Online Editor
Thursday, January 26, 2006

Ford's received a lot of publicity lately for its "Way Forward" plan announced by Bill Ford Jr. Though wrapped in optimistic language and lofty concepts, the more immediate reality will mean the loss of jobs for some 20,000 workers, and the closing of seven assembly plants. It's easy to take a casual glance at the matter and chalk another one up to greedy corporate big wigs just trying to stuff their pockets further.

But a revealing article in the January 30 issue of Time Magazine written by Dorinda Elliott showed another side of Bill Ford. It quoted him as saying "Honestly, I don't worry about myself. I mean, I can screw up my life, and it doesn't really matter. But what I worry about is the impact all of this has on others. We're going to do what we have to do, but it's just very, very sad."

Startlingly frank language for a CEO. This level of honesty is refreshing indeed from a domestic auto industry that more often than not has arrogantly disregarded the threat of foreign competition, and downplayed the negative effects of downsizing.

It's no secret who the most formidable global competitor in the automotive world is today. Need we even say the "T" word? But Bill Ford isn't afraid of the sumo-sized giant from Japan. "My goal is to fight Toyota and everybody else and come out on top." Them's fightin' words, no doubt about it. Can they pull it off? No question they have a long, tough road ahead of them, but at least there are some signs they might be on the right track.

The Mustang has been an unqualified hit, so much so that Dodge and Chevy showed retro-inspired concepts of their own heritage musclecars. A three-year headstart will be tough to overcome, and it's likely future Camaro and Challenger sales combined may not meet the Mustang's strong numbers. The Fusion sedan, though relying heavily on Mazda components, competes head-to-head with the Camry and Accord for thousands less, and is less than even a comparably-equipped Hyundai Sonata. Who said Americans couldn't compete with Koreans on price? Thanks to strong demand and good quality, the ALG has already announced that the residual value on the Fusion will be a significant 17 percent higher than the Taurus, the vehicle it ostensibly replaces. In all fairness, however, the Fusion is assembled south-of-the-border in Hermosillo, Mexico. Hey, you've got to take a global competitive advantage whenever you can.

But the key to Ford's success will be backing up the corporate buzzwords and rhetoric with some real actions, however painful and disruptive they may be, but most importantly, re-gaining market share. Two major areas in North America where they need major help, and now, are small cars and small trucks. While Europe has a slick, modern brand-new Focus, we're still stuck with a warmed-over version of the first-generation model introduced back in 2000. Bring us your best, or don't bother. Likewise with the Ranger. Other than incremental, evolutionary updates, the same basic design has been around for more than a decade. In the interim, the F-150 has been re-engineered from the ground up. . .twice. Ford and Mazda have super-slick compact trucks they sell in the Asia Pacific region. With a few tweaks, they'd be competitive in North America. Utilizing their plant in Thailand, they could be produced inexpensively.

Mike Alexander, editor of Mini Truckin' magazine, said Mazda, and by extension Ford, could tap into what's become essentially an abandoned market segment: The small truck. "The traditional mini truck is essentially dead," he said. "The Colorado, the Tacoma, the Frontier, have all become midsize. Part of the popularity of the late-'80s to early-'90s B-series trucks is that they were affordable. The newer midsize trucks, even in base form, are $15,000 or more. Some of the beginner mini-truck enthusiasts have gotten discouraged at the price of new trucks. I think they could definitely make an impact in the market by offering an affordable small truck. And with gas the price it is, they could have a strong selling point with a smaller, more economical pickup." Even beyond the scope of custom mini-trucks, Alexander said he thinks there would be demand for small pickups with business fleets. "The guy that just does local deliveries, or delivers parts, he doesn't need even a midsize truck. He just needs a simple, affordable pickup that gets good mileage, and is cheap to buy and maintain. It's not a glamorous segment, but sales are sales."

So Ford is coming out swinging and swaggering. Will their walk match their talk? We shall see, but it's clear, to paraphrase TV cooking guru Emeril Lagasse, they want to "kick it up another notch."

What do you think of Ford's new plan? What do you think they could do to improve their market share or get you to buy one of their products? E-mail me at edward.sanchez@primedia.com. Please give your first name, last initial and hometown. Example: "Joe W., Indianapolis, Indiana"