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Do You Think Ford Can Survive?

Do You Think Ford Can Survive?

By TCC Team's avatar TCC TeamTCC Team June 22nd, 2008

2008 Ford F-Series

2008 Ford F-Series

Enlarge Photo
Ford's decision to delay by two months the launch of the new 2009 F-Series pickup is news in and of itself. But in the broader scheme of things, it's just one step in a dramatic remake that could, arguably, be the automaker's last big battle.

With the automaker's plants mortgaged up to the proverbial hilt and a growing number of investors eager to walk away, Ford has precious little time to catch up with what one senior executive has described as a "watershed" shift in the American automotive market. It also has a diminishing stockpile of resources to achieve a dramatic transformation from a company largely dependent upon light trucks, such as the F-Series and Explorer, to one where smaller, fuel-efficient passenger cars and crossovers dominate its lineup.

There's little doubt that the Ford of the future will be smaller than it has since the company's patriarch, Henry Ford I, devised that game-changing technology, the moving assembly line. Just how much smaller is uncertain, but the company's market share, which peaked around 25 percent in the ‘90s, will be hard-pressed to hold at 12 to 14 percent, even if some of the new products on the drawing board click with consumers. It seems difficult, at least for now, to imagine any of the new offerings hitting the sort of home runs Ford once swatted out of the park with the likes of the Explorer and F-150.

Yet the Fiesta and several other small products have been game-changers in Europe, where Ford is in the midst of a nascent turnaround. And history shows that the company can pull off some pleasant surprises when need be, such as the legendary first-generation Ford Taurus of 1986.

Do you think Ford has the staying power to pull off the long-awaited turnaround? Will it be able to regain its No. 2 status, or slip into the second tier of automotive manufacturers, such as its Asian affiliate Mazda?

Readers, sound out! 2008 Ford F-SeriesEnlarge PhotoFord's decision to delay by two months the launch of the new 2009 F-Series pickup is news in and of itself. But in the broader scheme of things, it's just one step in a dramatic remake that could, arguably, be the automaker's last big battle. With the automaker's plants mortgaged up to the proverbial hilt and a growing number of investors eager to walk away, Ford has precious little time to catch up with what one senior executive has described as a "watershed" shift in the American automotive market. It also has a diminishing stockpile of resources to achieve a dramatic transformation from a company largely dependent upon light trucks, such as the F-Series and Explorer, to one where smaller, fuel-efficient passenger cars and crossovers dominate its lineup. There's little doubt that the Ford of the future will be smaller than it has since the company's patriarch, Henry Ford I, devised that game-changing technology, the moving assembly line. Just how much smaller is uncertain, but the company's market share, which peaked around 25 percent in the ‘90s, will be hard-pressed to hold at 12 to 14 percent, even if some of the new products on the drawing board click with consumers. It seems difficult, at least for now, to imagine any of the new offerings hitting the sort of home runs Ford once swatted out of the park with the likes of the Explorer and F-150. Yet the Fiesta and several other small products have been game-changers in Europe, where Ford is in the midst of a nascent turnaround. And history shows that the company can pull off some pleasant surprises when need be, such as the legendary first-generation Ford Taurus of 1986. Do you think Ford has the staying power to pull off the long-awaited turnaround? Will it be able to regain its No. 2 status, or slip into the second tier of automotive manufacturers, such as its Asian affiliate Mazda? Readers, sound out!

Tags: Industry

Posted in: 2008, Ford, Toyota, Pickups, Explorer, F-150, Taurus, Fiesta



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Responses (12 total)

  1. 1
  2. 2

  1. By Ed #1, Posted: 6/23/2008

    Ford and Chrysler can, for whatever little they are worth, be bought by GM and become GM divisions.
    But even then, they need to be stripped of at least half of their unexciting, fuel inefficient, and/or poorly built products.

  2. By Tom L #2, Posted: 6/23/2008

    My prediction is that Ford will eventually stabilize with market share in the 6-10% range in North America. The company will specialize in a few core products such as pickups, Mustangs and small cars brought over from Europe. Ford can survive as an independent company however it will be sustained by its sales in Europe and emerging markets.

  3. By mlhm5 #3, Posted: 6/23/2008

    This article basically says that the cliff Ford fell off with the loss in SUV and pickup sales has completely wrecked Ford's plans of returning to profitability with the cash they currently have.
    http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20080621/AUTO01/806210327/1148
    Ford is reall not set up to make money when the total number of cars sold in the USA is below 15MM a year period. You can only reduce plant costs, design costs, and marketing costs so much.
    This problem is further compounded when the percentage of passenger cars sold eclipses pickups and SUVsm a segment totally owned by the Japanese manufacturers. Ford totally abandoned this market to the Japanese a number of years ago and only have one high mileage ICE product, the Focus.
    Add to that, Mulally's ambition to retool the USA, lack of product in a $5 a gallon USA, uncompetitive, limited production hybrids, model year 2011 before Ford sees the low labor cost Fiesta, and you get a clearer picture of what Ford's cash position will look like in 2012.
    Ifyou think the market for high mileage cars is competitive today, just imagine the competition for the consumer's dollar in 2012.

  4. By D_ #4, Posted: 6/23/2008

    Focus by analysts on year to year monthly sales totals has masked the fact that (unlike GM & Chry) when you compare Fords performance vs. the market they are losing very little market share in the last 6-8 months. The others are bleeding bad.
    Sorry Ed, GM will not be buying anyone.
    Fords reliability scores in CRs survey have also soared recently (the other two have stagnated at mediocre).
    If GM or Chry tanks (or goes C11) look for a strong bounce for these guys.

  5. By Bill Burke #5, Posted: 6/23/2008

    I think that the loss of Ford would be a crime and the same goes for G.M. and Chrysler. Foreign carmakers have an economic advantage built into their system and their corporate structures are different. This is not a level playing field as many believe and the auto-press ignores. The time has come for three things. First a tarriff on all imported cars,second a reality check by the U.A.W. who are hell-bent on preserving their cushy union jobs while destroying the workers and the industry they are suppose to represent and thirdly the "anti-American" mindset which infects the press, also infects the auto-press. All things foreign are good, all thing American are evil. America needs it's people to stand up and support America. The Amercan auto industry is more than a business, it's a way of life!

  6. By Mark #6, Posted: 6/23/2008

    Ford has over 40 billion in liquidity.
    Ford needs to upgrade its factories to build multiple models on the same line tweeked as Market demands.
    Ford needs to start to focus on MPGs while keeping current focus on safety and technology offerings.
    Ford needs to focus like a laser on offering what consumers want, even if it means producing two similarly priced models that appeal two diffent kinds of buyers.

  7. By  The Car Bulletin #7, Posted: 6/24/2008

    Ford got rich on big pickups, and i think the market turned against them because of the high price of the gas. Ford for sure will rebuilt some engines that would lessen the consumption of the gas when using their car. And for sure they can survive for that. The Car Bulletin will surely support the Ford.

  8. By Big E #8, Posted: 6/24/2008

    What I see as the biggest problem is something that seems to effect the entire industry: the time it takes to bring out new products. I see spy shots of the new Fiesta and yet it won't be ready until 2010? Come on, people, how about a sense of urgency? It's a metal, rubber, and plastic machine that runs on internal combustion. It's not a deep space probe. I thought modern manufacturers used computers. Two years from when they get a completed rolling prototype until it hits the streets? They act like governmet contracters. Ford engineers should be working around the clock to have an entirely revamped lineup ready to go in six months. Thank God my Dad and his friends weren't on the Ford timetable back in 1942.

  9. By Gordon #9, Posted: 6/24/2008

    Ford won't go out of business. They will go into survival mode and simple stop certain operations as they need to survive.
    And, by the way, 'Americanizing' the Fiesta is no small task. In addition to the regulatory compliance and testing issues, the entire dealer network needs to be updated and trained to support the vehicle. In addition, they need to make sure the quality is built in and verified rather than pushing it out too soon and getting killed with repair costs.

  10. By J-F Houle #10, Posted: 6/24/2008

    I'm optimistic about Ford. Nice new cars are coming like the fiesta and the next generation of focus. Ford cars are good. Americans must buy what they make. America has enormous trade deficit with any country. Your way of life is on the balance.

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