Ford Stand Shows Why The Company Is In Trouble
Ford has the biggest stand at the North American International Auto Show behind GM, and I was looking for clues as to why this giant of the industry was in such big trouble. After all Ford lost $3.3 billion in North America in the first nine months of 2006 as part of a $7 billion overall loss. For the same period in 2005, Ford lost $1.3 billion in North America. Mind boggling numbers. Ford's U.S. market share has plunged to 16 per cent from 25 per cent in 1995. It has also mortgaged the future with huge loans backed by most of the company's physical assets. How has Ford come to this? The answer must surely be in the product. As you walk on to the Ford stand, there's the Ford Edge, a smart looking medium sized SUV, flanked by a Ford Fusion. There's also a new Ford Focus, which looks different from the European version of the same name. Why does Ford squander scarce resources making its own Focus when there's a perfectly good one already on the roads of Europe? And come to think of it, Ford Europe is about to launch its new Mondeo, a mid-sized sedan that looks tailor-made for Americans as well. The Ford stand also shows off all the pickup trucks, including the class leading F-150. These have been huge profit earners in the past, but that's wobbling now as concerns over the environment mean the public is demanding better fuel economy, and smaller vehicles. It's when you look at the rest of the stand though that the doubts mount. The Lincoln and Mercury stands are packed full of bland vehicles, mostly badge engineered from mainstream Fords, and which don't have the brand power to compel premium prices. They probably end up selling as commodities, and taking sales away from Ford itself. If Ford truly needs more from its premium brands, perhaps it should concentrate more resources on its foreign firms. Mazda, (Ford owns about 33 per cent), full of great new ideas and high quality workmanship, is showing off the new CX-9, an Audi Q7 look-alike. There's the fabulous concept sports car, the Ryuga, with a door hinged down the centre of the roof. Volvo unveiled its XC-60 concept compact SUV, while its S80 big sedan is ready to roll into American dealerships. Land Rover has a new compact SUV, the LR2, while hidden away in a corner is the magnificent new Jaguar concept, the C-XF. Today, the C-XF is on a revolving stand, and whichever way you look at it, the car is beautiful. The rear end looks like an Aston Martin, as the roof sweeps down to the trunk. This does prompt a possible criticism. Will the headroom in the back be adequate? The car looks like a coupe because the rear door handles are hidden. Apparently they snap into view when you approach. The Jaguar C-XF is as handsome in the metal as in the pictures, with its jet fighter grille, and Maserati-reminiscent front end. Ford's only memorable action at the show was to announce a deal with Microsoft to add hi-tech gizmos to its cars. I can't help thinking that means a lot more cars breaking down with electronic failures, as the onboard computer suggests you switch off and start over. New Ford CEO Alan Mulally has the power of life and death over these brands. Which ones will still be standing when he has finished his work?