Bill Ford willing to step down

Things are heating up at Ford.

FRANKFURT (Reuters) -- Ford CEO Bill Ford Jr is prepared to let someone else lead the carmaker his great-grandfather founded should the right manager be available, he said in a magazine interview.

The auto maker's CEO told employees that the company needs a new business model and is considering turning to outside executives and making alliances with other carmakers.

"I'm always looking to bring talent into this company. If I can find somebody - I thought Carlos (Ghosn) was an exceptionally talented executive who could help the company - I'll go get him. That is regardless of the position," Ford told Newsweek in an interview posted on the magazine's website.

Asked if that applied to his own job as well, Ford replied: "Absolutely."

Ford was referring to past efforts to lure Ghosn, who is chief executive of alliance partners Renault of France and Nissan of Japan, to work for the number two U.S. carmaker, which is struggling to handle losses in North America.

Renault and Nissan are in talks with General Motors (Charts) now about joining forces in a three-way alliance. They have set a deadline of mid-October to decide whether to proceed.

Asked why he had approached Ghosn about forming an alliance with Ford, Bill Ford said: "I talk to Carlos all the time, but I'm not going to comment on that."

Media reports have said Ford called Ghosn to discuss an alliance should the GM talks fail.

Bill Ford said his top priority was guiding Ford back to profit in North America - where high fuel prices have crimped demand for Ford's sport utility vehicles and light trucks - and not to recruit a new CEO.

"I'm not looking to replace myself. I'm looking to make sure the company is stocked with talent. But look, right now I'm focused on getting the North American operations back on track. That's where my energy and time is going. That's my passion."

He said he would always be part of the company given family ties. The Ford family has 40 percent of the voting rights.

The auto maker's CEO told employees that the company needs a new business model and is considering turning to outside executives and making alliances with other carmakers, according to a Financial Times report on Sunday citing a memo it said was sent to staff.

The FT said on its Web site that in the memo, sent to Ford employees ahead of a turnaround plan to be unveiled later this month, Bill Ford said: "The business model that sustained us for decades is no longer sufficient to sustain profitability."

On Thursday, Ford said it wanted to sell its Aston Martin luxury unit to free up funds to invest in its other brands amid a sharp downturn in sales.

Shares of Ford (Charts) closed Friday at $8.27 on the New York Stock Exchange.

Quite simply...

Shrinking you manufacturing capacity and the number of employees, while lowering your sales expectations is simply not the way to deal with high legacy costs and increasing competition.

Ford should be trying to running say Kia out of business...laying off people and accepting lower market shares.

The Ford brand itself is in shambles, made up of cars that either don't stand out, or are rehashs of Mazda's and Volvos's that have been on the market for years. Focus is old and tarnished. They have a nice V6 coming 5 years too late. Most concerning, is that aside from the Mustang, I really can't remember a new car platform that was engineered entirely from scratch by Ford engineers (ie, not Mazdo or Volvo). I really think they may have a huge brain drain issue.

IMO, Ford was screwed when it let the Taurus go to hell. It was the last American made vehicle that could truly look Camry in the eye, and they completly ruined it with non investment. Talk about killing the Goose that laid the Golden egg!

Bill Ford's been looking to get out of that job for almost a year. Last summer he was quoted in a article as willing to step aside.

When Ford says the business model they have is no longer viable, he's talking about Ford's reliance on it's SUVs and Trucks for profits. Ford needs new high volume cars, but instead they're getting crossovers. I don't think there's any crossovers in the top 5 or 10 selling vehicles. But there sure is a Toyota sedan.

What's sad is that Ford alread has all the tools they need to recover. They either don't have the will, or don't have the workforce to get it done.

They still make the Mondeo in Europe. They need to certify it, buy the machinary, and use one of those plants they're closing up to make the thing. Ford has a new Falcon coming in 2008CY. They should be making preps to make it here as well. Europe's Ford Focus? NAFTA says you can't import it, so replace our old verson with it by making it here. Ford Ka is on sale in Mexico. Send some this way. Instead of just killing the Thunderbird, get some new sheet metal and interior and give it to Lincoln (ala concept car of couple years ago). Streach the LS chassis, add the sheetmetal of the Lincoln Contental concept and sell it as a Lincoln sports sedan... bigger than the Zephyr, smaller than the Town Car, and can sell for the same (relatively high) price the LS went for. And this time, it'd be worth it.

That's what gets me about Ford.

They have the same cash reserves as GM, yet fewer divisions and models to fund.They have more toys on the shelf than GM had that they could pull in to use. GM's almost certainly spending more on Zeta than it would cost Ford to get both Mondeo, Falcon, and the Euro Ford here. I'm guessing a rebodied streched LS sedan could probally be thrown in as well. Save the Lincoln, we're talking about cars already developed & in production, so no real development costs.

Again, I'm pretty exasperated at Ford..... and I'm a former Ford guy! :no:

...IMO, Ford was screwed when it let the Taurus go to hell. It was the last American made vehicle that could truly look Camry in the eye, and they completly ruined it with non investment. Talk about killing the Goose that laid the Golden egg!

Boy, do you have that right!! Taurus ran, what? 350,000? 400,000 per year? Even if half were given away to rental agencies, that's still number 1 in retail sales by a pretty big margin. Ford could have stuck the Taurus name on the new Futura and it would probally be good for at least a few dozen thousand extra cars. The name had equity, and it also had a good reputation for quality. It was the last American car to beat Camry, and the only reason it lost to the car was because Ford let it wither away.

Jerry Flint does a nice job of showing how Ford messed up four of its nameplates

http://www.forbes.com/2006/09/03/ford-explorer-taurus-cx_jf_0905flint.html?partner=alerts

They Used To Be Contenders

The idea for this column started when I heard complaints that people were not buying Ford Explorers because they did not like the door handles. I looked at the door handles. To me, they are fine, yet I realized that one could understand the disarray at Ford Motor by looking at the sales collapse of four vehicles, each of which had been a best seller or a close competitor in its class. Let us go back to 1996 to see how it all began to fall apart.

In 1996, the Ford (nyse: F - news - people ) Taurus sedan and wagon accounted for over half a million sales, including sales of its slower-selling sister vehicle, the Mercury Sable. Soon, the Taurus will be at zero. When you can run volume from 515,213 to zero, that is just dumbness, as is creating two totally different vehicles in a tightening market for family sedans, which is what Ford did in replacing the Taurus with the larger Ford 500 and the smaller Fusion.

In 1996, Ford sold 288,393 units of its Ford Ranger small pickup truck. This year, Ford will be lucky to sell 98,000 units of this ancient model. At one time, Ranger kept two factories humming. Now, Ford is going to close the remaining Ranger plant and will not say what comes next for this nameplate. Toyota Motor's (nyse: TM - news - people ) Tundra is blowing away a one-time Ford best seller. That is ineptness.

The market for small pickups has declined, but that is not a good excuse. With consumers becoming more conscious of fuel economy, it is frightening for a big company like Ford not to have a competitive entry--now or in the near future--in this segment.

Small cars are another key market where Ford took its eye off the road. Ford had been the small-car king since the Model T. In 1996, the company sold 232,441 Ford Escorts and Mercury Tracers. It looks like the Ford division will sell 190,000 copies of the Focus (the successor to the Escort) this year, while the Mercury group has been without a small-car entry for years. Honda Motor (nyse: HMC - news - people ), Toyota and Chevrolet models all outsell Focus. One key reason for the decline is that Ford has not kept the Focus up to date.

The fourth Ford model, the Explorer sport utility vehicle, is different. Changes in the market, more than inept management, have hurt Ford Explorer sales. Just a few years ago, Ford was selling more than 500,000 units a year, counting sales of its sister models from Mercury and Lincoln, and Canadian and Mexican sales. At that time, this model was the best-selling SUV in the world, with two factories running at full capacity. At its peak, Explorer generated operating profits of $6,000 to $8,000 a unit, which works out to $3 billion to $4 billion.

The Explorer was a terrific SUV--still is, even "recommended" by Consumer Reports magazine.

Through the first seven months of this year, Ford sold 132,500 Explorers and related models, versus 200,000 during the same time last year. Ford is likely to sell only 225,000 of these vehicles for all of this year--less that half the volume in peak years.

What went wrong?

Explorer's problems started with the Firestone tire firestorm in 2000. Under-inflated tires peeled, leading to rollovers, mostly in hot-weather states such as Texas and Florida. The negative publicity was enormous. Some think this killed the nameplate, and that Ford, at the least, should have renamed the Explorer, but this is hard to prove. In fact, total Explorer sales stayed high, above 450,000, until two years ago.

More important was that competition grew. GM's (nyse: GM - news - people ) Chevrolet Blazer and its offshoots were weak entries, but the Chevy Trailblazer, which GM rolled out in the 2001 model year, was a much-improved vehicle. Everyone else added new SUV models, and newer forms, like the "crossovers" that were built on a car chassis rather than truck frames like the Explorer. Crossovers like the Honda Pilot and Toyota Highlander in particular, are taking sales away from vehicles like Explorer. The increasing price of gasoline also hurt sales of the bigger SUVs.

Then there are those door handle complaints. Ford acknowledges that some folks had initial difficulty finding the relocated handles. The company is moving the handles again on the 2007 models to deal with this, but as noted, I did not have a problem.

I think that Ford made several mistakes with the Explorer. It redesigned the vehicle several times over the past decade and made big improvements to the underlying platform, but it did not do enough to distinguish the new models from the older versions.

Marketing is another area where Ford falls short. Two years ago, the company made stability control standard in all Explorers. This feature cured--as much as possible--the rollover issue with the Explorer, and it became the first high-volume SUV to have this safety system as standard. The problem is that Ford did a terrible job of communicating this news to the public. Frankly, in half a century of watching this company, I have never seen such weak marketing.

In three of these Ford vehicles, the failures seem to be the fault of the company's executives. But with Explorer, changes in the market are the key problem. Smarter decision-making might have helped, but people have turned to lighter, less-thirsty SUVs. Nevertheless, it is obvious that in the case of the Taurus, Ranger and Focus, Ford Motor executives were asleep at the wheel.

Boy, do you have that right!! Taurus ran, what? 350,000? 400,000 per year? Even if half were given away to rental agencies, that's still number 1 in retail sales by a pretty big margin. Ford could have stuck the Taurus name on the new Futura and it would probally be good for at least a few dozen thousand extra cars. The name had equity, and it also had a good reputation for quality. It was the last American car to beat Camry, and the only reason it lost to the car was because Ford let it wither away.

Guy, I don't know that it withered as much as it was the victim of a horrific error in styling.

Much like "Don't get involved in a land war in Asia", there is a fundamental axiom about high volume midsize cars and pickup trucks that consistently applies:

"Don't go radical with the styling on a high volume midsize bread-and-butter car, and NEVER style a fullsize pickup radically."

These parts of the market are all about incremental change and refinement of a basic theme, and rarely (if ever) about cutting edge styling.

DCX, for all the hay they made in the press with the 300 family is losing the large size sales war with the LUCERNE. The Impala (generally counted as a large car and not a midsize) is crushing them.

Lucerne - 10,690
Charger - 9710
300 - 9140

Impala - 23,702

That article is dead on!

Like GM, Ford got themselves in this mess.

Unlike GM, Ford's mess was nowhere near as bad.

Unlike GM, Ford has had more money and products available to repair itself.

Unlike GM Ford failed to use them, and has done little compared to GM & Chrysler to aggressively get new products out.

Even though GM was in worse condition & Chrysler is a smaller company, has less money and had a similar drop in sales last month, only Ford is in deep trouble, and not much in the pipeline.

That's why, even though I'm at least as much a Mustang fan as I am a Camaro, and appriciate the way Ford used to quickly bring vehicles to market with little "comittee" delays, I say it's time to sell Ford stock.

Ford will certainly survive, but it won't be the same.

I believe stocks will drop another 50% (as GM, Chrysler, Toyota, and Nissans's new models help these companies gain market share). I also strongly believe Ford will fall below Toyota & Chrysler, and settle around Honda's US market share (about 9%) by end of the decade.

That article is dead on!

Like GM, Ford got themselves in this mess.

Unlike GM, Ford's mess was nowhere near as bad.

Unlike GM, Ford has had more money and products available to repair itself.

Unlike GM Ford failed to use them, and has done little compared to GM & Chrysler to aggressively get new products out.

Even though GM was in worse condition & Chrysler is a smaller company, has less money and had a similar drop in sales last month, only Ford is in deep trouble, and not much in the pipeline.

That's why, even though I'm at least as much a Mustang fan as I am a Camaro, and appriciate the way Ford used to quickly bring vehicles to market with little "comittee" delays, I say it's time to sell Ford stock.

Ford will certainly survive, but it won't be the same.

I believe stocks will drop another 50% (as GM, Chrysler, Toyota, and Nissans's new models help these companies gain market share). I also strongly believe Ford will fall below Toyota & Chrysler, and settle around Honda's US market share (about 9%) by end of the decade.

Your analysis is foreboding, but I concur. Ford is the one that's in huge trouble. Interestingly, because a huge amount of the stock is held in one way or another by the Ford family, they've got interesting options available to them financially that GM and DCX do not.

"Don't go radical with the styling on a high volume midsize bread-and-butter car, and NEVER style a fullsize pickup radically."

The original Taurus was very radical at the time and the styliing was a good part of the reason for its success. Problem was, when it was time for the re-design Ford thought it had to go radical again but this time it was ugly, and worse, they didn't put much effort into improving the rest of the car.

On the pickup truck front, Dodge went radical with the 'Peterbilt" Rams in the early 90s, again to tremendous success.

The original Taurus was very radical at the time and the styliing was a good part of the reason for its success. Problem was, when it was time for the re-design Ford thought it had to go radical again but this time it was ugly, and worse, they didn't put much effort into improving the rest of the car.

On the pickup truck front, Dodge went radical with the 'Peterbilt" Rams in the early 90s, again to tremendous success.

Maybe I should re-quantify the above statement...

"Never go radical with styling with an ESTABLISHED BRAND in the midsize car or fullsize truck segments."

And...

BTW...

Dodge's "success" in the Ram area PALES next to the stunning numbers of pickup trucks GM and Ford sell and always have.

If the market narrows in pickup trucks, and it very likely will, the survivors are going to be GM and Ford. The chaff - in particular the Japanese pseudo trucks - will not be able to significantly penetrate a constricting market.

IMO Ford needs to:

- Get serious about sub-$16,000 cars.
- Build a Mustang platform based Sedan with muscle sedan styling and V8's
- Decide what a Lincoln is, stay away from FWD and keep the V8 in the MKS
- Replace the Ranger. Ford gave Toyota the #1 spot in mid/compact trucks on a silver platter.

After that they just need to keep cars fresh ever 4-5 years and they should do ok.

Ford needs to decide what Mercury is going to be and do it.
Ford needs to decide what Lincoln is going to be and do it.
Ford needs to decide what role Ford US is going to have for engineering, is it just going to be Mustang and Trucks?
Ford needs to kill Ranger, replace it, or update it.
Ford needs to do something with Jag, sell it or figure out what its role will be.

Then Ford needs to develop styling themes for each brand and stick with them, for better or for worse.

Ill take his job... Ill only need to keep it for ten minutes.

Fords current products arent even that inept... They're just not that damn special either. Get the new V6 and hurricane out and wedge both into everything...

Get a new RWD architecture, Focus, make the Mercs look like Acuras, not Lincoln... drop the ridicolous "MK" kill Zephyr and Mark LT, replace with Mark X, Zephyr and Continental off LS...

Thats like five steps... Give me a baseball bat and a stack of pink slips... Ten minutes... who wants to bet? I'll be the next automotive golden boy. :cool:

Seriously the problem with this is even if the new leader is infinetly better than BF its gonna take another five years for his ball to start rolling... That means another five years of bleeding money... :no:

I wonder if BM has submitted his resume` yet...

:p

So, basically they lost 250,000 Explorer sales in a few years. While you can blame Ford for a lot of things, I don't know if you can blame them for that -- not only is the segment crowded with different vehicles, demand has cratered.

I know there's a lot of negativity about Ford's future, but still I have to say that the Ford showroom looks way better than the Chevy showroom today (not in 2009).

I have never understood why the Euro Focus did not come to the US. My wife loves her Focus, but she starts drooling every time she sees the Focus ST.

http://www.carpages.co.uk/ford/ford_images/ford_focus_st_15_02_05.jpg

The Euro's Fiesta would have given the Aveo some healthy competition if not beaten it. I am a Chevy guy, but I personally think the Fiesta looks better, especially the Fiesta ST.

http://www.km77.com/marcas/ford/fiesta_04/st/med/33.jpg

I wouldn't mind seeing the next generation of Aussie Falcon over here either.

David

I have never understood why the Euro Focus did not come to the US. My wife loves her Focus, but she starts drooling every time she sees the Focus ST.

http://www.carpages.co.uk/ford/ford_images/ford_focus_st_15_02_05.jpg

The Euro's Fiesta would have given the Aveo some healthy competition if not beaten it. I am a Chevy guy, but I personally think the Fiesta looks better, especially the Fiesta ST.

http://www.km77.com/marcas/ford/fiesta_04/st/med/33.jpg

I wouldn't mind seeing the next generation of Aussie Falcon over here either.

David
Agreed on both the Focus and Fiesta, though that name doesn't bring up a good image in the US.

So, basically they lost 250,000 Explorer sales in a few years. While you can blame Ford for a lot of things, I don't know if you can blame them for that -- not only is the segment crowded with different vehicles, demand has cratered.
When you say Ford do you mean Mr. Ford or the company? Because you can blame Ford Corprate who let the Firestone fiasco occur. HUGE blunder that should have been met with an IMMEDIATE recall and replacement of ALL Explorer, Mountaineer, and Explorer Sport Tracs to get the tires replaced. If for no other reason that the reaction of the press and the public. Big mistake that cost Ford a LOT of midsize SUV sales.

Dodge's "success" in the Ram area PALES next to the stunning numbers of pickup trucks GM and Ford sell and always have

But look where they came from. I don't have the exact numbers but they went from something like 150k trucks to over 400k when the Peterbilt Rams came out. That's pretty damn successful in my book. There's no way you could expect them to hit the 800-1000k levels without the history and without the dealer body that GM and Ford have.

If the market narrows in pickup trucks, and it very likely will, the survivors are going to be GM and Ford. The chaff - in particular the Japanese pseudo trucks - will not be able to significantly penetrate a constricting market.

I disagree. First about the Japanese, they cater to a different market than the domestics so I can't see their marketshare shrinking in favour of GM and Ford. I can see Dodge losing share since they are fighting GM & Ford and aren't as established (and aren't as good of trucks), though they will never go back to their early-90s levels. GM and Ford will no doubt retain their top spots, but I can definitely see their shares eroding.

When you say Ford do you mean Mr. Ford or the company? Because you can blame Ford Corprate who let the Firestone fiasco occur. HUGE blunder that should have been met with an IMMEDIATE recall and replacement of ALL Explorer, Mountaineer, and Explorer Sport Tracs to get the tires replaced. If for no other reason that the reaction of the press and the public. Big mistake that cost Ford a LOT of midsize SUV sales.

Well, yeah, but I'm not convinced that the Firestone/Tire issue is affecting current Explorer sales that much. The product got stale, and so did the whole category of "soccer mom" SUVs.

Ford might have blundered like crazy over the last few years, but at the very least they did prepare for the decline of SUVs and they have solid midsize auto replacements in place, today. The only question is if they can figure out how to sell them -- which in the case of the 500 they totally screwed up.

I know there's a lot of negativity about Ford's future, but still I have to say that the Ford showroom looks way better than the Chevy showroom today (not in 2009).

Focus/Cobalt
Fusion/Malibu
500/Impala


None of those strike me as run away hits...