Sell Mercury and Volvo? Kerkorian's point man has it wrong at Ford

[saintlaz1]

Mulally is going to sell Volvo anyway, and it means keeping to doors open to retool and match the lineup from Toyota and Honda, why not?

 

That 160K in sales will be falling, considering consumers are shopping for high mileage vehicles and will be in 2009 also.

 

The profit Ford makes from selling high mileage vehicles is small to non existant compared to the profit on a PU or SUV, so why keep Mercury?

 

Because like I said before why would you want to lost 160000k in sales that they will not regain elsewhere, making a Mercury cost nothing, that brand is pure profit.

[TStag]

Every time I see your name in a thread, I can almost expect it having something to do with a British Brand. Yes they are profitable now, but you constantly ignore that they were money pits and their un-expected long term profitability.

 

Sorry by "they" you mean Jaguar. Land Rover didn't lose money for very long and most of the money they lost was actually not lost but invested in upgrading equipment and desigining new models. Aston Martin was a weird buy for Ford but has been a sound buy for a long time.

 

Jaguar has been a money pit, but largely because it was in a terrible mess when Ford bought it and then got lumbered with a product line designed by comittee. Now it's getting back to where it should be and looking very good for the future. Ford have invested billions. But to sell Jaguar at a low is bad shareholder value. The XF is everywhere I look. It's a SMASH HIT. It's pulling in big numbers now. Jaguar is back on form. But Ford have sold it. STUPID!!!!!

 

Volvo on the other hand needs a massive overhaul. It's going to require a lot of money to fix. Selling Volvo and keeping JLR would have made much more sense. The arguement against keeping Jaguar and Land Rover was that their models don't contain enough Ford parts. So there wasn't enough cost savings. But in actual fact Ford bosses are now making the opposite arguement at Volvo claiming it needs to be more like JLR and that it also needs to move upmarket Sorry but where's the direction at Ford from Mulally?

 

Right! Bill Ford knew the company and the industry. He knew what had to be done and was doing the right stuff. He was not smart enough to get the job done fast enough. He was also too causous when his staff told him that change was bad. He pick Mulally because Mulally could get the job done and would not accept the excuse that Ford has always done it this way. Bill Ford also knew that Ford had to merge its regional divisions. Mulally had success at this a boeng. Mulally also had experience in running a huge, high tech manufacturer. Bill could see this as the future of Ford.

 

 

Could you see Toyota or BMW or VW making a decision to appoint an Airplane man over immensely sucessfull staff from elsewhere inside the company? So far Mulally has been lucky that Bill Ford administered lots of tough love before he joined Ford. You may dismiss the idea of bringing in an FOE man but look at their strong sales growth. Ford is performing a miracle with it's sales over here. Honest to God it's like Ford is Schitsophrenic. It's got the strong profitable arm in Europe and it's got the US division. Sometimes you need to look across all the company for you top people. Ford's missed a trick.

 

And don't let the man from Boeing off so lightly. Only now has he said Ford must change it's tune and go for MPG efficient cars. What do you think all the competitions been planning for years? The Germans in particular are making a big push for Diesel cars. Why? Because they won the argument at home as fuel prices rose, then they won the arguement in the UK (an initially very sceptical market), as fuel prices rose...... hey and guess what Fuel prices have been rising for quite a while in the US. Funny how Toyota, Honda, Nissan and the entire European car industry has also woken up to this well over a year ago.

 

I can't believe your all cheering at Mulally seling Jag on the Cheap, keeping Volvo when it's in serious trouble and getting it wrong on model line ups. Bring back Bill!

Edited May 25, 2008 by TStag

[Edstock]

Volvo on the other hand needs a massive overhaul.

That's your myopic opinion.

 

Sorry but where's the direction at Ford from Mulally?

 

Unfortunately you and the rest of us aren't present at those meetings, so what do you know about any direction supplied by the Mull? Nothing.

 

Could you see Toyota or BMW or VW making a decision to appoint an Airplane man over immensely sucessfull staff from elsewhere inside the company?

 

No, because their corporate culture hasn't required it. Why? Because compared to Ford, Toyota hasn't been around very long, and their corporate experience has been one of continued growth from the ashes produced by all those B-29's, whereas Ford has had to contend with WW1, the 29 Depression and WW2, and a century-old way of doing things.

 

Similarly for BMW, which is quite junior to Ford in terms of length of existence, and like Toyota, rose from the ashes of WW2, only in their case, the ashes were produced by B-17's and B-24's.

 

Ford is performing a miracle with it's sales over here. Honest to God it's like Ford is Schitsophrenic. It's got the strong profitable arm in Europe and it's got the US division. Sometimes you need to look across all the company for you top people. Ford's missed a trick.

Considering what a basket-case Ford EU used to be, the head office did a masterful job of re-organization there. The NA market is now going through the same process.

 

And don't let the man from Boeing off so lightly. Only now has he said Ford must change it's tune and go for MPG efficient cars.

Again, you haven't been at those senior meetings since the Mull took over, so what do you know?

 

The Germans in particular are making a big push for Diesel cars. Why?

Because European diesel pollution standards are a lot easier than those in the US. VW can make the small diesels meet US specs, but bigger units require urea.

 

Funny how Toyota, Honda, Nissan and the entire European car industry has also woken up to this well over a year ago.

As did Ford, when the Fiesta/Verve and the new Ka were announced.

 

I can't believe your all cheering at Mulally seling Jag on the Cheap, keeping Volvo when it's in serious trouble and getting it wrong on model line ups. Bring back Bill!

Sorry, that's all Jag/LR was worth, or somebody would have paid more for it. As to Volvo being "in serious trouble", that's your opinion. Please supply hard facts about this "serious trouble".

 

Also, please supply details as to how the Mull is "getting it wrong on model line ups" with the new Taurus, MK S, Flex (all 3.5-3.7 liter giant-engine "gas guzzlers"), the 2K9 Escape 6-speed/2.5, the hot-selling Focus, the future Fiesta and Transit Connect and EcoBoost.

[mackinaw]

"Chief Executive Alan Mulally has told top executives he wants to eventually seek a buyer, according to people familiar with the matter."

 

"Mulally told reporters Thursday night that Volvo is not for sale." This is a quote from the 5/23/2008 Detroit News. Read the entire article here:

 

http://www.detnews.com/apps/pbcs.dll/artic...D=2008805230375

[jpd80]

I can't believe your all cheering at Mulally seling Jag on the Cheap, keeping Volvo when it's in serious trouble and getting it wrong on model line ups. Bring back Bill!

Sorry, Volvo is not in serious trouble, the losses are small in comparison to product revenue.

It does needs to change its product mix and use more of Ford's resources, that is happening.

[battyr]

Could you see Toyota or BMW or VW making a decision to appoint an Airplane man over immensely sucessfull staff from elsewhere inside the company? So far Mulally has been lucky that Bill Ford administered lots of tough love before he joined Ford. You may dismiss the idea of bringing in an FOE man but look at their strong sales growth. Ford is performing a miracle with it's sales over here. Honest to God it's like Ford is Schitsophrenic. It's got the strong profitable arm in Europe and it's got the US division. Sometimes you need to look across all the company for you top people. Ford's missed a trick.

 

I can't believe your all cheering at Mulally seling Jag on the Cheap, keeping Volvo when it's in serious trouble and getting it wrong on model line ups. Bring back Bill!

 

Toyota, BMW or VW would not appoint an airplane man. They think their corporate structure and way of doing things are the way they want it. Mulally was appointed to change the way things are done, and he has done it.

 

GM's biggest problem is that they hire student fresh out of high school, send them to General Motors Institute to be trained into engineers, and executives. They only know the GM way of doing things. The best thing they have done recently has been to hire Bob Lutz. He may be getting old, but he knows how things are done at Chrysler, Ford, BMW, GM and I think Saab. With Lutz knowing cars out side of GM. They only need a CEO who know running a company from of the auto industry.

 

As for Bill Ford. He is the Chairman of the Board with the power to oversee Mulally. Bill has the job he needs to be in, IMHO Bill is the best person for Chairman.

Edited May 26, 2008 by battyr

[mlhm5]

That's not what I asked in my original post.

 

I questioned whether or not it came directly from Ford. You posted a snippet about 'sources' closest to the deal.

 

Just because a spokesperson at Ford, or Al himself, didn't deny it doesn't mean it's true. How many times does the company have to put it out there that they aren't in the process of dumping the brand?

 

Sorry, but I doubt Ford Motor has to address every article from every publication. This includes the WSJ. Very weak line of reasoning.

 

OK, have it your way, but don't act surprised it there is an announcement this year about Volvo being sold, especially if the credit markets loosen and Ford can get $5+ billion.

 

Ford has never been good at marketing luxury brands and Mulally is not going to continue sinking money into a brand that does not fit into Ford's future, i.e. Mulally's recent announcement.

 

He will unload it as soon as Ford gets a decent price.

Edited May 26, 2008 by mlhm5

[mooseman]

Edstock is right on the money. The "Germans" and their diesels aren't exactly terrific. The Jetta TDI just landed with a 30/41 EPA rating. Reduce that mileage 20% to account for diesel running 20% more than gasoline and you have 24/33. Wowza. Ohh, those diesels. How will Ford ever build a midsize sedan that will come close to matching 24/33? /sarcasm

 

So, when the Hybrid Fusion/Milan/MKZ launch in 6 months and get possibly 36/40, they'll really be behind the curve.

 

They're working feverishly on the ecoboost motors and the powershift trannies (that promise another 5% FE bump). So, it probably won't be too long before we see 1.4 or 1.6L ecoboost powershift vehicles considerably surpassing the diesel's fuel efficiency on a dollar weighted basis, even without the additional cost of diesel motors factored in.

Edited May 26, 2008 by mooseman

[TStag]

I also have a feeling Ford will sell Volvo. I think it needs massive investment in product. In comparison to turning around Jag they have a lot more cars that need replacing and the design direction is going to have to change in an equally big way. They also have an image problem in Europe that means they will struggle to move into BMW territory whilst the likes of VW will snap at their heels at the other end of the market.

 

Every single model they have with the possible exception of 1 or 2 models is just wrong for the market place. I actually like Volvo's but there aren't enough people like me who like them for being Boxy, practical safe cars. And as much as I like them I can't say I'd buy one. If I wanted a 4x4 I'd g to Land Rover. If I wanted a passanger car I'd either go to Mercedes or Jag. If I wanted a C30 sized car I'd just buy a 1 series. Volvo is a nearly there kind of a brand. It always has been such a brand. It can make money, but it will never make a lot. For this reason Ford should probably sell it, especially as it can no longer easily component share with either Ford (too down market apparantly) or JLR. Maybe Ford should have tried to flog it with JLR as there always was a logic to them being together....

[twintornados]

With respect to Mercury, there is a thing called "loyalty" at FoMoCo....Mercury was the brainchild of Edsel Ford himself so the "preferred share holders" of Ford stock (AKA 'the family') will never 'sell off' Mercury.....I get my take on their loyalty due to the fact that despite all of this, the "Class B" stock remains firmly in the families control.

 

As for Volvo, while the family ties are not there, the brand has a loyal following and the "safety factor" of Volvo cannot be ignored, the DNA of those "safety" roots need to migrate into the Ford lineage. Ford should exploit the attributes of the many safety features found within a Volvo....remember the days of the valve covers on Ford engines that proudly proclaimed, "Power by Ford"? Now take that same idea and have sewn in tags on the seats of every car in the Ford, Mercury and Lincoln line-up with the words, "Safety Restraint by Volvo". Or even a tag on the back of SUVs and CUVs that have "Volvo" in a small script over the Roll Stability Control (RSC) badge as in "Volvo Roll Stability Control"

[NickF1011]

Sorry, Volvo is not in serious trouble, the losses are small in comparison to product revenue.

It does needs to change its product mix and use more of Ford's resources, that is happening.

 

People have a short memory. They forget that waaaaay back in 2007, Volvo had its best sales year ever.

[TomServo92]

People have a short selective memory provided it suits their argument. They forget ignore the fact that waaaaay back in 2007, Volvo had its best sales year ever.

 

Fixed it for you. I hope you don't mind.... :shades:

[mooseman]

I also have a feeling Ford will sell Volvo. I think it needs massive investment in product. In comparison to turning around Jag they have a lot more cars that need replacing and the design direction is going to have to change in an equally big way. They also have an image problem in Europe that means they will struggle to move into BMW territory whilst the likes of VW will snap at their heels at the other end of the market.

 

Every single model they have with the possible exception of 1 or 2 models is just wrong for the market place. I actually like Volvo's but there aren't enough people like me who like them for being Boxy, practical safe cars. And as much as I like them I can't say I'd buy one. If I wanted a 4x4 I'd g to Land Rover. If I wanted a passanger car I'd either go to Mercedes or Jag. If I wanted a C30 sized car I'd just buy a 1 series. Volvo is a nearly there kind of a brand. It always has been such a brand. It can make money, but it will never make a lot. For this reason Ford should probably sell it, especially as it can no longer easily component share with either Ford (too down market apparantly) or JLR. Maybe Ford should have tried to flog it with JLR as there always was a logic to them being together....

 

 

I'm not sure about massive investment. They have some great vehicles. I think one of the main issues is they just aren't marketed or targeted well. Lexus does very well with basically 2 cars making up the majority of their sales, the ES and the RX, both sharing a platform with a Toyota. The C30 is great, but if Ford isn't going to bring us the Focus RS here, then Volvo should be carrying the C30 R here. No reason to invest all the time and money in the EU developing that car when they can simply throw the same chassis tuning on the C30 here and get all the car mags raving about it here as well. Watching Clarkson wax poetic on the Focus RS on Top Gear should have been a kick in the ass Ford needed to simply make the C30 the Euro Focus here, with all the accolades included. But, no, the R-line got turned into a trim and badge package.

 

As well, the S40 might be a bit small. I own the previous gen POS Mitsu/Volvo S40, and the new one seems smaller. Even though I really like the new S40, its just too small. The S60 just doesn't do it from a dynamic or styling standpoint, as it is oooold, and the S80 is a bit of a stretch. So, what Volvo needs is the C30 2 door/S30 4 door/XC30 Wagon, C50/S50/XC50, C70/S70/XC70 and if they want a super saloon S90. The 50 would be sized in-between the 3 and 5 ser BMW, the 70 between the 5 and 7, and the 90 an executive hauler after they get the rest of the line finished, need be.

 

But right now they are just too all-over the map. C30, C70 (thats really a C40/50) XC60 (thats really a XC50), S40, V50, S60, V70 (thats just the same as an XC70), S80, and XC90. And they supposedly have a 4 door C30 coming and maybe an XC30/40/50 coming.

 

They need to focus and make it easier for people to shop their products.

 

I think the issue they face is Lincoln. If Ford killed Mercury, they could use Volvo as VW competitor and Lincoln as the high end, which would make more sense in the US market. And since Volvo isn't really considered a luxury car elsewhere in the world either, it would require probably more investment to change people's perception of Volvo elsewhere than it would be to introduce Lincoln as a premium brand.

Edited May 26, 2008 by mooseman

[sonofford]

I'm not sure about massive investment. They have some great vehicles. I think one of the main issues is they just aren't marketed or targeted well. Lexus does very well with basically 2 cars making up the majority of their sales, the ES and the RX, both sharing a platform with a Toyota. The C30 is great, but if Ford isn't going to bring us the Focus RS here, then Volvo should be carrying the C30 R here. No reason to invest all the time and money in the EU developing that car when they can simply throw the same chassis tuning on the C30 here and get all the car mags raving about it here as well. Watching Clarkson wax poetic on the Focus RS on Top Gear should have been a kick in the ass Ford needed to simply make the C30 the Euro Focus here, with all the accolades included. But, no, the R-line got turned into a trim and badge package.

 

As well, the S40 might be a bit small. I own the previous gen POS Mitsu/Volvo S40, and the new one seems smaller. Even though I really like the new S40, its just too small. The S60 just doesn't do it from a dynamic or styling standpoint, as it is oooold, and the S80 is a bit of a stretch. So, what Volvo needs is the C30 2 door/S30 4 door/XC30 Wagon, C50/S50/XC50, C70/S70/XC70 and if they want a super saloon S90. The 50 would be sized in-between the 3 and 5 ser BMW, the 70 between the 5 and 7, and the 90 an executive hauler after they get the rest of the line finished, need be.

 

But right now they are just too all-over the map. C30, C70 (thats really a C40/50) XC60 (thats really a XC50), S40, V50, S60, V70 (thats just the same as an XC70), S80, and XC90. And they supposedly have a 4 door C30 coming and maybe an XC30/40/50 coming.

 

It's true that Volvo marketing in NA is very bad. The C30 launch was a good example of that--they got a shoestring budget and the car had no ad support and no lease or finance deals. Then again, premium hatches are a tough sell in the US. I don't think the Audi A3 has set the sales charts on fire, either. The BMW 1 series may sell well, but it's got that magic badge. Time will tell.

 

Volvo's cars are good, but I wouldn't say they are great. And that is part of their problem. They are about as expensive as Audis or the Japanese high-end makes, but don't offer the same cachet, performance, or features. They face the same high labor cost/bad exchange rate as the other Europeans, but they have less room to raise prices.

 

It's also true their product mix is a bit weird. The XC90 is their big seller in the US, but it's getting old and no replacement is apparently going to be ready for several years. The S60 is ancient; supposedly an all-new model is coming in 2009 or 2010. Rumor is that when it does appear, the S40 will go away (at least here), leaving the C30 and any C30 variants as the low-end models. The XC60 looks like a nice vehicle and will be well-equipped. That, a new S60, and some better marketing would really help their US sales improve.

 

I have a V50 wagon and enjoy it, even though it is a bit small. I do hope Volvo stays in the Ford fold.

[mlhm5]

Because like I said before why would you want to lost 160000k in sales that they will not regain elsewhere, making a Mercury cost nothing, that brand is pure profit.

 

Is Mercury profitable? Probably not. So why keep them? Ford has $66 billion of debt and is not profitable and will not be profitable in 2009. Ford's cash on hand will only last so long and Ford needs to make some big investments to shift from SUV and PU to fuel efficient cars.

 

As far as Volvo, who in the USA is going to buy a car with about the same room as VW Golf for $10K more that gets fewer mpg? What was Ford planning for anyone to put in that trunk? Oh, I forgot it goes from 0-60 a lot faster.

 

 

[Edstock]

Is Mercury profitable? Probably not.

Probably yes. Are you a troll? Indisputably.

 

Ford has $66 billion of debt and is not profitable and will not be profitable in 2009. Ford's cash on hand will only last so long and Ford needs to make some big investments to shift from SUV and PU to fuel efficient cars.

Ford is profitable on a world-wide basis, right now. The debt was explained to you on another thread, but you have a track record for lack of comprehension.

 

As far as Volvo, who in the USA is going to buy a car with about the same room as VW Golf for $10K more that gets fewer mpg? What was Ford planning for anyone to put in that trunk? Oh, I forgot it goes from 0-60 a lot faster.

People who think that VW's are a POS, and don't want to drive something that looks like a Kraut army helmet on wheels. All it needs is a "pickle-holder" option for the roof.

[mlhm5]

Probably yes. Are you a troll? Indisputably.

 

 

Ford is profitable on a world-wide basis, right now. The debt was explained to you on another thread, but you have a track record for lack of comprehension.

 

 

People who think that VW's are a POS, and don't want to drive something that looks like a Kraut army helmet on wheels. All it needs is a "pickle-holder" option for the roof.

 

I don't know where you get your info from but Ford lost $2 billion last year. This year Ford will lose money and Mulally refused to say whether 2010 would be profitable.

 

Not many people are going to line up to pay $10K more for a car about the same size as the Golf that has more horsepower and is faster.

 

Mercury would not be profitable as a stand alone company.

[Deanh]

Probably yes. Are you a troll? Indisputably.

 

 

Ford is profitable on a world-wide basis, right now. The debt was explained to you on another thread, but you have a track record for lack of comprehension.

 

 

People who think that VW's are a POS, and don't want to drive something that looks like a Kraut army helmet on wheels. All it needs is a "pickle-holder" option for the roof.

BMW 1 series....selling rather well i hear....can get upwards of $42k...........

[Deanh]

Is Mercury profitable? Probably not. So why keep them? Ford has $66 billion of debt and is not profitable and will not be profitable in 2009. Ford's cash on hand will only last so long and Ford needs to make some big investments to shift from SUV and PU to fuel efficient cars.

 

As far as Volvo, who in the USA is going to buy a car with about the same room as VW Golf for $10K more that gets fewer mpg? What was Ford planning for anyone to put in that trunk? Oh, I forgot it goes from 0-60 a lot faster.

 

 

you need to re-price out a GTI....there is NOT 10k diff between the C and a comparably equipped VW....of course the VW probably gets that 61 mpg you keep throwing out there....

[Edstock]

Not many people are going to line up to pay $10K more for a car about the same size as the Golf that has more horsepower and is faster.

You just don't get it do you? Some people don't like your VW's: they don't like the way they look, and they don't like their "reliability". Volvo also has a reputation for safety beyond that of VW, so small-car buyers who are safety conscious will tend to rate Volvo higher than the VW's.

 

Mercury would not be profitable as a stand alone company.

Like, DUH. Maybe that's why they're Lincoln-Mercury dealerships, which are being converted to Ford-Mercury-Lincoln dealerships.

[Deanh]

you need to re-price out a GTI....there is NOT 10k diff between the C and a comparably equipped VW....of course the VW probably gets that 61 mpg you keep throwing out there....

base GTI 22800, similar spec C30 22900.....maxed out 27300 GTI, 26445 C30....wheres the 10k???????????????????????????????????????????????????????????????????????????????????? idiot. Or perhaps you just utilized some artistic licence and conveniently added tw Zeros to HOPEFULLY underline your worthless point. :shades:

Edited May 26, 2008 by Deanh

[mooseman]

I will say one serious problem Volvo has, and that is apparently terrible residuals. When you look at lease deals with luxury cars, which are probably the norm, though I have no evidence to support that assumption, look at the residuals on their cars, terrible. I think 36 month residuals for S40s are around 46%. Compared with a BMWs 3 series which can reach up to 60% for some models.

 

So, people cross shop on lease deals and see they can "step up" to a more expensive and dynamically better vehicle like a 3er for the same monthly payment, or in many cases even LESS, as the the "cheaper" S40. Volvo has to do something to address that issue.

[matthewq4b]

And yet Ford keeps saying Volvo is not for sale.

The plan is for Volvo to use more Ford derived products to improve its costs.

That doesn't sound like a company for sale to me - not in the immediate future anyway.

 

 

 

They took the same stance with JLR right up until they said it was for sale. I'm not picking here just stating. There were rumours about th JLR sale before it was officially announced.

 

 

I'm of the belife that Volvo could go on the chopping block but until it is officially announced Ford-Mullaly has no option but to deny that it is for sale.

Time will tell if there is any substance to the rumours. o point in second guessing at this point in the game.

 

 

And as was stated you can not sell Mercury there is nothing to sell. They are rebadged Fords (barely). It is not like they roll down different assy lines or have separate engineering depts. Mercury is Ford. Lincoln would be easier to separate from the fold than Mercury would be.

 

 

Matthew

[Pioneer]

Lincoln would be easier to separate from the fold than Mercury would be.

 

 

If you had made this statement before the closure of Wixom, I would have agreed. Now that Lincoln is made where it's Ford counterpart is, I have to disagree. Mercury and Lincoln are in the same boat.

[salsakingcpa]

...Volvo on the other hand needs a massive overhaul. It's going to require a lot of money to fix....

 

I have to disagree with you about this. Volvo turnaround is around the corner, and it does not require a lot of money to fix because Volvo's line up are very similar to Ford's and Mazda's. It's coming out with some decent new autos pretty soon, and I think it's going to break even this year (cash wise, in other words, it won't burn cash).

 

 

Pardon me, but I am wondering if mlhm5 & TStag is related; can someone find out? They both love European brands among other things, specially they both refer to VW quite a bit. Hopefully, TStag is not associated with Mark Fields because he is going to get canned for making negative statements about the current CEO. Incidentally, Mark Fields is very well liked by Bill Ford.

Edited May 27, 2008 by salsakingcpa