5 things Mark Fields will have to do

[akirby]

 

More like Fields didn't have the authority to implement the sweeping changes required in that plan.

 

Mulally came in with a CEO title and authority and the 100% backing of the Family and Board.

 

Fields didn't have any of those. He was just a senior executive. It was up to Bill to implement as CEO.

 

Bingo. I don't know if Fields wanted to combine NA and Europe platforms (Fusion, Escape, Focus) and create one global Ford but even if he did I don't think he or Bill Ford knew how to get it done. I think Mulally also brought a different way of thinking about sales and production where you put profit ahead of volume and revenue and you get rid of unprofitable things and replace them with profitable ones. That's a tough nut to crack especially in an old established company.

 

That's what I hope Fields has learned along with the cultural changes in management. I remember Mulally's first meeting where the division heads were presenting their metrics. Each one had a huge book of reference material (prepared by a dedicated staff of course) and some of the data was redacted or just not shown. Mulally asked why and they said well we just don't share all those details. He put his foot down and told them they would start sharing everything because they all worked for Ford and for him and by the way - next meeting no notebooks and no staff. He expected them to know the data they were presenting and be able to answer questions. That was a huge change for Ford. Hopefully Fields will continue that mindset and management style.

[NickF1011]

Just as an example,

Look at Corvette at the moment sales are up over 3,300 last month. I think Ford should be looking at niches to make sure

valuable customers aren't slipping through the cracks, there could be decent money there not being made.

 

I'm not suggesting that Ford do a Corvette, just simply look through their range for where value or vehicles can be added.

 

You have to look at the opposite side of that coin too though. In the year or two leading up to the redesign the Corvette rare sold over 1000 units a month.

[rmc523]

Not until Genk closes later this year and production begins in Spain.

So they're still selling the old model there? I thought they showed off the new one at the same time as the new Fusion?

[geronimo183]

So they're still selling the old model there? I thought they showed off the new one at the same time as the new Fusion?

 

Yep they showed off the New Mondeo/Fusion at the same time it was launched in the US. The proposed launch was 2013, then April 2014, now end of 2014, so by the time it is launched it will be an old product. It isnt like it was years ago where people were not aware of what was happening globally, the internet has made the world a smaller place and in doing provides greater knowledge instantly. Therefore potential customers, enthusiasts and the motoring press already know that it will be up to 3 years old by the time it gets here and when it does Volkswagen will be launching its brand New Passat. With high res imagery and 360 degree programmes people can familiarise themselves with product without even seeing it, therefore it does not have the same new/visual impact. VW are keeping the Passat under cover until its launch which to me will have greater effect.

 

 

One other thing that lets Ford down is that it never introduces the halo Focus derivative (being RS in Europe) until the end of the product life cycle. I suppose this is to boost interest towards the end of its life, but who wants to buy a halo product knowing it will be out of date in less than 12 months.

 

[rmc523]

 

Yep they showed off the New Mondeo/Fusion at the same time it was launched in the US. The proposed launch was 2013, then April 2014, now end of 2014, so by the time it is launched it will be an old product. It isnt like it was years ago where people were not aware of what was happening globally, the internet has made the world a smaller place and in doing provides greater knowledge instantly. Therefore potential customers, enthusiasts and the motoring press already know that it will be up to 3 years old by the time it gets here and when it does Volkswagen will be launching its brand New Passat. With high res imagery and 360 degree programmes people can familiarise themselves with product without even seeing it, therefore it does not have the same new/visual impact. VW are keeping the Passat under cover until its launch which to me will have greater effect.

 

I'm just not understanding why they're launching it so late? I thought it was on sale this whole time.

[Biker16]

 

 

In the end though, if Ford has solid product in the major categories, they don't need those niche vehicles.

 

Lincoln is a brand full of niche vehicles, does ford need Lincoln?

 

niche vehicles can and usually are more profitagble than mainstream vehicles.

 

ti ignore the opportunities around the edges with fewer price pressures is short sighted.

[fordmantpw]

 

Lincoln is a brand full of niche vehicles, does ford need Lincoln?

 

Nope, they don't. They've shown that by turning the company around with Lincoln basically being dragged along.

 

 

niche vehicles can and usually are more profitagble than mainstream vehicles.

 

CAN be, yes. I wouldn't say that they usually are due to the cost of bringing those niche vehicles to market. Sure, they can (usually) charge more for niche vehicles, but just charging more does not make them more profitable.

 

 

ti ignore the opportunities around the edges with fewer price pressures is short sighted.

 

You have to be able to see the forest through the trees. Only looking at the tree doesn't tell you the big picture, and I think you are just focusing on those few ornamental trees that grow quickly then die in a few years. Sure, they are nice to have, but you can't build a forest on those trees that don't stick around long.

[silvrsvt]

I'm just not understanding why they're launching it so late? I thought it was on sale this whole time.

 

Do keep in mind the mid-sized market in the EU is nothing like it is in the USA. The primary car in the EU is a C sized car like the Focus or a B car like the Fiesta, which have been both updated or in the process of being updated in the EU.

 

The new Fusion has been on sale in the US for only about a year and half now.

 

 

Lincoln is a brand full of niche vehicles, does ford need Lincoln?

 

niche vehicles can and usually are more profitagble than mainstream vehicles.

 

ti ignore the opportunities around the edges with fewer price pressures is short sighted.

 

What the hell are you smoking?

 

Where are you basing your "facts" on? How is the Corvette profitable...the Viper...so on and so forth.

[NickF1011]

There's a reason niche vehicles are called niche vehicles -- not everybody does or can build them. What vehicles can Ford build that others do not already do better? The Mustang comes to mind. But what other profitable niches are out there that Ford could just boldly jump into and expect to be able to compete with the limited number of other entries in that niche that already exist?

 

And it's not like Ford hasn't tried -- C-Max, Flex, Raptor, Transit Connect -- with mixed success. It just bugs Biker that Ford isn't jumping into the niches he wants them to.

[03 LS]

If these following vehicles are truly GLOBAL vehicles, not just "One Ford" in name only, I wouldn't mind Ford shipping several thousands copies of each to the US.

1. Diesel CrewCab Ranger

2. Focus RS

3. B-Max

 

By true global I mean "no modifications whatsoever", they'll pass US regulation tests/standards as is. The only added cost would certification cost and freight charge. But I suspect none of them could.

[grbeck]

Where are you basing your "facts" on? How is the Corvette profitable...the Viper...so on and so forth.

I'm pretty sure, based on the volume and the prices charged, that GM makes a nice profit on the Corvette.

[jpd80]

In case anyone missed it, Ford cracked in excess of 10,000 electric vehicle sales in May with Fusion hybrid leading the way.

If Fields wants a gold mine, i think totally exploiting both economy and performance hybrids is the answer.

nearly 6,000 Fusion hybrids and energis last month is mighty impressive.

and 1,128 MKZ hybrids, surely it's time for an energi MKZ.

 

Ford Motor Co.

.

Ford Fusion Hybrid...............4,641 (3,335 17,784) +39.16%

.

Ford Fusion Energi PHEV......1,342 (416) +222.60%

.

Lincoln MKZ Hybrid,,,,,,,,,,,,,,1,128 (715) +57.76%

.

Ford Focus Electric,,,,,,,,,,,,,,,,177 (157) +12.74%

.

Ford C-Max Hybrid,,,,,,,,,,,,,,,,,2,051 (3,261) -37.11%

.

Ford C-Max Energi PHEV,,,,,,,,782 (450) 73.78%

.

FORD MOTOR CO. TOTAL 10,121 (8,334) +21.44%

 

Oh, and in comparison, Volt was 1,684, diesel Cruze scored another 511....ELR 52.

 

LINK

Edited June 10, 2014 by jpd80

[bzcat]

I'm just not understanding why they're launching it so late? I thought it was on sale this whole time.

 

There was a currency crisis in Europe 2 years ago and a major recession. Sales of large non-premium cars (i.e. Mondeo, Passat, Insignia, 508 etc) in Europe fell through the floor. The large non-premium cars are almost exclusively fleet sale in Europe (company buys/leases cars for employees due to tax preference treatment) and most companies were not in the market to buy new ones during the Euro zone crisis.

 

Couple that with the fact that Ford wanted to shut down Genk... so they decided to keep the old model on the market for another year, which turned into 2 years and counting.

 

It would have been a financial disaster for Ford to launch the new Mondeo in that economy situation.

[jasonj80]

In case anyone missed it, Ford cracked in excess of 10,000 electric vehicle sales in May with Fusion hybrid leading the way.

If Fields wants a gold mine, i think totally exploiting both economy and performance hybrids is the answer.

nearly 6,000 Fusion hybrids and energis last month.

 

Ford Motor Co.

.

Ford Fusion Hybrid...............4,641 (3,335 17,784) +39.16%

.

Ford Fusion Energi PHEV......1,342 (416) +222.60%

.

Lincoln MKZ Hybrid,,,,,,,,,,,,,,1,128 (715) +57.76%

.

Ford Focus Electric,,,,,,,,,,,,,,,,177 (157) +12.74%

.

Ford C-Max Hybrid,,,,,,,,,,,,,,,,,2,051 (3,261) -37.11%

.

Ford C-Max Energi PHEV,,,,,,,,782 (450) 73.78%

.

FORD MOTOR CO. TOTAL 10,121 (8,334) +21.44%

 

Oh, and in comparison, Volt was 1,684, diesel Cruze scored another 511....ELR 52.

 

LINK

I still can't figure out why the ELR is so flipping expensive - If they could have sold that thing for 42/45 after the tax rebate the would sell more than the Volt. For the price they want you can get a Tesla with the big battery pack.

 

I still think a hybrid or Diesel MKC would help the Lincoln perception problem as well. MKC looks to be a good vehicle, the biggest fear is that the gas tank is too small, I already think the one in the Escape could use a few more gallons, and with the 2.3L you're gonna be at 280 miles before you need to refill it. People will equate that to very poor fuel economy.

[Biker16]

Nope, they don't. They've shown that by turning the company around with Lincoln basically being dragged along.

Then why is Ford investing in Lincoln?

 

CAN be, yes. I wouldn't say that they usually are due to the cost of bringing those niche vehicles to market. Sure, they can (usually) charge more for niche vehicles, but just charging more does not make them more profitable.

I did not mince words, they usually are profitable because they can charge a higher price.

 

They cost less to bring to market because they are design to be low volume so less time and money is spent marketing,designing and fabricating the vehicle.

 

You have to be able to see the forest through the trees. Only looking at the tree doesn't tell you the big picture, and I think you are just focusing on those few ornamental trees that grow quickly then die in a few years. Sure, they are nice to have, but you can't build a forest on those trees that don't stick around long.

I see it differently,every mainstream segment began as a niche segment. You are looking at think in a way that expects things never to change. look at niches not at a liability but as opportunity to grow.

 

Where are you basing your "facts" on? How is the Corvette profitable...the Viper...so on and so forth.

Who said the Corvette wasn't profitable? It how hard is it too sell a vehicle profitably for $53,000.

 

Look at the long list of vehicles that sell for less, and sell in lower volumes, You just have to be Clever.

Edited June 11, 2014 by Biker16

[fordmantpw]

Then why is Ford investing in Lincoln?

 

I guess they feel they can make money on it. And, realistically, they won't be niche once they start selling in decent volumes.

 

 

They cost less to bring to market because they are design to be low volume so less time and money is spent marketing,designing and fabricating the vehicle.

 

That just makes no sense. They still have to design the vehicle to meet crash standards, EPA regs, etc. They have to engineer all of the parts to last. They can't just put out a crappy product. Sure, they will re-use as many parts as possible, but they have to test everything just like on any other vehicle. They can't say 'well, this is a niche vehicle, so let's only test it for 6 months instead of 2 years.'

[Edstock]

"so less time and money is spent marketing,designing and fabricating the vehicle"

 

GO and really look at the door and window assemblies on the Audi A-7 4-door and the BMW 6-series 4-door. Then there's the interiors, with a zillion pieces that you don't see to build a high-end luxury car.

 

The pieces cost more, and it costs more to assemble it.

 

Here's an A-7. Check out the door fit into the body shell. The flush side glass is so fine.

 

 

Similarly, the BMW 650i

 

[akirby]

Niche vehicles are harder to build and more costly to build and engineer and even with high gross margins the lower volume makes it nearly impossible to make as much as a lower cost, higher volume mass market vehicle.

 

To suggest otherwise is to ignore the facts.

[MKII]

I'm just not understanding why they're launching it so late? I thought it was on sale this whole time.

New Mondeo finally starts production at Valencia Assembly in Spain in September

[Biker16]

"so less time and money is spent marketing,designing and fabricating the vehicle"

 

GO and really look at the door and window assemblies on the Audi A-7 4-door and the BMW 6-series 4-door. Then there's the interiors, with a zillion pieces that you don't see to build a high-end luxury car.

 

The pieces cost more, and it costs more to assemble it.

 

Here's an A-7. Check out the door fit into the body shell. The flush side glass is so fine.

 

 

Similarly, the BMW 650i

 

 

If those doors were designed and assembled by a supplier it would costs less to Develop.

 

lets be honest, a door for a $70,000 car has every right to be complex, and likely requires a lot of manual labor to ensure fit, something that isn't cost effective for a high volume main stream vehicle.

 

 

Niche vehicles are harder to build and more costly to build and engineer and even with high gross margins the lower volume makes it nearly impossible to make as much as a lower cost, higher volume mass market vehicle.

 

To suggest otherwise is to ignore the facts.

what facts?

 

Did the 2005 Ford GT cost as much to develop as the Focus or Fusion? No

 

the cost to develop a vehicle doesn't increase because you are making fewer vehicles.

 

I will outline 4 basic costs of a vehicle.

 

1a) Development cost ( cost to design, engineer a vehicle)

1b) Cost to start up production of a Vehicle

2a) production costs (cost per unit to assemble vehicle)

2b) materiel costs (cost of purchased parts for vehicle)

 

1a) development costs are fixed and assigned to each unit of production until that cost is recovered.

Design and Engineering of each part of the vehicle not only for consumer consumption but for producibility. depending on the scale of the program can involve 1000s of people for multiple continents)

 

1b) fixed cost of setting up productions of Said vehcle, can vary wieldly depending on the anticipated volumes and locations of prodction.

For platforms like C2 these cost are enormous and likely multiple times the cost to develop a vehicle. ( think about all the Dies that have to be bought, production systems that must be created, plants that must be retooled and workforces that must be trained to build this product.)

 

2a) Variable costs in labor, electricity, everything used to assemble to final product.

this is where you see large investments in automation in body shops, paint shops, and through out the plant, to increase the speed of production and reduce to cost to produce each vehicle.

 

2b) Semi fixed costs of buying parts, components and raw materials for the vehicle.

usually prices are constant over the life of a product but can rise and fall with commodity prices. big deal because supplier are building larger and larger modules for vehicles these days. and automakers decide whether to build in source or outsource based upon the anticipated Volume of the product and the Required expertise of the supplier. for Example ford doesn't build fuel pumps in house they buy them from suppliers, and these supplier in some cases can Design and manufacture the entire fuel system of a vehicle.

 

With Low volume vehicles there are incentives to trade lower development costs for higher production costs.

 

Some advantages of low volume over high volume

1. simpler deign and engineering, less variations in the product. Compare the differ combinations of the global Focus, to that of the jaguar XJ
2. Designing for more labor intensive assembly, fewer robots to buy Smaller plant.
3. Use Tier 1 supplier more for design, engineering and production.
4. Usually only one assembly site and a far shallower supply chain.
5. Smaller assembly sites
6. allows use of less expensive tooling ( I.E. the Corvette uses balsa wood and fiberglass instead of stampings.)

Disadvantages of Low volume products

1. Fewer products to spread 1a and 1b costs over
2. higher costs per unit to produce

to be successful at making low volume product you have to think differently about how you design, engineer and build those cars. I think Toyota, honda, nissan, and mazda have learned how to be successful at both low and high volume products, they have learned how to balance economies of Scale that volume gives your with the efficiencies of working in a small team environment, ford does this well with SVT and Team RS. look at the GT, ford needs to have the ability to build the entire gamut of products that the market is demanding.

Edited June 16, 2014 by Biker16

[jpd80]

I would argue that development costs and start up costs associated with plant set up

have to be paid up front of any production and not assigned as a per vehicle cost.

 

Similarly, supplier contracts are signed up in terms of up front payments for start up

and then progressive payments determined by volume and years of supply.

 

While C2 may seem an expensive platform, the delivery of multiple vehicles sharing

many engineering modules and common supplier base saves way more costs than

worrying about the costs of stamps, folding metal, those different bodies become

relatively cheap when the right elements and vehicle envelopes are used.

Edited June 16, 2014 by jpd80

[silvrsvt]

 

Did the 2005 Ford GT cost as much to develop as the Focus or Fusion? No

 

But your also talking about a car that cost $150K and they only sold 4K over two years...that already had a history behind it.

 

To develop a Lincoln like that would be downright stupid....

[akirby]

What I'm saying is if you're trying to design a $60k-$80k sedan vs. a $20k-$35K sedan you have to pay a lot more attention to details and develop a lot more custom parts. New drivetrains, more software, more complicated parts (Lincoln Ride Control e.g.), more performance testing, new materials. Less reuse of existing parts and designs.

 

GT was a special case because it was ultra low volume with a single purpose. You can't do that with a mass market Lincoln sedan e.g.

[Edstock]

IMHO, this isn't worth starting a new topic, but worth a read:

 

Engineer keeps Ford's DNA healthy in each part, across every model

 

http://www.detroitnews.com/article/20140616/AUTO0102/306160005/0/auto01/Engineer-keeps-Ford-s-DNA-healthy-each-part-across-every-model

 

 

Dearborn —Larry Kummer likely has the most awesome auto job you’ve never heard of.

Heck, Kummer has the most awesome auto job he’s ever heard of.

It’s his job — as the eyes and ears of Ford Motor Co.’s self-described DNA — to drive Ford cars here, there and everywhere to ensure they look, feel and sound the same, whether a customer is in Russia, China or Dearborn.

[NickF1011]

IMHO, this isn't worth starting a new topic, but worth a read:

 

Engineer keeps Ford's DNA healthy in each part, across every model

 

http://www.detroitnews.com/article/20140616/AUTO0102/306160005/0/auto01/Engineer-keeps-Ford-s-DNA-healthy-each-part-across-every-model

 

 

Dearborn —Larry Kummer likely has the most awesome auto job you’ve never heard of.

 

Heck, Kummer has the most awesome auto job he’s ever heard of.

 

It’s his job — as the eyes and ears of Ford Motor Co.’s self-described DNA — to drive Ford cars here, there and everywhere to ensure they look, feel and sound the same, whether a customer is in Russia, China or Dearborn.

 

There's something to be said of that. I believe it was Mulally who made a comment about that when he came on that he wanted a driver to know he was in a Ford, regardless of which continent or which vehicle he/she was driving in.