Autoextremist: Ford in Free Fall

[Trader 10]

I don’t know how you can jump to the assumption that all Ford has to do is discontinue sedans and 350,000 or so former Fusion and Focus buyers will fork over 5 to 10 grand more for one sort of crossover type vehicle. Most won’t - they simply can’t afford to. Ford will have to bring a lot more well heeled buyers into the fold to pull this off. I hope they can but the risk is huge.

[akirby]

I don’t know how you can jump to the assumption that all Ford has to do is discontinue sedans and 350,000 or so former Fusion and Focus buyers will fork over 5 to 10 grand more for one sort of crossover type vehicle. Most won’t - they simply can’t afford to. Ford will have to bring a lot more well heeled buyers into the fold to pull this off. I hope they can but the risk is huge.

Well those Focus and Fusion buyers have already been converting to utilities - that’s why they’re down and utilities are up. No reason to think that won’t continue.

 

But even if they don’t, so what? The sales they’ll be losing had little to no profit anyway, so they’ll still be making the same profit but at a higher margin (8% was the target). And they’ll be able to invest in new things with more profit potential.

[Assimilator]

I'll repeat it again but Jeep Renegade and Compass outsell all of Ford's economy cars Focus/Fiesta/EcoSport combined. If I told you Jeep would outsell Ford economy cars a few years ago, you would think I'm nuts. I would argue that trying to hang onto those traditional economy CAR customers is what caused Ford to ignore the critical growth segments. Ford biffed this segment up BIG TIME. The good news is that all of these customers remain low-margin so it's not exactly urgent to keep them, but it also means Ford has lost a tremendous amount of customer diversity. This also happened to Ford in Europe and China with the underachieving EcoSport next to an aging fleet of small cars. I think the biggest issue with Ford has nothing to do with cars but their Utilities which are underperforming and shrinking, this is an area where you want to see them most committed to and we appear to have that now.

[silvrsvt]

I don’t know how you can jump to the assumption that all Ford has to do is discontinue sedans and 350,000 or so former Fusion and Focus buyers will fork over 5 to 10 grand more for one sort of crossover type vehicle. Most won’t - they simply can’t afford to. Ford will have to bring a lot more well heeled buyers into the fold to pull this off. I hope they can but the risk is huge.

 

Using a 20K vs 25K car payment-if you add an extra year (5 year car payment and zero down) to the higher priced car its only like an extra $30 bucks a month at 3.11% interest.

[Harley Lover]

I agree that Farley hasn't done anything disappointing. Same with Hackett. They're good businessmen. They got vision.

 

I'll disagree with that statement. Both of them absolutely screwed the PR pooch regarding the handling of the announcement of "discontinuing all cars" save the Mustang and Focus Active. It couldn't have gone more poorly. That failure continues to bounce around the internet even today. And if you read accounts of Farley's performance at the Deutsche Bank conference in January, you'll come away with a different perspective.

 

My only guess regarding PDL's timing of the Farley piece is that this is something he's known for some time, but hasn't revealed for some reason. He alluded to the idea that there are many more examples of what he wrote, he simply didn't choose to, or have the space to, include them. Knowing that PDL's background is in advertising, I wonder if Farley putting the Ford account up for review was the straw that broke the camel's back?

Edited May 10, 2018 by Harley Lover

[silvrsvt]

 

I'll disagree with that statement. Both of them absolutely screwed the PR pooch regarding the handling of the announcement of "discontinuing all cars" save the Mustang and Focus Active. It couldn't have gone more poorly. That failure continues to bounce around the internet even today.

 

You must be new to the internet-shit that was around 5 years ago bubbles back up to the surface at times.

 

All the talk about discontinuing cars is just people flapping their cake-holes that would never buy a new Ford in the first place.

 

Its not like it really hurt FCA at all...

[Harley Lover]

 

All the talk about discontinuing cars is just people flapping their cake-holes that would never buy a new Ford in the first place.

 

 

Including all the posters in this thread?

[jcartwright99]

 

Including all the posters in this thread?

 

Hey man, I did my part!

[2b2]

People arent loyal to anything anymore, especially car brands. Its not worth it to lose money to bring someone into the brand if you dont have a reasonable assurance they will buy another higher-profit vehicle in the future.

seems to me that companies aren't loyal to their customers anymore either

wonder which came first?

[ZanatWork]

 

You must be new to the internet-shit that was around 5 years ago bubbles back up to the surface at times.

 

All the talk about discontinuing cars is just people flapping their cake-holes that would never buy a new Ford in the first place.

 

Its not like it really hurt FCA at all...

Yep, because nothing props up a position like speaking for huge numbers of complete strangers!

 

Oh, wait...

 

...actually, practically anything is better for that. Silly me.

[jpd80]

Maybe Ford felt it was better to get the shock and awe out of the way now, have all the emotions boil now

while those car are available and really have a conversation going forward about who really wants to

continue buying sedans that way they are versus doing something different...

 

I know it was stupid the way they presented it but maybe it cuts to the chase and forces Ford to now

explain exactly what those "white space" vehicles actually are as a way of re assuring existing buyers

that maybe something better is coming in the pipeline. I believe in a forgiving market, all Ford has to

do is lead those potential buyers on a journey and show them how the new will be better than the old.

Edited May 10, 2018 by jpd80

[akirby]

Maybe Ford felt it was better to get the shock and awe out of the way now, have all the emotions boil now

while those car are available and really have a conversation going forward about who really wants to

continue buying sedans that way they are versus doing something different...

 

I know it was stupid the way they presented it but maybe it cuts to the chase and forces Ford to now

explain exactly what those "white space" vehicles actually are as a way of re assuring existing buyers

that maybe something better is coming in the pipeline. I believe in a forgiving market, all Ford has to

do is lead those potential buyers on a journey and show them how the new will be better than the old.

 

I think they thought it would resonate with the analysts but they didn't calculate the backlash from the public.

 

They don't seem to think these things through - their PR decisions seem to be seat of the pants lately.

[jpd80]

Funny how Ford swings form not caring about Wall Street to falling all over them and investors.

And I guarantee you that if Ford didn't make this change now people like PDL would be the first ones

to condemn Ford for staying in the past with out of date cars in stead of moving its business to crossovers.

 

PDL clearly has an agenda with Farley that goes back many years and I think he's boot strapping any

decisions he sees as bad moves to Farley when in fact these changes all have to past muster with

the board and Bill Ford - the CEO and his senior VPs are still accountable for their actions

 

When it comes to PR and self promotion, Ford seems to fail badly by not explaining them selves,

I lay that all at the feet of Hackett, that happened on his watch - where was his helicopter view,

the journey you take folks on so they are not upset with plans.

Edited May 10, 2018 by jpd80

[akirby]

 

I lay that all at the feet of Hackett, that happened on his watch - where was his helicopter view,

the journey you take folks on so they are not upset with plans.

 

For once I agree with you.

[rmc523]

 

If Farley is on the hot seat, why would Hackett green light Farley's idea to drop sedans?

 

 

I agree......BUT......I'm willing to give Ford a bit of the benefit of the doubt here. Here's my rationale:

 

Farley (whether PDL's article is true or not) specifically mentioned additional white space models will be added. I do believe that some of these will be "reworked" sedans in the form of raised sportback type models, trying to straddle the line between a traditional sedan and crossover. With how TERRIBLE they've been with PR over the last couple of years (last year's NAIAS, Expy launch, CES this year, NAIAS this year, and now this sedan announcement), it's not at all surprising that they made this announcement without the "backup" of announcing a variety of other models to replace the sedan lineup to ease consumer fears/concerns. They could have been more specific without giving away specifics, or hell, have some sort of concept ready to show - even if it's just a concept not intended for production - something positive to give people to talk about, rather than nonstop talk about cut this, cut that, increase cuts from 15 to 25 Billion, blah blah blah. People don't want to hear that. People want to hear about what they're doing to increase quality (yet to be mentioned by Hackett), what they're doing for the future to move products forward....in a positive manner....not dropping this and that model.

 

Brand it as Ford re-inventing the sedan.....here's how I'd have the presentation go:

 

"At Ford, we're going to be at the forefront of the reinvention of the family vehicle, whether it be one of our excellent crossovers and SUVs - with the new Expedition, new Edge and all new Escape and Explorer, or coming Bronco all available in the next two years - one of our fantastic F-series or Ranger trucks or workhorse Transit and E-series vans, or our cars - Mustang and Focus Active, coming next year.....you all know about those products already, though. What we're here to discuss today is how Ford takes another step forward. We're ending the age of 'me too' sedans, we're moving away from the traditional sedan silhouette. We believe the market is ready for a new type of vehicle - one that blends the efficiency and aerodynamics of a car, with the functionality and adaptability of a crossover. With that formula in mind, here is the "Ford Future" concept (whatever you want to call it). This is a concept showing our vision of the future American family vehicle, and we fully expect it to inspire our next generation of vehicles. We will have more details coming on further product plans at a later date."

 

Presenting it like that presents a negative (moving away from traditional sedans), wrapped in a positive - giving people something to look forward to instead.

 

So I guess Hackett must read the forums and read my post from 2 days ago......

 

http://www.autonews.com/article/20180510/OEM/180519983/bill-ford-earnings-annual-meeting-hackett

 

 

"This doesn't mean we intend to lose those customers," Hackett said. "We want to give them what they're telling us they really want. We're simply reinventing the American car."

 

"We don't want anyone to think we're leaving anything," Hackett said. "We're just moving to a modern version. This is an exciting new generation of vehicles coming from Ford."

 

Also from the article:

 

 

Bill Ford blamed media coverage of the move for negative reaction to it. The automaker revealed its plans as part of its first-quarter earnings report.

"I wish the coverage had been a little different," he said. "If you got beyond the headline, you'll see we're adding to our product lineup and by 2020 we'll have the freshest showroom in the industry. The headlines look like Ford's retreating. In fact, nothing could be further from the truth."

 

 

In this day in age where only the dramatic headline is reported, what did he/they expect? They really thought people were going to focus on the adding to the product lineup comments, when nothing was shown to distract them?

Edited May 11, 2018 by rmc523

[akirby]

I agree you can't stop the press from creating sensational headlines, which they probably would have done anyway - but you also can't blame anyone but Ford for the way the message was conveyed.

 

There was absolutely no reason to say anything about sedans going away. They should have instead focused on the new vehicles they were introducing or planning. Focus wasn't supposed to be back for another 12+ months and Fusion isn't going away for another 3-4 years. It was a stupid thing to say and I think it was done off the cuff at the last minute without a lot of thought.

[ZanatWork]

I agree you can't stop the press from creating sensational headlines, which they probably would have done anyway - but you also can't blame anyone but Ford for the way the message was conveyed.

 

There was absolutely no reason to say anything about sedans going away. They should have instead focused on the new vehicles they were introducing or planning. Focus wasn't supposed to be back for another 12+ months and Fusion isn't going away for another 3-4 years. It was a stupid thing to say and I think it was done off the cuff at the last minute without a lot of thought.

The coverage went after the big headline, which anyone over the age of 10 would likely expect. The actual news was clumsy and ill-considered; it stands as a lesson regarding caving to Wall Street babble.

 

Ford's PR has been truly unfortunate for some time, now.

[2b2]

^ and 99.9% negative

 

...They don't seem to think these things through - their PR decisions seem to be seat of the pants lately.

I PRAY they didn't THINK...otherwise:

 

Funny how Ford swings from not caring about Wall Street to falling all over them and investors...

seems to me Ford has frequently over-re-acted to any number of things

 

...And I guarantee you that if Ford didn't make this change now people like PDL would be the first ones.

to condemn Ford for staying in the past with out of date cars in stead of moving its business to crossovers.

 

PDL clearly has an agenda with Farley that goes back many years and I think he's boot strapping any

decisions he sees as bad moves to Farley when in fact these changes all have to past muster with

the board and Bill Ford - the CEO and his senior VPs are still accountable for their actions

 

When it comes to PR and self promotion, Ford seems to fail badly by not explaining them selves,

I lay that all at the feet of Hackett, that happened on his watch - where was his helicopter view,

the journey you take folks on so they are not upset with plans.

 

 

 

you also can't blame anyone but Ford for the way the message was conveyed.

 

There was absolutely no reason to say anything about sedans going away. They should have instead focused on the new vehicles they were introducing or planning. Focus wasn't supposed to be back for another 12+ months and Fusion isn't going away for another 3-4 years. It was a stupid thing to say and I think it was done off the cuff at the last minute without a lot of thought.

Edited May 10, 2018 by 2b2

[SoonerLS]

They don't seem to think these things through - their PR decisions seem to be seat of the pants lately.

Someone I knew was in a PR class when some major poopstorm hit the fan. The leadership of said organization came out with some completely tone-deaf babble that just fanned the flames. The Prof asked what you should do if you were the PR chief for that organization. After taking suggestions from the class, she told them her answer: resign. They obviously weren't listening to you, so there's nothing you can do for them, and it's time to GTFO.

 

At this point, I'm thinking Ford can't have any PR people left in the organization, just marketing people, and those are two very different skill sets...

[Trader 10]

The sedan announcement went way beyond stupidity - it showed incompetence. It will cost Ford millions the next few years in lost Fusion sales.

[jpd80]

The sedan announcement went way beyond stupidity - it showed incompetence. It will cost Ford millions the next few years in lost Fusion sales.

I guarantee you they are already working down sales by not offering competitive incentives and financing.

By their timing , Fusion will be gone by 2020 so that's not even two years away....

 

The moment they pulled out that 33,000 way you can order a Fusion, I knew that it was a goner.

Shoot, Ford allowed that ordering process to happen because it was seen as necessary

but I think they just got tired of it not selling more of the higher series vehicles

although Hybrid and energi sales are still impressive.

Edited May 11, 2018 by jpd80

[2005Explorer]

I have to agree with autoextremist. My opinion is that the choice to walk away from cars completely is insane. I can see cutting down to a couple of sedans, but completely eliminating them is crazy.

 

I could not agree more. They should at least offer a Focus sedan (along with the Active), Fusion and Mustang. Focus on those 3 car lines and build excellent products. It's time Bill Ford saw the light again like he did when Nasser was killing them. He needs to get the board to fire this Hackett guy ASAP. He can take over as an interim CEO and start looking for another Alan Mulally.

 

I mean hell we are still waiting for the Ranger to finally show up at NA dealers sometime by this time next year while GM is selling 150,000 midsize trucks a year. I remember all the cheerleaders defending Ford for not building a midsize truck anymore claiming that everyone can afford a loaded F-150 and everyone wants a big ass pickup. Now I hear the claim that sedans are dead and Ford is so smart to cancelling all of them. Getting new customers in the door matters. If gas spikes to $4+ a gallon perception might matter again and that perception is still trucks and SUVs get worse MPG then a sedan. We are told if this happens Ford will be ready to launch new sedans in a few months because they are building them other places... sure... 5 years later we are finally getting a midsize truck.

 

I know some here will criticize what I am saying, but I was right when I said it was a mistake to completely exit the midsize truck market and I think it is a huge mistake to exit the small and midsize sedan market. Besides if they are still building a Focus for the rest of the world why not offer in North America? If they are still going to offer an MKZ why not build a Fusion to drastically increase parts and platform sharing? I don't get it.

Edited May 11, 2018 by 2005Explorer

[ANTAUS]

Something I remember from an article some years ago about the Camry, Toyota admitted they made no profit from it, but they said if they offer the customer a good experience with a dependable product, in which they hoped they would upgrade to another product (like SUVs/Crossovers/Lexus) in the future. Just sayin'....

[2005Explorer]

Something I remember from an article some years ago about the Camry, Toyota admitted they made no profit from it, but they said if they offer the customer a good experience with a dependable product, in which they hoped they would upgrade to another product (like SUVs/Crossovers/Lexus) in the future. Just sayin'....

 

 

This right here. If you are a full line manufacturer you need to get young people with less money into your door. Someday that Focus or Fusion purchase might become an F-150 or Expedition purchase. Give all of those customers away to Toyota and those future purchases will be a Tundra or maybe even a Lexus.

Edited May 11, 2018 by 2005Explorer

[2b2]

Someone I knew was in a PR class when some major poopstorm hit the fan. The leadership of said organization came out with some completely tone-deaf babble that just fanned the flames. The Prof asked what you should do if you were the PR chief for that organization. After taking suggestions from the class, she told them her answer: resign. They obviously weren't listening to you, so there's nothing you can do for them, and it's time to GTFO...

 

...The moment they pulled out that 33,000 way you can order a Fusion, I knew that it was a goner.

Shoot, Ford allowed that ordering process to happen because it was seen as necessary

but I think they just got tired of it not selling more of the higher series vehicles

although Hybrid and energi sales are still impressive.

imho, there was a Moron in the chain somewhere

at least one

Edited May 11, 2018 by 2b2