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What Hackett is Trying to do


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Can you honestly sit there and say you dont see the glaring problem with that?

 

Sales growth should not be a priority for Ford right now. Particularly in non-core segments and regions. Ford has a lot of organizational issues that have to be fixed first.

 

Here are some thoughts business consultants Jim Blasingame and Peter Meyer had about the fallacies of growth.

 

  • "If a tree is bent, fertilizing it won't make it grow straighter – only faster in the wrong direction. If you have organizational challenges, don't grow until they’re resolved."
  • "One of the rudest awakenings any business can have is when projected sales growth is achieved, but profit is no better, or perhaps worse, than a period of lower sales."
  • "Being the market leader is overrated. Peter cites research showing only 29% of market leaders were also profit leaders. Not only are you not going to sell every customer, you don't want every customer. Many customers, and some customer profiles, aren’t profitable. Remember, you don't spend sales."
  • "Write this on a rock ... Just because you can grow your business doesn't mean you should."
I think Hackett understands all this.
Edited by rperez817
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I think Ford has accepted the fact they cant really grow the company and are looking to maximize the profit of the share of the pie they do have.

But outside of F150, Ford NA is not really growing the pie (total annual sales),

they're just changing the ingredients (replacing car sales with truck utilities)

 

I get that and it will improve profitability..but it's not growing market reach

and actually reducing Ford's presence to about 25% of all SAAR customers.

 

Ford's loss of premium car buyers exactly coincides with lack of decent

refreshes/upgrades and years late transitioning from those very dated

unifying platforms to cutting edge next gen vehicles.- late late late.

 

I'm not suggesting that Ford should have been heavily committed to cars but

Ford actually did develop a C2 Focus and Fusion (Mondeo) that addressed

a lot of the buyer criticism in the current vehicles, they just got themselves

snookered by thinking they could off shore production and supply from China.

Edited by jpd80
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I hear an echo JPD.

not a criticism of akirby btw, I have high regard for his opinions and posts

 

For so many years Ford was able to cut to profitability and improve returns on fewer builds but

it never re-surged and grew the business, it never got out third gear and took some calculated risks.

It was always opportunity cost and risk aversion and a generally pessimistic outlook that resulted in

fewer builds per quarter that were traded as tighter inventory and less incentive - that's fine but how

many potential sales were lost by not being better at the game.....we pat ourselves on the back for what

was achieved but don't review what was missed in segments over the past six years, the years when

GM's sales and profits began to really take off..

Edited by jpd80
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Because Ford doesn’t have unlimited resources and they don’t want to overextend themselves in case the vehicle market crashes again. AVs, EVs, hybrids and utilities are the future and that’s where Ford is investing. They can’t do all that and keep all the low margin vehicles going at the same time.

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The reason Focus and Fusion became low profit vehicles is entirely because of those poor or no refreshes,

Titanium customers went elsewhere because they refused to buy a car that was virtually the same as the one

being traded in. That is the absolute gut punch in all of this, ROW markets have languished for similar reasons

 

AVs, EVs and connectivity are Ford's future pipe dream / all image but remain to be seen in terms of sales volume and profit.

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The reason Focus and Fusion became low profit vehicles is entirely because of those poor or no refreshes,

Titanium customers went elsewhere because they refused to buy a car that was virtually the same as the one

being traded in. That is the absolute gut punch in all of this, ROW markets have languished for similar reasons

 

AVs, EVs and connectivity are Ford's future pipe dream / all image but remain to be seen in terms of sales volume and profit.

 

No, people stopped paying for posher economy cars when Crossovers arrived and gas prices dropped. So Ford's business model of moving cars up market fell apart and essentially invalidated their car business.

 

Does anybody really believe Ford's investment into car products would yield a return? Obviously not, so what is Ford to do, let them shrink away taking up valuable factory space...or move on? Like it or not, we can't have everything, this is the harsh reality of the auto industry. You have to perform or you die. Just because people don't like it doesn't mean Ford is wrong.

Edited by Assimilator
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That's what U.S. customers who buy Fords want nowadays. About 80% of Ford vehicles sold in the U.S. so far this year are SUVs and trucks. Hackett and Ford should be in good shape here.

Well this customer who has been buying Fords for the last 25 years(and is now 49) WON'T be buying one the next time around. Not everyone wants trucks or CUVs.
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Well this customer who has been buying Fords for the last 25 years(and is now 49) WON'T be buying one the next time around. Not everyone wants trucks or CUVs.

 

Thats a false equivalency

 

The Small CUV market is now the Crown Vic of the Baby Boomer Generation-most of its sales are to people over 50 years old

 

Sedans aren't going to disappear right now, but the market is going to heavy favor CUV/Trucks to the tune of 60-70-80% vs the rest of them being sedans.

 

Car markers can charge a premium for CUVs now since people think the value is there for them.

 

Gas prices aren't as a big of deal-people aren't driving 12-15MPG highway Explorers now-they have CUVs that can hit 20+MPG no problem.

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WTF are you talking about? I was referring to myself, and I'm GenX, not a baby boomer. I bought my first new Ford at age 24, but my next car will be a Chebby or VW...depending on whether I want an American car above all else, or something sportier. Mazda has an outside chance. No other Asian brands(or FCA) interest me at all.

Edited by AGR
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WTF are you talking about? I was referring to myself, and I'm GenX, not a baby boomer. I bought my first new Ford at age 24, but my next car will be a Chebby or VW...depending on whether I want an American car above all else, or something sportier. Mazda has an outside chance. No other Asian brands interest me at all.

 

your missing the point-the market itself is driving the changes-sedans aren't as important any more-they aren't going away, but they are going to shrink down to what the minivan market is like now as a relation.

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No, people stopped paying for posher economy cars when Crossovers arrived and gas prices dropped. So Ford's business model of moving cars up market fell apart and essentially invalidated their car business.

I accept your POV but I think it was more recent than that because Ford first revealed SLP in April 2016

then cancelled it over the Christmas new Year period. So, just my opinion but things fell apart for both

Focus and Fusion around that time - Focus because they didn't do global refresh with 1.5T and 6AT/6MT

and Fusion began wearing out its welcome with small incentives and non-competitive finance terms.

That's the period when product mix collapsed- not gas prices, not Utilities although Ford would have been

encouraging every car buyer that way...

 

Does anybody really believe Ford's investment into car products would yield a return? Obviously not, so what is Ford to do, let them shrink away taking up valuable factory space...or move on? Like it or not, we can't have everything, this is the harsh reality of the auto industry. You have to perform or you die. Just because people don't like it doesn't mean Ford is wrong.

It's my opinion that Ford hasten the demise of Focus and Fusion by aggressively "positioning the well" to ensure

that those Titanium buyers chose another Ford product but, Edge and Explorer sales haven increased that much....

 

Now, even though Ford has a new Focus and and new C2 Mondeo/Fusion, I'm the first to admit that high series

buyers have now moved on - how tragic is that when Uncle Fester MKT was kept forever instead of a D4 based Aviator...

 

And if anyone was wondering further, Tariffs have killed off any thoughts of importing of cars from China.

but what I want to know is how this affects those white space vehicles - what will we actually see and are

they much better than what's being given up....

Edited by jpd80
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My problem with this strategy Ford is on is that eventually, everybody is going to start throwing incentives on CUV and SUV models to gain market share. I believe they will not be as profitable in the near future as they are now.

 

Ford has lost ground in this area(CUVs) too. Will adding Bronco, Maverick and others gain enough ground to cover the loss of the car market? And will the loss of margins on CUVs and having no car market and a smaller market share cause Ford to rely more on F series than they do now.

Edited by atomcat68
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My problem with this strategy Ford is on is that eventually, everybody is going to start throwing incentives on CUV and SUV models to gain market share. I believe they will not be as profitable in the near future as they are now.

 

If that was the case, other car companies would be able to "buy" market share with incentives (say Toyota in the full sized truck market)-but they are more or less affected by the same economic issues that Ford faces.

 

What it boils down to is that there is a higher starting line with Crossovers-The Escape starts at $22K vs say $16K for a Focus-they are nearly identical vehicles outside of the Escape having AWD across the line vs a single model of the Focus. So the actual cost to Ford isn't all that much different and gives them more leeway to add incentives if needed, but still be profitable.

 

Overall, Ford sells about 5.5 to 6.6 Million cars a year.

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Rumor is that Ecosport has picked up quite a few Ex-Focus buyers, so strategy is working there.

Is there another short C Utility (not baby Bronco) coming that could effectively replace Focus Active?

I have a hunch that a swept-back crossover with AWD could be on the cards as a better fit anyway..

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If that was the case, other car companies would be able to "buy" market share with incentives (say Toyota in the full sized truck market)-but they are more or less affected by the same economic issues that Ford faces.

I suspect that Toyota is doing that with Camry via fresh product investment with a lot of standard equipment,

Nth American Camry plant is now safe as importing Camry from China is now off the table

 

What it boils down to is that there is a higher starting line with Crossovers-The Escape starts at $22K vs say $16K for a Focus-they are nearly identical vehicles outside of the Escape having AWD across the line vs a single model of the Focus. So the actual cost to Ford isn't all that much different and gives them more leeway to add incentives if needed, but still be profitable.

 

Overall, Ford sells about 5.5 to 6.6 Million cars vehicles a year.

North America accounts for around 40% of them but almost all of the profit....

So whatever Ford is doing with sales mix in the rest of the world (no F Series) is barely break even.

Globally, I think it's time for Ford to stop trying to competing the way it has been and try a new playbook

'cause the one it's using sure as heck doesn't work......

 

 

Maybe that's it, models outside F Series have to keep a rich trim mix or else they go backwards on return,

if it's that knife edged, then maybe I can understand why dealing in car segments is just not worth it anymore...

Edited by jpd80
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