Bill Ford: Time to sell more cars
Automaker is fine-tuning its turnaround, predicts bigger, better market share in 2005
By Daniel Howes / The Detroit News
"I do agree it's time for us to perform better in terms of retail (market) share," said Chairman Bill Ford Jr. on Tuesday.
DEARBORN--Nearly three years into the gargantuan task of leading Ford Motor Co.’s turnaround, Chairman Bill Ford Jr. is smart enough to resist the urge to order lapel pins publicly touting his market share goal because he knows he might not reach it.
Just ask General Motors Corp. brass, who might as well turn the nines on their “29” pins upside down.
Bill Ford knows another thing, too. The carmaker founded for the masses 101 years ago, now navigating successfully through an existential crisis, can’t steadily lose business to rivals in its home market without eventually robbing revenue and beggaring the bottom line.
“I do agree it’s time for us to perform better in terms of retail (market) share,” he told me in an interview Tuesday, adding that we should expect Ford’s share of the U.S. market to be “better ... in ’05 than in ’04.”
Let’s hope so. The Ford blue oval’s share of the U.S. market — a metric that effectively justifies a company’s size, how much it spends on developing new cars and trucks, how many plants it operates and how many people it employs — has declined for nine straight years. And GM’s Chevrolet is poised to outsell the Ford brand for the first time in 17 years.
A concern? Sure. A cause for panic in this market-share- obsessed town? Not necessarily.
“We will have had an almost $10 billion turnaround in three years,” Bill Ford said. “That was the first order of business — to stop the bleeding and to engineer a financial turnaround ... and to rebuild credibility with our shareholders. We’ve done that.
“Three years ago we were talking about turning around the entire automotive operations of the company. Today we’re talking about turning around Jaguar. That’s a big difference.”
Yes, it is. It can be diminished by the glass-is-always-nearly-empty critics who find fulfillment in exploiting whatever weaknesses, some of them legitimate, they can find in Ford’s far-flung empire. But Ford’s accomplishments mostly shouldn’t be diminished. For example:
Losing market share in the car business is almost always troubling and can be a clear sign of deeper problems. But propping up market share by running your plants to conform to labor agreements and sell into daily rental fleets, erasing profits, arguably is worse. Especially in the short term and, secondly, when you’re trying to rebuild the luster of your brand.
Cynics can focus on the abysmal performance of Jaguar Cars and the unmet potential of Land Rover — both accurate assessments — but risk ignoring the critical, financial and market success of the all-new F-150 pickups. In the Ford world, there’s nothing more important than the success of the F-150, and Ford isn’t consistently beating Wall Street estimates because its management is inept and its bedrock products are all junk.
There’s the comparatively poor fuel economy of Ford’s U.S. fleet, a favorite target of environmental activists who can’t be bothered with most industry nuance. To wit, a company that produces some 900,000 full-size pickups every year and hundreds of thousands of SUVs will have lower fleet fuel economy than a foreign automaker ramping up truck and SUV production.
There’s the fact that Ford and its Detroit rivals are lagging Toyota Motor Co.p. and Honda Motor Co. in the gasoline-electric hybrid vehicle race. But Ford will be the first American automaker to offer a hybrid powertrain in U.S. showrooms in an SUV that already is widely accepted in the marketplace.
There are the two bland mid-size products coming this fall from Ford — its Five Hundred sedan and Freestyle crossover vehicle, Ford’s first. They may indeed be conservative, even derivative of a 5-year-old VW Passat, but you only need to understand the success of, say, the Toyota Camry to understand that affordable and dependable blandness can mean big success if they are executed properly.
Are the Five Hundred and the Freestyle destined to be home runs? Probably not. They may not need to be in Bill Ford’s 21st-century Ford, which is building “our business case on the back of hitting a bunch of singles.”
That said, Ford’s ballyhooed “Year of the Car” is on display at a showroom near you, meaning the years of excuses are over. No more pointing to the future products as the automotive cavalry that will beat back the steady assault of mostly foreign competition.
The Five Hundred, the Freestyle, the Mustang and the Escape Hybrid need to arrest Ford’s market-share slide — now at 16.4 percent — and begin a slow crawl back, or questions about Ford’s fixability will overshadow its valid markers of success.
Bill Ford has his own management team, shorn of the natty dressers and smooth talkers who played their parts but didn’t deliver. He has new cars, a killer pickup, a revived Mazda and a gutsy-and-aggressive turnaround for Jaguar that should reap results and improve the bottom line (once the cash-sucking Formula 1 team and its assets are cut loose).
Still, three years on, we still lack a discernable revival strategy for Lincoln, now a clear also-ran to the undeniable renaissance of GM’s Cadillac. And we see few signs of real progress for Ford’s Premier Automotive Group, its collection of Aston Martin, Jaguar, Land Rover and Volvo.
Those must come next because they have to, like new chapters in a long story that will take some time to finish.