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Old 01-23-2006, 08:24   #1 (permalink)
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US:Job 1 at Ford: End market-share skid

Job 1 at Ford: End market-share skid

Amy Wilson
Automotive News

DETROIT -- The clock is ticking on Ford Motor Co.'s "Mark-and-Anne plan."

And with Ford's core North American automotive business hemorrhaging cash, that duo -- Mark Fields and Anne Stevens -- must work fast to execute the company's second turnaround plan in four years.

Halting its dismal market share slide will be the key to getting Ford out of the muck. The problem: If Ford continues to lose share, the production capacity cuts realized by the plant closings scheduled to be announced Monday, Jan. 23, won't be enough.

Ford Motor CEO Bill Ford said on Jan. 8 that the automaker needs to halt its 10-year market share decline in 2006.

Fields, CEO of the troubled Americas unit, echoed that goal in an interview last week.

"It's a tough market out there," Fields said. "We realize that. But our intent is to stabilize our market share. … Our intent is not to cede another two or three points of market share."

Stabilizing market share is one key tenet of the "Way Forward" plan developed by Fields and Stevens, COO of the Americas. Ford was expected to announce Monday that it will close several assembly and component plants, slash thousands of jobs and phase out struggling products -- most likely including minivans.

The automaker also was to announce its full-year 2005 earnings. Through the first nine months of 2005, Ford's North American auto business lost $1.4 billion before taxes.

But Ford Motor will be hard pressed to hold share given the rapidly increasing growth by transplant automakers.

Forecast: Steady erosion
Some analysts forecast continued steady erosion in the automaker's share over the next several years. Goldman Sachs analyst Robert Barry predicts Ford will lose another 2.1 percentage points of market share during the next three years.

Ford's domestic brands ended 2005 with 17.4 points of market share, down from 18.3 in 2004.

But that's "unsustainable," Barry said in an interview, "not because they'll have bad products or bad management, but because the market is just too competitive and the product attributes are just not proprietary (enough) to have that much market share."

Ford's current North American capacity utilization is about 75 percent, executives have said. Analysts say Ford needs to cut out about 1 million units, or 25 percent of its assembly capacity.

Even if the automaker restores its capacity utilization to 100 percent based on current sales, more share loss would again put utilization below capacity. And then Ford may have to close more plants. Indeed, Ford does have a contingency plan in the works if the "Way Forward" plan falters, said a source familiar with the plan.

As it tries to hold share, Ford is touting new products such as the 2006 Ford Fusion, Mercury Milan and Lincoln Zephyr sedans, plus the 2007 Ford Edge and Lincoln MKX crossovers. But the crossovers don't go into production until October.

The Fusion sedan has sold well during its first few months on the market. But whether sales will be strong enough to keep Ford at that 17.4 share level is questionable.

Ford already has said it doesn't expect the Fusion to win over a large chunk of Toyota Camry and Honda Accord buyers. And Toyota will launch a redesigned Camry this year.


Other products decline
At the same time, other Ford products, especially SUVs, continue to decline. The Taurus is scheduled to die this year. Sales of the Ford Freestar and Mercury Monterey minivans have been dismal. They also are expected to be killed.

Other new and updated products coming for Ford include:


The redesigned 2007 Ford Explorer Sport Trac, which goes into production in February and on sale in the spring.


The 2007 Ford Shelby Cobra GT500, which goes on sale this summer.


The redesigned 2007 Ford Expedition and Lincoln Navigator SUVs, going on sale in the fall. Sales of these nameplates dropped dramatically in 2005. High gasoline prices continue to pressure the SUV segment.


Redesigned F-250 and F-350 Super Duty pickups, probably going on sale in January 2007. These trucks will arrive around the same time General Motors and Toyota launch redesigned full-sized pickups.


New people movers for Ford and Lincoln, based on the Ford Fairlane concept shown at the 2005 Detroit auto show. Though the concept lacked sliding side doors, the three-row Fairlane clearly was developed as a minivan replacement. Suppliers have been told that the vehicles will debut in 2008.

New products

Ford Motor hopes these coming products will help stabilize its market share


Redesigned 2007 Ford Explorer Sport Trac, on sale this spring


2007 Ford Shelby Cobra GT500, on sale this summer


Redesigned 2007 Ford Expedition and Lincoln Navigator SUVs, on sale this fall


Redesigned F-250 and F-350 Super Duty pickups, probably on sale in January 2007


New people movers for Ford and Lincoln, probably on sale in 2008
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My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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