I had the good fortune to see some of Ford’s product lineup starting with the Fusion and the all new LIncoln. There are some very impressive vehicles in their pipeline. Although I’m lovin’ my Taurus SHO, I am so excited about the 2013 Lincoln MKS, I already requested one.
You should, at least, check out the 2013 Fusion as it’s a pretty good sign of what’s to come — styling, features, fuel economy; it has it all.
It proves once again that sticking to your plan works in the long run.
If your experience even comes close to mine, the new Taurus SHO ( just hitting the streets) will meet or exceed your expectations in every regard. The ride and handling make you feel at “one with the road,” the seating is by far the most comfortable of any car I’ve ever driven, the powertrain adapts to any given situation, the interior reminds me of an airplane cockpit yet everything is accessible and easy to use, the technology is leading edge, and so on.
There is a lot more, but the best part is that here is a car you can ride in, or you can choose to drive it. The choice is yours, but either way it is exciting and it is fun!
I recently had the opportunity to meet with Alan Mulally, the President and CEO of Ford Motor Company. I walked away from that meeting feeling exhilarated. He is focused, he has a vision and he has a team committed to the plan to achieve that vision.
With Alan Mulally in the driver’s seat, it should be quite a ride! I believe the Ford team is going to meet or exceed the expectations of its customers, its employees, its shareholders and its competitors by staying on plan and achieving its vision.
The US Government owns 61% of GM. Now they control GM and all of the auto industry regulations.
Do you think free market demand will determine future products, or will someone in the capitol dictate what we will be driving?
Back in the 1960’s and early 1970’s, the domestic North American automotive industry was focused strictly on getting the product into the showrooms. During this period, the challenge was producing enough of the right product and getting it into the customers’ hands. Price was not an issue and foreign competition was virtually non-existent. Circumstances certainly have changed radically since then!
In the late 1970’s and early 1980’s, consumers demanded quality, quality, and more quality! This change in customer expectations resulted primarily from Japanese entry into the North American market. The Japanese auto manufacturers’ increase in market share also gained momentum from the first oil crisis in the US during the early 1970’s. The facts are that the Japanese had the right size vehicles with better fuel economy than their US counterparts, and they were convinced that continuous improvement in quality, as advocated by Dr.W. Edward Demings, was fundamental to growing their export base.
Dr. Demings is widely recognized as the “father of the Japanese post-war industrial revolution.” He taught that adopting the right management principles would enable companies to increase quality while reducing costs. Unfortunately, it took years before the US auto manufacturers began to inculcate his teachings.
During the 1990’s, worldwide demand for vehicles continued to grow as did the number of vehicle manufacturers. In addition, there was significant proliferation in the number of vehicle models available in the marketplace, with even more to come. By 2005, the industry had grown to the point where, on a worldwide basis, there were over twenty five million units of excess capacity. Four million units of that excess capacity existed right here in the US.
In a free market environment, excess capacity only results in intensified competition for the “next sale.” To keep their plants running, the US automotive manufacturers incurred incremental marketing expense through a variety of incentive programs. The net result was higher costs and lower profits due to incentive programs such as rebates and zero interest based payment plans.
In addition, many other factors put even greater pressure on the domestic automotive manufacturers’ ability to stay profitable. New environmental pressures for increased safety features, more rigid emissions standards, and improved fuel economy resulted in increased vehicle costs, most of which the manufacturers have not been able to pass on to the customer.
In summary, market forces dictating the need for improved product content and technology, increased competition and changing customer wants and expectations added even more cost for the vehicle manufacturers. At the same time, decreased consumer brand loyalty coupled with an overall decline in market demand put downward pressure on pricing. Finally, increased fuel costs shifted consumer demand away from the more profitable vehicle lines –SUV’s and light trucks – to smaller, more fuel efficient cars.
The net result was continuing profit deterioration for the automotive manufacturers only some of which could be passed on to their suppliers. By not being able to address these challenges on a timely basis, Chrysler and GM had to go to the government for “bailout” funds, at a significant cost to us, the taxpayers. Now the government owns sixty per cent of GM, and we, the taxpayers who provided the funds, didn’t even get to vote on it!
The government also fired and replaced the head of GM and dealerships that were about to be closed are being rescued by members of the House of Representatives.
What’s the next challenge facing the industry? My prediction is that the government will determine what vehicles we need, and which ones can be built by GM. Who knows, maybe there will be new regulations for the entire industry that will dictate what we’ll be driving in the future!
Is this still a free market economy or has the concept of free enterprise seen its heyday?
On July 22nd, in an article entitled “Ford on Pace for Turnaround”, Forbes reporter Joann Muller stated that “Ford Motor has done a good job of keeping its eyes on the road during a difficult stretch, as its domestic rivals veered off into bankruptcy.” The question is, how Ford was able to stay on track while its domestic competitors had to use our taxpayer dollars to stay in business?
My response is fairly simple. Ford has a vision, they have an effective business plan to support that vision and they are implementing strategies to get there. It really gets back to the fundamentals that are the foundation of any good business as taught in “Business 101” in all business schools around the country. In fact, it wouldn’t surprise me to see a case study evolve rather quickly as a teaching aid to those interested in our free enterprise system.
My conclusions about Ford are based basic business principles. I am convinced that Ford has refocused on its core competencies. Their strategic plan embodies the following characteristics among others:
To support these conclusions, I would ask you to consider the following reported data:
I say that these accomplishments are attributable to Ford’s refocusing on the basic business principles of introducing fresh and innovative new products that focus on customer wants and needs while improving quality. At he same time, cost and debt reduction actions were implemented to further strengthen their financial position.
I don’t think there’s really anything new other than Ford’s “focus.” So, tell me again why we had to spend our tax dollars to bail out the others?
In contrast to GM & Chrysler, at some point Ford decided to concentrate on its core business. They have improved product quality and brought out a stream of new products with enhanced product content. Ford sold Aston Martin, Jaguar and Land Rover, and divested of some parts operations. Looks like the capital generated has helped Ford remain the only US owned auto company that hasn’t had to go to the government for “bailout” money. That’s good for Ford, its shareholders and us, the taxpayers!
Here’s a better idea for the automotive bailout funds. The government should have allocated an amount for each of the US auto companies and paid rebates to US citizens purchasing a vehicle made in the US instead of giving the money directly to GM & Chrysler.
Think of it – – -you buy a vehicle made in the US by a US company and the buyer gets a $10,000 rebate. The US companies build more vehicles and keep people employed. Lower unemployment rates and less benefits paid by the government (i.e. the taxpayers). More people paid for working, and more payroll taxes paid to the government. Probably fewer imported vehicles purchased with reduced trade imbalance. Cost to the taxpayers — LESS! How come we don’t elected officials making logical decisions?
Ford recently announced a plan to reduce its supplier base by about 50% by the end of 2009. If I were consulting for the supply base, I’d be preaching the formation of alliances to save as many jobs as possible while at the same time strengthening the supply base.
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