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Where Is Ford taking the Lincoln Motor Company?

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  • nvbankernvbanker Posts: 7,285
    I have 7 Fords, but still use my Lincoln dealer for service because I bought cars there for 16 years, and know them well. Ok, had one of my fleet Escapes in for a little um.....suspension work. I needed, a knuckle, control arm, strut, 2 front tires, a new spare tire, and the spare remounted under the car. Quite a bit of work, so I gave the service manager, whom I know well, a list.

    Car is ready in 4 days, excellent. Go to pick it up - The two new front tires are mounted with the white letters outside, so they don't match the rear ones. They purchased a new right front wheel that I did not need, because the wheel was in the back of the car - it just needed a new tire. Plus, they did nothing with the spare. I now have 2 wheels and a cut tire sitting in the luggage area, no spare, an extra wheel I don't need, and mismatched tires. Mind you, I KNOW these people. Did they offer to do anything about it? Anything at all? NO. I'm sure I can get it all fixed, but my point is, this ain't even close to my Lexus experience down the street.

    If I had the inclination to write about my last Lexus experience here, you would understand. The difference is incomprehensible.

    I'm not sure you can actually train the staff from these old "Mercury" stores to treat customers like a Lexus store, but I applaud their efforts to do so.
  • akirbyakirby Posts: 7,666
    I'm sure Ford wishes it could have started over 20 years ago with brand new dealerships and new franchise agreements. I've even joked they should kill the brand and come out with a totally new brand with exactly the same vehicles so they could do just that.

    If Lincoln can't provide a similar luxury dealership experience as Lexus then they will not succeed the way they want to succeed.

    The really strange thing is that we do not have a Lincoln Explorer or Cadillac Lambda. At this point that would make more sense than keeping the Navigator and Escalade.
  • gregg_vwgregg_vw Posts: 2,415
    Wolff made more than "small tweaks." He came in and said, thankfully, what were you guys thinking? Wolff DNA is evident in both the XTS and MKZ exteriors. Would that the MKS had some.
  • gregg_vwgregg_vw Posts: 2,415
    Agree on all points.

    However, Cadillac will have a Lambda, but they must assure that it is sufficiently different from the Buick, and getting several other models to market has had priority. The ATS almost requires that they re-do the CTS to lessen the overlap, so that is what they are doing. Then within their line of sedans, comes the larger than CTS rear drive sedan.

    They will re-do the Escalade next year, because with the GM pickup architecture being all-new at the same time, they can make weight reductions and fuel economy gains, along with other refinements. That market is no longer hot, but there will still be consumers who want the larger, more rugged machines with greater tow capacity (horse trailers, boats, etc.). The Escalade still sells in reasonable numbers. It's just not the hot thing it inexplicably was.

    Lincoln has the Audi Q5/Acura RDX rival coming, based on the Escape, but that leaves the MKX too close, within an inch or two in all dimensions of the others (and it is actually about half a foot shorter than the SRX). I suspect the Lincoln will be sized like the new Escape, which will render it smaller than its competition and the MKX--though interior space will be competitive. But will it take the rest of the bit of market the MKX has?
  • lemkolemko Posts: 15,120
    edited August 2012
    Sheesh! Who did your Ford dealer hire - the guys who got fired from Pep Boys and Jiffy Lube? Heck, my local mechanic down the block does an infinitely better job! I trust all my vehicles to him.
  • akirbyakirby Posts: 7,666
    Lambda is the perfect example of what is still wrong with GM. They killed one (Saturn Outlook) but have 3 left (Chevy, Buick and GMC) and now they're putting all that effort into coming up with another one for Cadillac. Just think of how much money GM could have saved by only having 2 - one for Chevy/Buick and one for Cadillac.
  • gregg_vwgregg_vw Posts: 2,415
    Hard to say. On the surface, that makes total sense. However, GM is unlikely to pick up all the Buick and GMC customers with Chevy and Cadillac. GMC customers are a different breed. Why they see that brand as special is somewhat of a mystery, but they do. And Buick needs that model. With Encore coming on board soon, that will still total only 5 Buick lines here. Buick helped save GM, what with its hot status in China. It will all shake out as it shakes out.
  • akirbyakirby Posts: 7,666
    My theory is GMC buyers only buy GMC because they can. If there was no GMC they'd be buying the Chevy versions since there is virtually no difference. They said Mercury buyers would go elsewhere when it was killed but it never happened.

    The new Buicks are fine but it forces the Chevys to be too cheap. GM still wants to be #1 and they think having more brands will help instead of looking at profitability. They're still doing some of the things that got them into trouble and I'm worried if we have another economic downturn they'll need another bailout.
  • gregg_vwgregg_vw Posts: 2,415
    GM is working to reduce their fiefdoms, and know they have to in order to survive. I don't know if another bailout would be in the cards. I doubt it.

    Meanwhile, you have to remember the different ways that Ford and GM brands were viewed. I think it was easy for Ford to absorb Mercury customers. With a couple of exceptions, Mercurys were never seen as anything other than fancier Fords, and Ford fostered that, especially in the past three decades. I never heard it said that Mercury owners would go elsewhere if Mercury was axed.

    Lincoln began slipping toward fancy Ford status in the same way as Mercury, once it was shut out of PAG, and left hanging by Bill Ford. Mercury needed re-invention, but there was no money to do it. Lincoln still needs re-invention. That is underway.

    Meanwhile, in their death throes, GM had to downsize in a hurry. Although they had the current VW plan of fielding more than a dozen brands (Chevrolet, Pontiac, Oldsmobile, Buick, Cadillac, Saturn, Hummer, GMC, Holden, Opel, Vauxhall, Daewoo, and SAAB, plus hookups with Isuzu, Suzuki and Subaru), they had no idea--unlike VW--how to differentiate and market--and justify--so many brands. Given how many GM brands have now gone away, they have almost downsized proportionally as many brands as Ford did (if you exclude the ones they severed partnerships with).

    Opel and Vauxhall remain moneypits that need to be fixed, but just like troubled European Ford, they still provide the rest of GM with designs used successfully elsewhere. GM axed Pontiac (GM's Mercury), Oldsmobile (almost complete overlap with Buick), Saturn (its time came and went), Hummer (ditto), Daewoo (who cares?), and SAAB (sob). :sick:

    However, GMC buyers, for whatever reason, have always seen GMCs as superior to Chevrolets and rarely cross-shop them. Ford had no such strong brand difference, real or imagined. Oldsmobuicks were also more distinct from Chevys than Mercurys from Fords, but GM did not need and could not sustain both brands.

    GM is still rebuilding, but all four remaining brands are doing well by comparison to where they were just a few years ago. All have new models coming out, and all have modernized their product lines. They are behind Ford in engine design, but they know it and are working on it.

    Will it be enough? No crystal ball here. All the US companies remain vulnerable to failure if they cannot renew their lines rapidly and consistently from hereon in. Europe has most of the uber-luxury market. Japanese and Korean companies have both shown the ability to turn on a dime faster when market tastes change, and to blanket the market with models for every niche, without causing themselves huge losses. American companies remain at a competitive disadvantage in some ways. That will have to be completely fixed or they will continue the decline as happened to the British industry.

    As I have said before, Ford and GM have taken different paths to recovery. Ford's course makes the most sense for Ford (especially since they chose not to take bailout money), given the value of Mercury and Lincoln had sunk to the point where both could have gone away, and not affected Ford's bottom line.

    Right now, Lincoln constitutes about 4% of American Ford sales. GMC/Buick/Cadillac currently constitute about 32% of American GM sales. With GM, Cadillac's decline was precipitous, but it never sunk to being perceived as merely a Chevrolet with lipstick. Buick continued to be a star in China throughout GM's implosion, and it attracted a different buyer set here than Chevrolet. And then there is that weird GMC cache that continued to exist, even if it made no sense to you or me.

    Finally, shuttering brands is expensive. Especially under circumstances when a brand is making money, employing people and sustaining suppliers, it is not an easy call to just axe it. However, GM can still downsize if times call for it. On the other hand, Ford has nothing left to rid itself of, since currently the Lincoln brand is irrelevant (I sincerely hope that changes).
  • akirbyakirby Posts: 7,666
    Ford is focused on profitability, not sales crowns. Reducing infrastructure costs puts you in a better position to withstand an economic downturn. Ford didn't lose any sales volume by closing Mercury, so now they're selling the same number of units as before but without all the overhead of another brand and another set of vehicles to design and manufacture. They also don't have to worry about holding back Ford to make Mercury distinctive.

    My point is GM could kill GMC and combine Chevy and Buick and have the same sales volume but with far less overhead. But that's not how GM thinks. They are scared of killing brands and want to be #1.

    I've worked on 8 and 9 figure corporate business cases. If you try hard enough you can come up with a business case to justify just about whatever you want to do, but that doesn't mean it's the best choice. The best example would be having 2 different systems that do the same thing. Individually each one can make a business case for keeping it. But if you look at it from a corporate standpoint and compare those 2 business cases with one where you only keep one, keeping one almost always wins out.

    Ford has one global leader who isn't afraid to make those higher level decisions. That's why Ford now has one Fiesta, one Focus and one Fusion worldwide not to mention Transit Connect and the new full sized Transit and C-Max.

    GM still operates individually with each brand making their own business cases and management allows them to do it. It's not wrong per se but it's definitely not the most efficient.

    I believe they also subsidized Cadillac with other brands which is a recipe for failure long term. Hopefully with the new products Cadillac can now pay their own way as Lincoln will be forced to do.
  • berriberri Posts: 4,141
    Nice analysis that makes some good points and comparisons between Ford and GM. I'm not sure how anyone is going to effectively resolve European problems right now because it is as much a government and union issue, as an economic and business strategy issue. Take Germany, the union has considerable power in the government there. BMW and MB do alright because they have a strong market of high profit vehicle segments around the globe. That is not the case for Opel. The Asians are using imports and even VW has increased imports from EU countries in eastern Europe. Opel is stuck with a lot of factories and fixed overhead the government and union won't let them shed easily impairing GM's ability to use facilities in say Russia and Poland. I think Germany still wants GM to sell out to a German, or European venture and that will make it even more difficult for GM to sort things out. Yet, that heavy government involvement there also makes it difficult for GM to sell out at a reasonable price. (Don't ask me to explain the Peugeot decision!) Ford has some similar issues, but is more heavily based in the UK which is more business friendly to outside country companies.

    As for GMC, the only segment where D3 still has strong market and pricing power is trucks, so GM needs to keep trucks in as many of its franchises as possible right now. I don't think dumping GMC is strategically smart right now while GM is rebuilding because it is profitable and a very positive cash flow contributor to both GM and its dealer network.

    Now Ford; While I respect their successful internal restructuring and business gamble, I don't think their decision to avoid a BK restructuring was quite as noble as some proclaim. I think the biggest reason behind it was to allow the Ford family to continue controlling the company with a small portion of the equity through their family super shares. Lincoln is getting close to sink or swim, and unfortunately I think Ford needs a strong luxury product to help enhance profit margins, particularly if gasoline prices down the road further erode truck profits. Otherwise, narrowing margins will constrict the company in the global market battles.

    The arguments about the cost of shuttering a brand are interesting and contradictory. Some claim it requires a significant upfront cost expenditure, but others say part of that is through illusory accounting. Another school of thought is that more brands give you more market channels to stuff and increase sales volume while the incremental cost of another brand is not all that expensive.

    Interesting stuff and it will be an interesting situation to follow while history develops.
  • gregg_vwgregg_vw Posts: 2,415
    My point is GM could kill GMC and combine Chevy and Buick and have the same sales volume but with far less overhead. That is where I disagree with you, Allen. I don't think GM could have the same sales volume by killing GMC and Buick. Too many of their customers see these brands as distinct (unlike Ford/Mercury, which in recent years we can all agree was a pretend distinction). When Ford went to the one brand model, Mercury and Lincoln sales amounted to diddly-squat. That was never true with GM premium brands. If forced to go elsewhere, many of Buick and GMC customers would migrate to some of the many, many other brand choices available today (including Ford), rather than go over to Chevrolet.

    Ford and GM are not and have not been the same type of conglomerations. Furthermore, there are many different business plans that would have worked (or not worked) for either Ford or GM. There is not one that clearly the best for all, no matter what.

    You chart the course and you try to navigate it. Every situation has its drawbacks. You are focusing on the benefits of all eggs in one basket, not any of the possible drawbacks.
  • gregg_vwgregg_vw Posts: 2,415
    Back at ya...nice analysis as well. Appreciated your comments about what shuttering a brand may mean. Certainly some of the suppliers of specific Mercury trim, for example, picked up some Ford jobs, rather than going out of business.

    Nice reminder as well that sales volume is good, as long as it is not engendered by giving away the store to chase sales figures. It looks like GM, Ford and Chrysler have all curtailed that crazy behavior quite a bit, compared to 2008 and before.
  • akirbyakirby Posts: 7,666
    Pontiac, Oldsmobile and Saturn fans said the same thing.

    If somebody likes a Buick Regal or GMC pickup are you honestly suggesting that they would NOT buy the exact same vehicle with a Chevy badge on it?

    I'm not suggesting they kill the vehicles - just rebrand them.

    You don't think people cross shop GMC and Chevy pickups and let the dealers bid against each other? That's the same thing that happened with Chevy and Pontiac dealers with the Camaro and Firebird.

    Can they make it work? Sure. But you'll never convince me it's the best business plan.
  • gregg_vwgregg_vw Posts: 2,415
    I don't have to convince you of anything, Allen. You don't get what I am saying and you don't want to. Fine.

    The Pontiac brand was ruined long before its demise, Saturn had few fans left, and GM gave up on revamping Oldsmobile midstream. I don't think any remaining Pontiac or Saturn buyers had significant objections to buying a Chevrolet. Ergo, no more reason for those brands and that's why they were axed. Olds was subsumed by Buick, although very clumsily at first. And Buick as I have said over and over to your deaf ears was the main star in GMs crown in China...a big star. Ford had nothing like that going on.

    GM chose a business plan that your confirmation bias will not let you consider as a reasonable decision for them. No, they would have been better off taking Ford's path. You cannot know that, but it doesn't matter anyway. Time will tell, as it always does.
  • akirbyakirby Posts: 7,666
    This has nothing to do with Ford and what they did or didn't do.

    You're rationalizing GM's business decisions. Killing Pontiac and Oldsmobile and Saturn was ok but killing Buick isn't. GMC has some supernatural appeal that the same exact truck with a Chevy badge doesn't. Yeah, right.
  • gregg_vwgregg_vw Posts: 2,415
    edited August 2012
    I try to take a balanced view of things. You don't. With you it has to be one approach is right and one is wrong. You refuse to consider that different companies may have been perceived differently by consumers, whether or not those perceptions were completely rational.

    Re-read my last several posts. I try to find what may be similarities and differences among companies and brands. I often say that the jury is still out. I try to be thoughtful, even if I don't always succeed.

    I am rationalizing GM's business decisions? Well, of course I am! We are also rationalizing Ford's business decisions. You are rationalizing Ford's decisions. That is the best we can do, because neither you nor I know all that went into making some extremely difficult decisions for Ford, Chrysler and GM.

    It is possible that all three companies' current business plans are reasonable and flawed. I think there is always a danger of overestimating desirable qualities, and underestimating undesirable qualities of anything we currently favor.

    So let me repeat, every situation has its drawbacks, as well as advantages. In order to reduce bias and improve critical thinking, it helps to keep in mind that when you choose something, you also choose to give up something else. If Ford's way is sound for them, and IMHO I think it is, then it need not be defended by attacking another decision by a completely different company and culture.

    I don't think it is likely that all three companies will survive long-term. I have no idea which one or ones will fail, but I do know from history that attrition of American companies and brands appears to be the trend here. But that is beside the point, if there is one. :P

    Perhaps we ought to get back to discussing where Ford is taking Lincoln, and Lincoln's product line-up and sales, compared to the competition. I am done commenting on your insistence that GM's business plan should have included killing Buick and GMC. Frankly, as Rhett said, I don't give a damn, but some errant brain cells apparently thought I did. :blush:
  • akirbyakirby Posts: 7,666
    I don't know why you keep saying it's a Ford thing. I've always maintained that you only need 2 brands - one that covers the lower end at high volumes - $15K - $45K or so and another one to server the higher end - $35K - $75K and higher. That applies to any mfr.

    There isn't much to talk about for Lincoln until the MKZ arrives.
  • gregg_vwgregg_vw Posts: 2,415
    Yes, I know you have always maintained that. But it is simply not the best way or only way for every manufacturer or every situation. There are always several ways to go, and each way has advantages and disadvantages. You don't get that. I get that.
  • akirbyakirby Posts: 7,666
    You're right - it's just me. Never mind Ford/Lincoln, Honda/Acura, Toyota/Lexus, Nissan/Infiniti, Dodge/Chrysler and VW/Audi. Toyota tried it with Scion but that hasn't really worked. Nobody else is even attempting it outside of small volume niche brands.

    So when's that new MKZ gonna show up?
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