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Alan Mulally Retirement Plans - Good or Bad for Ford?

hpmctorquehpmctorque Posts: 4,228
Okay, it's too early to evaluate Ford's new CEO, but given Ford's importance in the automotive industry, and the huge challenge Mullaly faces, I thought it would be a good idea to open a topic to discuss how he's doing. I'm sure there are many Edmunds readers who, like me, wish him much success.
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Comments

  • euphoniumeuphonium Great Northwest, West of the Cascades.Posts: 3,333
    As a player in the market, I see where Ford's stock is still diving, but IMO ARM is the best out there to be effective for the future.
  • hpmctorquehpmctorque Posts: 4,228
    It looks as though investors who wish to speculate on Ford's tunraround are buying the bonds and prefered stock.
  • hpmctorquehpmctorque Posts: 4,228
    "F7.18, +0.15, +2.1%) was upgraded to overweight from equal weight at Morgan Stanley, which cited ample liquidity as well as a greater sense of urgency by the automaker's management to engineer a turnaround."
  • hpmctorquehpmctorque Posts: 4,228
    Today's WSJ features an interesting front page article entitled "Inside Mulally's 'War Room': A Radical Overhaul of Ford."
  • grbeckgrbeck Posts: 2,361
    That article was an interesting read. My main concern is whether the market will give him enough time to make the changes necessary to permanently redirect Ford. While Ford is taking a different path than GM, it still took GM over a decade to revamp its plants, align global platforms and streamline its vehicle development processes. And it STILL isn't out of the woods.

    Ford does NOT have a decade to get this done.

    One interesting paragraph noted that in the past, when Ford hit a crisis, it started to make the changes now being pushed by Mulally, but a hugely successful model (F-150, original Taurus and Explorer) removed the urgency. The success was welcomed, but it encouraged Ford to return to "business as usual."

    The article also hinted at the need to drop brands, but it only mentioned a possible sale of Jaguar, Land Rover and Aston Martin. It did say that a big test would be what Ford does with Volvo. I hope that Ford doesn't sell it, because much of what is good about the Five Hundred and Freestyle came from the Volvo DNA. This is a connection worth exploiting. There was no mention of jettisoning Mercury.

    In the past, when Ford had its back up against the wall, it came up with a winner - the Model A, the 1949 model, the Taurus, the Explorer - in the nick of time.

    In today's crowded and brutally competitive market, it is a lot harder for any company to come up with a big hit, let alone one that can save the company. Ford needs to fix its vehicle development processes, streamline its brands, get costs under control and leverage its global resources.

    Oh, and change its corporate culture to facilitate these moves.

    Mr. Mulally, I want you to succeed, but you'll be needing all the luck you can get...
  • hpmctorquehpmctorque Posts: 4,228
    Well said, grbeck. I'm thinking that any plan to shut down Mercury may hinge on how well the current marketing effort, appealing to women, works, and perhaps plans to import some European Fords as rebadged Mercurys.
  • hpmctorquehpmctorque Posts: 4,228
    ...change the spelling in the title to Mulally from Mullaly (incorrect). Sorry.

    Thanks.
  • hpmctorquehpmctorque Posts: 4,228
    On Friday Mulally said that Ford is moving faster than expected on its plan to shrink U.S. capacity to better match market demand. He also committed to strengthen the company's products on an annual basis, which is similar to Toyota's practice.

    Of course, the real test of Ford's turnaround will be in how its new products are received in the marketplace, since the company can't shrink itself into prosperity.
  • carguy58carguy58 Posts: 2,303
    how he;s going to do. Give him a few years.
  • hpmctorquehpmctorque Posts: 4,228
    His very recent comments about seriously considering importing European Ford models, possibly badged as Mercurys, seems to have merit. It could bring badly needed new products to the Lincoln-Mercury showrooms in '08, at relatively low cost.
  • GM tried to import the Opel with Saturn and Pontiac. Now they are finally bringing in a real Opel batched vehicle, GT. So while Ford is still sitting around thinking seriously in bringing the Euro's models, GM will start grabbing back market shares and Toyota will dwell on how to make better cars with lower cost to further boost profitabiliy. Result, the Japanese will continue to have more money to spend to bring out even more attractive vehicles.
  • scape2scape2 Posts: 4,119
    it is going to take at least 3-5 years to see Ford turn it around into profitability. Its going to be painfull and a loss of thousands of U.S. jobs. What pains me as I read other forums on the internet, is those Americans who would love to see the downfall of Ford Motor Company. I see this company as a part of American history. Once its gone, its gone forever. Honda/Toyota are in no-way American companies. Their PR compaigns have worked, its very evident. :sick:
  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    I wouldn't classify myself as a diehard Ford fan but it is an american icon. It was the first major american automobile corporation and if Ford dies so does everything great about the company. :cry:

    Rocky
  • Henry Ford's passion is not seen here with the company for the past 20 years or so and that is why it lost to the Japanese and it is always extremely difficult for one to regain reputation and hope Ford can learn from that. Better do something right to preserve this America icon. Meanwhile, lets see what we play out of the symbol: F

    For info of Henry Ford: http://www.hfmgv.org/exhibits/hf/
  • carguy58carguy58 Posts: 2,303
    "What pains me as I read other forums on the internet, is those Americans who would love to see the downfall of Ford Motor Company. I see this company as a part of American history. Once its gone, its gone forever. Honda/Toyota are in no-way American companies. Their PR compaigns have worked, its very evident."

    As a import fan(Honda and Mazda guy) I don;t look at what I'm buying as foreign or American its just what I like to buy. Lets admit it besides Chrysler in the 90's Ford and GM just put any product out there and expected Americans to buy it no matter what it was.

    As far as PR campaigns people have had good luck with Toyota's and Honda's. I'm in no way a Toyota fan(but I respect what they have done) because their product like Ford and GM's in the 90's doesnt strike a chord with me right now. I think the "Buy American" and being partriotic is very 80's/early 90's. Its a free market and GM does sell cars outside the US just like Honda and Toyota sell cars here.

    I do want Ford and GM to survive yeah but that doesn't mean I have to buy from them if they don;t have the product I want.
  • explorerx4explorerx4 Central CTPosts: 9,830
    i agree with 'scape. too bad more people don't visit the henry ford museum/greenfield village. there is a real effort to preserve history and make it available for people to experience.
    personally, i have never had anything really bad happen with the fords i have owned. my wife had a celica that was a pain, and it was not an enjoyable car to drive. that was many years ago, but i decided something that i can enjoy every day is worth more to me that something i don't enjoy, although the resale is better.
  • hpmctorquehpmctorque Posts: 4,228
    Mulally supported the revival of the Taurus name, and, consequently, that name will be applied to the redesigned Five Hundred. The immediate reaction has been mixed. Those who say it's a good idea cite the fact that Taurus is a household name, and is associated with many successful years for Ford. Others argue that Taurus had become a tarnished name, as the popularity of the Taurus declined from being #1 in sales to a heavily discounted car for rental companies and fleets. So, is the revival of the Taurus name a brilliant stroke or a bad idea? I think it's not a very good idea, in part because the Fusion is more the spiritual successor to the Taurus than the Five Hundred, but also because Taurus no longer enjoys the positive image that Camry and Accord do.
  • john_324john_324 Posts: 974
    I like it.

    I think while it's true that the Fusion is more the spiritual successor than the Five Hundred, Taurus *was* always the mid-sized family sedan, which due to cars' getting big again is now about at Five Hundred-size. I remember how big the Toyota Avalon seemed when it first came out...now the Camry is the same size.

    The biggest problem with the Five Hundred IMO was its lack of power, which I understand Ford is going to address with the 3.5l V6. The hopefully less conservative styling will be a big help too (but for godssake don't repeat the previous 3rd-gen styling atrocities...)

    Next steps: keep the Taurus name on it for awhile, but continue to refine/improve it as the years go on. Don't dump it in rental fleets, and don't start "de-contenting" it. After a year or two, reintroduce an SHO version with Ford's great 4.6l V8 coupled with the already available AWD system as a forward-looking version of the American muscle-sedan.

    The Five Hundred IMO isn't a bad car, and there's a lot of potential in it..when it first came out, I remember seeing it displayed at the Washington auto show. I was amazed at the amount of people crowded around a (to me) sedate sedan. The crowd was only slightly smaller than that at the Mustang display. :surprise: Sure, the Mustang crowd was younger, but middle-aged buyers are the ones with the cash to actually buy the new cars they see at shows...
  • hpmctorquehpmctorque Posts: 4,228
    I'm encouraged by Mulally's early moves, and I consider the adoption of the Taurus name for the Five Hundred to be a relatively minor issue.

    I consider the Fusion to be a direct competitor to the Camry, and the Five Hundred/Taurus to be Ford's counterpart to the Avalon. Regardless, there are precedents in the industry for applying old names to new cars that differed in size and positioning from the originals that carried the name. For example, Zephyr was a Lincoln, then a Mercury, then a Lincoln again, before Ford discontinued the name this year. The main thing will be whether the Taurus will be competitive in the marketplace, and I'm confident it will be.
  • dtownfbdtownfb Posts: 2,915
    Using the Taurus name on this minor re-design of the 500 is a mistake in my book. Save it for the next major re-design of the 500. The Taurus name is still out there..in rental and used car lots.

    Ford screwed up the 500 by not offering a bigger engine at the initial launch. Yes I know they were locked into that engine because of previous contracts but talk about messing up an otherwise good car.

    It's not on anyone's radar screen anymore. With as competitive as the automotive market is, you only get one chance to make a first impression.
  • Next steps: keep the Taurus name on it for awhile, but continue to refine/improve it as the years go on. Don't dump it in rental fleets, and don't start "de-contenting" it. After a year or two, reintroduce an SHO version with Ford's great 4.6l V8 coupled with the already available AWD system as a forward-looking version of the American muscle-sedan.

    Err replace that 4.6 V8 with the yamaha V8 from the XC90 and new S80.

    Much much better engine then the 4.6.
  • explorerx4explorerx4 Central CTPosts: 9,830
    i think it would be better to put in the 4.6 for a few reasons. the upscale divisions need to maintain their exclusivity(yami 4.4). years ago, ford already had the 'intech' 4.6 in fwd lincolns. they should have spent their money on a 5 or 6 speed transmisson that could handle that power. they didn't need to change the engine at all.
    even a 3 valve 4.6 which shows less power than the yami, would be a great option, if they had a transmission that could handle it.
  • john_324john_324 Posts: 974
    I was thinking the T-3650 manual would be a nice transmission for the 4.6l...but alas, I suppose those days for the SHO are over... :cry:
  • hpmctorquehpmctorque Posts: 4,228
    The Montego, the Mercury version of the Five Hundred, will be renamed Sable.

    If the criteria for resurrecting names include models that sold a lot of copies, and were popular during better times for Ford, then Pinto and Maverick would qualify. One could argue that the Maverick was competitive in its day, and if it hadn't been for the gas tank hazard, the Pinto was reasonably competitive too. I suppose this says more about how bad the economy cars of the late '60s-early '80s were than their attributes(?!) of the Pinto and Maverick. In terms of better times at Ford, the company was in bad shape during the end of the Pinto's days, the early '80s.
  • john_324john_324 Posts: 974
    Bring back the Ranchero!

    :surprise:
  • bruce6bruce6 Posts: 29
    Well said, hpmctorque. Reviving the Taurus name WOULD make sense if and when they could put the name on a car worthy of it -- i.e. a truly innovative, state-of-the-art sedan comparable to the original Taurus. Affixing it to a half-hearted update of a failing model is simply trashing a once-great name even further.

    That said, at least Mullaly realizes how utterly boneheaded many of Ford's moves over the last ten years or so have been. The idea of having all Fords start with F and Mercurys with an M was just silly. As was launching the 500/Montego with a way-too-weak engine. As was the Freestar, which torched a once-solid minivan business. And does anyone remember the Lincoln Blackwood? Had the dollars poured into that rat-hole been used to create a product someone might want to buy -- say, maybe, updating the long-neglected Ranger, once easily the top-selling small pickup -- Ford might not be teetering on the brink of disaster today.

    Mullaly has a huge mess to clean up. Not all of his ideas are great, but at least he recognizes that things have got to change.
  • hpmctorquehpmctorque Posts: 4,228
    While Ford is in the earliest stages of a turnaround that will take years, the first six months of Mulally's leadership are encouraging. He's secured financing to buy time, set targets, taken steps to improve accountability and reduce bureaucracy, and given many Ford employees hope.

    While it's unrelated to Mulally's leadership, the downsizing of Chrysler, which will result from its sale, will help Ford and GM somewhat, by reducing industry overcapacity.
  • grbeckgrbeck Posts: 2,361
    I just saw photos of the all-new Ford Flex (which was unveiled today at the New York Auto Show), and I think Mr. Mulally's job just got a little easier. That vehicle looks great! (Although I realize that he had nothing to do with its development.)

    Ford needs to:

    1. Keep improving the Fusion, Five Hundred/Taurus, Freestyle/TaurusX, Mustang, Edge and F-150, as they are basically sound vehicles;
    2. Get the European Focus here as fast as possible, as people are more interested in small cars, and a subcompact that is a cut above the usual fare would probably sell pretty well;
    3. Develop more vehicles like the Flex;
    4. Find a way to euthanize Mercury and focus on Ford and Lincoln.

    And I agree that a Chrysler downsizing would help Ford and GM, as there is a core of buyers who will only purchase domestic vehicles (and most still consider Chrysler and Dodge to be domestic marques).

    They would most likely turn to GM and Ford if Chrysler were to reduce capacity, or vanish entirely.
  • explorerx4explorerx4 Central CTPosts: 9,830
    while i was sitting here at the computer a few hours ago, i heard a sound the made me look out the window to see what it was.
    my neighbor across the street came home with his new mustang gt convertible.
    next time i see him, i am going to give him a big 'man hug', for a couple of reasons. he bought a mustang gt, and it is a domestic vehicle. :)
    maybe he bought alan a couple of more seconds to get the job done. ;)
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