Big Shift Coming For Ford
Ford is in the midst of a seismic shift when it comes to changing its production priorities. More like a “continental shift” as the company plans to build six of its smaller European models at factories in North America to serve the domestic market.
Billions Lost In Q2 2008
Last week, Ford reported a stunning $8.7 billion loss for the second quarter, much worse than what analysts had predicted. Most of the loss is from US operations which are getting hammered by a big drop in sales, particularly for the company’s big pick up trucks and SUVs.
In addition to building six European models on the other side of the pond, the company is shifting production at several of its SUV and truck plants to smaller cars, increasing production of EcoBoost powerplants and four cylinder engines, and boosting hybrid production.
“We continue to take fast and decisive action implementing our plan and responding to the rapidly changing business environment,” said Ford President and CEO Alan Mulally. “Ford is moving aggressively using our global product strengths to introduce additional smaller vehicles in North America and to provide outstanding fuel economy with every new product.”
The Fuel Efficient Fusion
Ford has also promised to make the next generation Fusion, due out in 2010, as the most fuel efficient vehicle in its class. Lighter materials and the use of six-speed automatic transmissions paired with small, but powerful engines are behind this move, a trend that is likely to spread to its other model lines. Though Ford hasn’t made it official, it is quite possible that the Ford F-150 could offer a supercharged four cylinder in the near future.
“We are transforming Ford’s North American manufacturing operations into a lean, flexible system that is fully competitive with the best in the business,” said Mark Fields, Ford president of The Americas. “We remain committed to matching our capacity with real consumer demand, and we are equipping nearly all of our assembly plants with flexible body shops, ensuring we can respond quickly to changing consumer tastes.
Mercury Wins Reprieve
One of the beneficiaries of Ford’s shifting priorities will be Mercury which is expected to get its own small car instead of sharing a model with Ford. Ford is planning to “repurpose” the brand, perhaps making Mercury its small car brand. This is a big shift for Mercury which as one time competed in the near-luxury segment with Buick.
The Ford, Lincoln, Mercury line will be almost completely upgraded by the end of 2010, including:
- 2009 Ford F-150, on sale in late fall with the most capability, most choice and most smart features of any full-size pickup, and with more than a 7 percent fuel economy improvement.
- 2010 Ford Fusion, Mercury Milan, Lincoln MKZ sedans, on sale in early 2009, with Fusion’s and Milan’s four-cylinder fuel economy expected to top Honda Accord and Toyota Camry.
- 2010 Ford Fusion Hybrid and Mercury Milan Hybrid, beginning production late this year and on sale in early 2009 – with fuel economy expected to top the Toyota Camry hybrid.
- New Ford Mustang – coupe, convertible, and glass-roof models – in early 2009.
- New Ford Taurus sedan – with EcoBoost engine and even more advanced safety and convenience technologies – in mid-2009.
- New European Transit Connect small multi-purpose van in mid-2009.
- New Lincoln seven-passenger crossover – with EcoBoost engine – in mid-2009.
- New European Ford Fiesta, in both four- and five-door versions, in early 2010.
- New European Ford Focus, in both four- and five-door versions, in 2010.
- New Mercury small car in 2010.
- New European small vehicle that will be a “whitespace” entry in North America in 2010.
- Next-generation Ford Explorer – with unibody construction, EcoBoost, six-speed, weight savings and improved aerodynamics for up to 25 percent better fuel economy – in 2010.
Significantly, Ford plans to double its small engine capacity, building more than one million four cylinder engines annually by 2011.
If Ford manages to pull of the shift of its business, then the company will be offering products much more aligned to current consumer demand.
(Source: Ford Motor Company)