Ford Vision

Ford is the Premiere North American Automaker

To say these words almost sounds like shock for many who have followed American and World automotive car business.  However, the simple fact that both GM and Chrysler are at the financial edge and recognize cash flow failure and bankruptcy are real possibilities absolutely moves both companies to a file folder with the title of “Reorganize Business Model”.

Automotive history texts will likely say that Ford Motor Company recognized that its Business Model did not work for the 21st Centry in 2004 and that if effective change was not implemented then Ford was going to fail.  Harsh reality for a company incorporated in 1903 but absolutely true based on money in and money out.

History researchers will also say that Ford arrived at the Business Model financial evaluation because the company was successful with F Series Pick-up, originally introduced in 1953, and the Explorer introduced in 1991.   America’s Best Selling Truck has been part of the marketing campaign and from time-to-time the best selling vehicle in the United States and Canada.  America’s Best Selling SUVwent to the Explorer which utilized a smaller truck based platform to provide a larger replacement to the classic station wagon.  SUV’s were just what the market wanted in the 1990’s.  Truck and SUV fuel mileage and safety issues were simply not on the public radar at this time.

Pinnacle Recognition – We Are A Truck Company

Pinnacle for Ford trucks and SUV’s came in the late 1990’s with the Lincoln Navigator that pushed the Michigan Truck Plant to the #1 position of the most profitable and economically most important automobile factory in North America.  Economics associated with the Michigan Truck Plant had a measurable effect approaching 1% of the Gross Domestic Product of the US.

By 2002 the SUV craze was receeding from the high water mark of the late 1990’s.  Keith Bradsher wrote High and MightySUV’s: the world’s most dangerous vehicles and how they got that way which only added recognition to the reality associated with hazards of a truck chassis used for family transportation.

In 2001 William Clay Ford became CEO and soon recognized he had a problem because we are a truck company,that fact and the vehicle purchase/consumption dynamic was going to doom the company.   Ford efforts to deal with this revelation involved an evolution through two restructuring plans reflecting Ford’s 25% decline in US automotive market share since the mid 1990’s.  On September 5, 2006 Mr. Ford recognized he needed executive help and brought in Alan Mulally from Boeing as CEO and President.  Mr. Mulally has become the public communicator for Ford and history will record his involvement with the media, finance, and Washington politics.

Restructuring Plans Lead to Success

Ford’s restructuring plans dating from 2002 have been seen as brutal because of actions to cut staff, commitments required to secure funding, and product reinvention to provide vehicles that the public wants to purchase.  In early 2009 auto sales are at an annual rate of about 10 million units but from 2000-2006 the rate was 17-18 million.  Ford was fortunate to recognize that the company was in trouble and proactively address the problem.  GM’s Board of Directors received similar input from Director Jerry York in 2006 but his words fell on deaf ears.  GM’s CEO Rick Wagoner since 2000 also had no vision of an impending crisis or any urgency whatsoever, as was evident in his remarks at the GM Annual Meeting I attended in 2006 in Wilmington, DE.

Today Ford has good product in the market, good product coming to market, excellent product quality, financial stability better than its peers, and an attitude of success.  Automotive insiders know that success in the car business is: Product Product Product.  Manufacturers must have product that the customer wants to purchase.  Key new Ford Products at their dealers include the 2010 Taurus an absolutely contemporary sedan and the 2010 F150 which received the Truck of The Year award in January.  After current Product is the Next Product coming to market and Ford has a blockbuster arriving this spring in the form of the new 2010 Fusion Hybrid that gets 40+ miles per gallon.

Ford is implementing its success plan effectively in the most challenging of economic times.  Ford is the premiere North American Automaker.