Posted on Wednesday 23 April 2008
As Ford’s market share in the U.S. continues to dwindle – dropping to a new low of 13% this month – its CEO Alan Mulally is looking at further ways to cut costs and right now it appears nothing is sacred. Some of the measures Ford has already confirmed will take place as part of its ongoing turnaround plan is the reduction of more jobs in North America, the idling of more plants, and the axing of some model lines. However, despite several official denials, new reports claim Ford may also sell Volvo and possibly drop Mercury altogether.
During an interview with the Wall Street Journal, Mulally revealed there were several other options to reduce costs that Ford had not yet employed. When asked about the sale of Volvo, Mulally wasn’t willing to comment but an inside source told reporters the Blue Oval CEO is seriously considering selling Volvo and discontinuing the Mercury line.
Such a move would leave Ford with just two brands, Ford and Lincoln, plus a controlling stake in Mazda.
Since joining Ford back in 2006, Mulally has managed to turnaround a loss of more than $12 billion during the worst auto-sales downturn in more than a decade, establish a new global design team, and restructure the organization to focus on its core businesses, which has already seen the quality of Ford products improve to industry-best levels.
I generally like what Alan Mulally is doing, but –cliche alert– you can’t cut your way to prosperity. Ford needs to continue to do what it’s just started to do: unify the global product lineup, inject pizzazz into product design, amp up the quality — ONLY do it faster and publicize it better. At some point Ford has simply got to sell more cars and trucks.
I wish Ford hadn’t sold either Jaguar/Land Rover or Aston Martin, but what’s done is done. Instead of entry-luxury, perhaps Volvo should be thought of as a northen European version of Mazda — aka build highly entertaining (and safe) cars that strongly reflect Scandinavian design sensibilities. Forget thoughts of competing with BMW, Mercedes or Audi; think Volkswagen instead. And price the product accordingly (the weak dollar allowing).
I dont think dropping Mercury is necessary - they just need to give it a definitive brand identity away from Ford/Lincoln.
guys, i like both comments 100%.
dropping volvo is a death sentence. the 3 billion you MIGHT get for volvo wouldnt be worth it. the C1 platform is so great because its 1/3 volvo, 1/3 mazda, and 1/3 ford. each company invested the same amount of engineers to the team. the key to success is MAKING THE DECISIONS… fords been coasting for the last 10 years. the first focus was the last great thing that ford saw on this side of the planet. they just need to keep working towards the global architecture.
mercury isn’t dead. they’ve ALWAYS been a high trim line of ford offerings. the problem is they arent offering high enough trim. mercury should be what lincoln is today. ford platforms, ford bodies, but really nice interiors, really nice design. lincoln should be the testing bed for EVERYTHING in the ford brand. right now, ford eu and mazda get the platforms first. lincoln should get them first. offer low volume of high quality cutting edge mechanics. offer nice trim like you are now. that way you can move lincolns globally. euorpeans will buy lincolns cause they ARENT just volvo rebadges. and you might even be able to sell a lincoln to some one in japan. then just trickle those mechanicals down through the other brands. you ramp up production of those platforms in ford and mazda plants… maybe sacrificing quality a little because of your high production speeds, and there you go. the design is payed off through the high profits from an inflated lincoln brand. people will buy the lincolns cause thats the best there is…. its easy as pie really.
IMO Ford should drop Mercury and Keep Volvo sharing the strong safety platforms where possible and using the saved R&D dollars to make more fuel efficient and green engines.
Take Lincoln to a whole new level by re-accessing where it is the market place - focus on younger buyers like Cadillac has done, refresh the designs bringing many of the hot designs its put on the auto show circuit as concepts to market. Volvo needs more fresh designs - its sedan offerings are far too conservative and the finishes are poor. Their target younger/older females + families - cater to these decision makers- btw…the C30 is a good attempt - for that market but they shouldn’t expect to bring men into the fold - they lost us when the C70 coupe lost its place.