Consumer Spending: Ford Cannibalizes Itself
By Adam Lass
In this article
Why has Ford spent billions to acquire and fund these prestige marques, if they gain no prestige from owning them?
Now even the famed, eternal F-150 pick-up is being pushed into the ash heap of irrelevance…
By the time my youngest daughter is hitting me up for a car for college, the option of buying her a Ford may long gone.
Let's play word association: When I say “Ford,” what comes to mind? Is it “luxury sedan?” Or safety? Or perhaps “hot rod?”
Most of the people I asked (admittedly peers of a certain age) answered “Mom's station wagon” followed by “the wheezing Pinto I took to college.” Finally, their third choice was “that cool Mustang Cobra that Nick Cage kept stealing.”
Not a single one mentioned Aston Martin, Volvo, Jaguar or Land Rover, Ford's high-end perpetually money-losing badges.
Well, one did, but he's a specialist, a master mechanic with 30 years of experience keeping ill-designed Brit technology on the road. His comment? “Jaguars exist to separate yuppie lawyers from their ill-gotten gains.”
Consumer Spending: Why did they spend the money in the first place?
So what's the point? Why has Ford spent billions to acquire and fund these prestige marques, if it gains no prestige from owning them?
Well, the point was, at least at one point, to migrate technology and class from the high-end labels back to the mother ship, and to send mass production know-how, and the ability to reduce the number of parts and assembly operations, back to the specialty shops.
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The project has failed miserably on all fronts. An example: Ford promised the folks in Gothenburg that it would not pester Volvo's engineers about shortcuts and price-saving measures. This promise lasted about six minutes, and morale and innovation in Sweden is now par with that exhibited in many stateside plants.
And that, my friends, is the wrong import.
Consumer Spending: The prestige never arrived
And yet even though Ford brought over entire operating systems, it has never managed to rub any brand shine off onto the blue oval. And lately, it can't even hold its own as “Mom's Wagon,” what with the Taurus sitting in showrooms virtually unaltered for 20 years while Chrysler and Honda pushed minivans out the door in record numbers.
And now even the famed, eternal F-150 pick-up is being pushed into the ash heap of irrelevance by Toyota's Tundra, and Nissan Titans (made right here in the good old USA).
Well apparently someone in the corner offices at Dearborn is getting the message, or at least a message. Rather than try any longer to convince the world that Ford is synonymous with custom carriage work or uniquely powerful engines, it is instead looking to pedal off Aston Martin to a group of genuinely passionate owners which includes the executive and backer of Aston Martin's racing team, David Richards and John Sinders.
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Consumer Spending: Rest in pieces
Dearborn is hoping this will free up desperately needed cash, although to date, I have heard no concrete plans as to what to do with the $925 million (although it has been suggested that most of it could be swallowed by the next few years of losses at Jaguar.)
Let's face facts: By the time my youngest daughter is hitting me up for a car for college, the option of buying her a Ford may long be gone. Heck for that matter, there may be no Chryslers around either. And GM may simply be a subsidiary of the federal government, kept open so as to provide a conduit for a couple million retirees' benefits.
Please understand that this is not a rant as to how bad these companies always were. I have proudly owned two Mustangs, a Ranger, an F-150 pick-up, an Explorer and a Miata (Mazda being one of Ford's moderately successful purchases).
Rather, it is a weary look forward, and perhaps an early requiem. At one point I advised readers to buy Ford (F:NYSE) under $8, figuring that Bill Ford's passion would bring the company back from the edge. Now Bill has ceded the day-to-day operations to yet another apparatchik, Alan Mulally, who is selling off the parts so as to raise money to do what? Make retro Model Ts?
Sell Ford now, wish it well in the future (whether you mean it or not), and move on.
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Aston Martin Sale: Ford's mealy-mouthed press release re: the sale of Aston Martin. - Ford Newsroom
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