Ford Motor Co. plans to halt production of the Mercury Sable sedan and Ford Taurus X crossover next year, according to company documents reviewed by The Detroit News.

Both vehicles are built at the company's Chicago Assembly Plant, which recently began production of the Lincoln MKS sedan. The factory also produces the Ford Taurus sedan on the same platform. That vehicle will remain in production.

Sales of the Taurus X -- the vehicle formerly known as the Freestyle -- are down more than 25 percent this year. Sales of the Sable, formerly known as the Montego, are down more than 8 percent from last year's already low tally. The vehicles have not been big successes for Ford and both are in conflict with the company's plans for their respective brands.

The full-sized Sable sedan does not fit with Ford's new vision for Mercury, which involves narrowing the marque's focus to smaller cars and crossovers to complement the bigger vehicles offered by Lincoln.

The full-size Taurus X crossover is an aging design that makes little sense in the Blue Oval lineup now that Ford has launched the all-new Flex crossover.

Ford would neither confirm nor deny the moves.

"We don't comment on speculation on about future product plans," spokeswoman Jennifer Flake said.

But analysts said the decisions are not surprising.

"The Taurus X doesn't really have much of a place anymore," said Erich Merkle of Crowe Chizek and Co.

"The Sable is a good enough car, but it doesn't really matter because they don't sell enough of them to make a difference."

Ford sold 2,276 Sables last month, down from 2,589 in July 2007. It sold 2,034 Taurus Xs in July, down from 2,705 the year before.

CEO Alan Mulally ordered the names of both vehicles changed to more familiar monikers last year.

At the time, he said Ford had erred in abandoning for no good reason brand names that still resonated with consumers.

Sales of both vehicles also have been hurt by rising gasoline prices.

via detnews 

 

Ford Motor Co. will consolidate sales and marketing for its Ford Division with its Lincoln Mercury arm Aug. 1, according to two executives close to the automaker. In a cost-cutting move, the marketing and sales staff will be aligned by product type and have responsibility for models in that category from all three brands, they said.

Ford traditionally had an executive overseeing all three vehicle brands for North America, but maintained separate sales and marketing groups for Ford along with Lincoln Mercury.

Ford did not return calls for comment by press time.

Reassigned managers
On July 29, Ford announced new assignments and positions internally. The key moves, according to the two executives, are: Company veteran Brett Wheatley, who in February was named general marketing manager for Lincoln Mercury, moves to the customer incentives group; and Tom Grill, Lincoln brand manager, moves to the global marketing group under Anne Belec, director of Ford's global marketing. Mr. Grill will be given an inward-looking position tied to Ford's culture globally.

The moves are part of Ford's latest round of cost cutting, announced in June, which called for a 15% reduction in white-collar staff by Aug. 1. Ford last week reported a record global net loss of $8.7 billion in the second quarter; results were dragged down by its auto business in North America, which posted a pre-tax loss of $1.3 billion in the last period, or $1 billion worse than the same period in 2007. The company also said it slashed spending on worldwide auto advertising and sales promotions (excluding incentives) in the period by $200 million to just $100 million.

Among the casualties on the staff was Mark Kaline, the high-profile global media manager of Ford Motor Co., who confirmed he left this week after 11 years. Mr. Kaline, board chairman of ANA's TV Committee, said the staff cuts are the fourth or fifth at Ford in recent years and "none of the separations were performance-related." He said he's "never worked with more dedicated, hard-working people."

Todd Turner, president of consultant CarConcepts, said Ford may as well combine sales and marketing for the three divisions for savings. Handling models from the three brands by vehicle type makes sense, since that's how Ford's product planners are aligned and the setup allows the planners to establish differences by brand.

Waiting for repercussions
Ford's marketing shifts are bound to have an impact on its U.S. ad and media agency, WPP Group's dedicated Team Detroit, Dearborn. The agency should insist on maintaining dedicated brand teams for Ford, Lincoln and Mercury to keep the brands separate and distinct, said a third executive, who formerly worked on Ford's account.

The automaker gave clues the consolidation was in the wings. On July 1, it revealed that Ken Czubay was re-joining the company July 16 as VP-sales and marketing of Ford, Lincoln and Mercury vehicles in the U.S. The company also said John Felice, general marketing manager of Ford Division, would add Lincoln Mercury to his duties and report to Mr. Czubay, 59, who worked for Ford from 1970 to 1983 in various management and executive posts. 

via adage 

Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) has reached its goal of cutting salaried costs by 15 percent in North America under its overall restructuring and is prepared to cut more if necessary, a top executive said on Wednesday.

"We had to take some tough decisions, we got through it," Mark Fields, Ford's president of the Americas, told reporters at an event focused on the automaker's 2009 models. He did not disclose the exact number of salaried job cuts.

"We are going to continue to look at our structure and evaluate that versus the external environment," Fields said. "We always continue to look at our structure and what it means to be competitive."

Ford, which posted an $8.7 billion loss in the second quarter, has unveiled plans to introduce six European vehicle models to the North American market and to convert pickup truck plant capacity to car production.

The restructuring plan, a continuation of Ford's efforts in recent years, comes as executives see a migration in demand toward smaller vehicles in the United States due to high gasoline prices as permanent.

Ford's total engine and transmission investments over the next couple of years will be unprecedented, Fields said.

Ford has focused on gas engines such as the EcoBoost, to increase fuel economy, but diesels, hybrids and other engine types will "get their fair share" of the spending, he said.

Fields said it would be too soon to predict a bottom in the U.S. auto market, but added that Ford would be ready to take advantage of a turn when it occurs.

U.S. auto sales fell to a 16-year low in July, landing hardest on the larger trucks and SUVs and on U.S.-based automakers.  Continued...

via reuters 

Ailing automakers look to save costs of developing powertrains

Bryce G. Hoffman / The Detroit News

General Motors Corp. and Ford Motor Co. are discussing a possible collaboration to develop new engines and other powertrain technologies, according to sources at both companies.

The rival automakers are keen to find ways to reduce research-and-development costs even as they struggle to respond to a dramatic shift in consumer demand from big trucks and sport utility vehicles toward smaller, more economical cars and crossovers.

A deal could give Ford access to GM's Volt technology -- if it becomes commercially viable. It could also help GM offset cuts to its product development budget.

GM first approached Ford more than a month ago, two sources familiar with the situation said. GM told Ford that it was willing to discuss a wide range of possible collaborations.

GM's overture drew a mixed reaction inside Ford. Some executives felt that previous joint projects had benefited GM more than they had Ford, but others -- including Ford's global product development chief, Derrick Kuzak -- saw it as an opportunity to leverage some of GM's technology while at the same time reducing Ford's own development costs.

The matter went to Ford's board of directors last month, which voted to authorize negotiations with GM.

Since then, there have been at least three meetings between the two companies involving Barb Samardzich, Ford's head of powertrain operations, and her counterpart at GM. No agreements have been reached, but the talks were characterized as promising.

Neither company would confirm or deny the reports. GM spokesman Tom Wilkinson said his company does "not comment on speculation about future products or product development."

Ford spokesman Said Deep said Ford is concentrating on bringing its fuel-efficient European platforms to North America, but did not rule out working with another manufacturer.

"Our focus and greatest opportunity is to create 'One Ford,' and we're doing that leveraging our own global assets," he said. "(But) we're always open to talking to others in the industry. Beyond that, we're not going to comment."

Success worth replicating

Powertrains are the logical focus of any collaboration, say insiders in both companies.

Engines and transmissions represent a huge portion of the development cost of a new car or truck, yet they are not immediately obvious to the consumer in the way that a new navigation system or body design is. Developing an entirely new engine can cost $1 billion. Splitting those costs with another car company can save an automaker $500 million. A new transmission can easily cost $800 million -- or $400 million if the development costs are split.

Moreover, the onboard computers that control these components have a lot to do with how they operate, controlling things like shift timing and acceleration. Each automaker could create distinctive driving experiences using the same underlying components.

Such a move would not be unprecedented.

Ford and GM successfully collaborated on the development of a fuel-saving six-speed transmission that is rapidly becoming the backbone of both companies' powertrain lineup. Kuzak has pointed to the success of that program internally as something worth replicating.

Word of a possible collaboration between GM and Ford came as little surprise to analyst Jim Hall of 2953 Analytics LLP. Following the completion of the six-speed transmission tie-up two years ago, he gave GM CEO Rick Wagoner and other senior executives a presentation demonstrating the benefits of working with Ford on other powertrain technologies. He remains convinced that it represents a real opportunity for both companies to control research-and-development costs while accelerating the introduction of new, more fuel-efficient cars and trucks.

"The transmission deal has worked well for both companies," Hall said. "I told them, 'Don't stop there.'"

He said GM is ahead of Ford on four-cylinder engine development, but added that GM could learn a lot from Ford about combining turbo-charging and direct injection -- the technologies behind its EcoBoost technology, which promises to deliver more power and better fuel economy.

Electric technology useful

Then there is Volt, GM's promised vehicle that runs primarily on electricity.

While it remains to be seen whether GM will succeed in bringing it to market, Ford is reportedly keen on getting access to the technology if it does. And Hall said that is something GM should welcome.

"I would think that would be part of it and, if GM is smart, they will proliferate Volt technology," he said.

Doing so would provide GM with much needed revenue while at the same time reducing its own piece-cost for Volt components. It would be a way for GM to create economies of scale not possible with its own products alone, and would ultimately reduce the cost of such technology for consumers.

"Ford has more experience in getting the costs down, and that could really help GM," Hall said.

You can reach Bryce Hoffman at (313) 222-2443 or bhoffman@detnews.com.

via detnews 

 

Just a week after Ford's (F) disastrous quarterly earnings announcement on July 24, (BusinessWeek.com, 7/24/2008), Mazda (MZDAF), the Japanese company one-third owned by the ailing U.S. automaker, on July 31 once again highlighted how much better it is faring than its larger partner.

In a tough environment for all automakers, Mazda's operating earnings slid an expected 12%, to $265 million, but that was largely explained by a sharply stronger yen. Perhaps more important, the company said it still expects net earnings of $750 million during the current financial year. Despite weaker U.S. sales in July, Mazda plans to sell 1.48 million cars this year, up 9% from 2007.

The Japanese carmaker's prospects for the second half of 2008 also look relatively bright. On July 23, it began production at AutoAlliance International in Flat Rock, Mich. of a fully remodeled version of the popular Mazda6 sedan. In January, the company will launch a new version of the Mazda3 hatchback, its global best-seller. In North America, despite a weak July—news of which triggered an 8.8% slump in Mazda's stock in today's Tokyo trading—Mazda's sales are down just 1.7% during the first seven months of the year.

Casting a Shadow over Mazda

That contrasts starkly with the grim news from Ford, which has scrapped a plan to return to profitability by 2009 and now has a market value of $10.4 billion—just $2.4 billion more than Mazda. Ford's year-to-date sales are 1.265 million, down 14.4% from a year ago.

Despite Mazda's prospects, Ford's troubles cast a shadow over the Hiroshima-based automaker. Should Ford's position worsen, Mazda could begin to feel the heat. Battling with higher gas prices, a slowing U.S. economy, and a heavy reliance on trucks, Ford is burning more cash than it planned. Even before its recent loss, the company's red ink topped $15 billion in the past two years, and it went through $8 billion in cash during the first half of 2008. While Chief Financial Officer Don LeClair says Ford believes it has enough cash, the company is not committing to a return to black ink by 2010. "There is still too much uncertainty and volatility in the economy [to target a return to profitability]," CEO Alan Mulally said on July 24.

That causes several headaches for Mazda. After being rescued by Ford from near-bankruptcy in the mid-1990s, the company has become a crucial part (BusinessWeek, 6/14/04) of passenger car development for Ford.

Ford Benefits From Japanese R&D

In addition to jointly operating auto plants in Michigan, Thailand, and China and sharing personnel, Ford and Mazda collaborate on research and development. Over half of the passenger cars developed at Mazda's Hiroshima R&D hub will end up badged as Fords, says Hirofumi Yokoi, an analyst at consultants CSM Worldwide in Tokyo. That's up from 14.8% in 2000 and 42% today, as Mazda's role within the alliance flourishes. Credit Suisse (CS), meanwhile, estimates that Mazda saves over $90 million a year by sharing development costs with Ford. The benefits to Ford, it says, are likely several times greater.

Most important, many of the jointly developed cars will be the smaller models that Ford chief Mulally believes are vital to his company's turnaround. But if the U.S. automaker's troubles get so bad that it couldn't pay as much into the partnership, Mazda would feel its share of the pain. Analysts say Mazda would have to scale back its plans or pay more of the costs itself, which would weigh on its financials.

via businessweek. 

Volkswagen AG moved ahead of Ford Motor Co. as the world's third-largest automaker by vehicle sales in this year's first half, according to figures the companies released last week.

Volkswagen reported a 7.2% increase to 3.31 million cars and trucks, while Ford said its sales fell 11% to 3.09 million.

Ford is headed for another decline in the annual global sales rankings, after yielding the No. 2 spot to Toyota Motor Corp. in 2003.

Ford's U.S. sales fell 14% as gasoline prices rose above $4 a gallon, crimping demand for large pickups and SUVs. Its figures also exclude Jaguar and Land Rover, sold to Tata Motors Ltd. in June.

Toyota's output rises

Toyota Motor Corp. increased global production last month helped by demand from emerging markets and for fuel-efficient autos in the United States where gasoline prices have surged.

Toyota increased global production 1% to 741,873 vehicles in June and Nissan Motor Co., Japan's third-largest automaker, raised output 12.3% to 309,688 units, the companies said in separate statements Tuesday.

Honda said its output last month fell 5.4% to 322,866.

Demand for new vehicles in China, Brazil and other emerging markets pushed Toyota's second-quarter sales 2% higher. Nissan's U.S. passenger car sales in the first-half rose 5.3%, compared with a 10% overall drop in the world's largest auto market as gasoline topped $4 a gallon.

Toyota, excluding affiliates Daihatsu Motor Co. and Hino Motors Ltd., increased production by 5.8% percent to 4.46 million vehicles in the first half.

July results look bleak

Take automakers' inability to finance leases, combined with gas prices, the weak economy and other problems facing the industry, and you have the makings of what could be one of the worst months for auto sales in more than 15 years.

Auto companies report their U.S. sales for July on Friday, and the results are expected to continue the downward trend that has plagued the industry all year. Auto consulting company J.D. Power and Associates predicts the industry will see its worst July since 1992, with little chance for a recovery in the next 12 months. That forecast is shared across the industry.

"There doesn't appear to be any indication that we're going to have a second-half recovery to any great extent," said George Pipas, Ford Motor Co.'s top sales analyst.

Dealer chains' shares up

Group 1 Automotive Inc. and Sonic Automotive Inc., the owners of almost 300 dealerships, rose the most in New York trading in at least four years after posting second-quarter profits that beat analysts' estimates.

Both companies said net income fell on costs to dispose of franchises, while per-share earnings exceeded analysts' projections when those expenses are excluded.

"We have seen some improvement compared to the relatively weak industry experience the entire sector saw in June," Sonic President B. Scott Smith said Tuesday in a statement.

Industrywide U.S. auto sales plunged 18% in June.

Group 1 gained $2.63, or 15%, to $19.85, the biggest daily percentage increase since October 2001. Sonic rose $1.18, or 12%, to $10.69, the most since July 2004.

via  freep

 

A leading UK monthly car mag has let the Ka out of the bag. Pictured ahead of the official embargo, it looks like my subscription to the well-known publication has paid off.

From this pic it certainly appears that the new Ka will look the part. It looks a lot like a baby version of the Fiesta, which is no bad thing. There is a touch of Corsa about it though, which is a bit disappointing

It's well known that the Ka will share its underpinnings with the Fiat Panda and 500, and be built alongside the Italian cars in the ironically named town of Tychy in Poland.

According to those in the know, the Ka will get 1.4 and 1.6-litre petrol engines and a 1.6 TDCi diesel engine.

Expect to see the car first at the Paris motor show, and then in a highly contrived cameo appearance in the new Bond film, Quantum of Solace, which opens on 31st October.

via tribes.cartribe 

Microsoft to build on auto unit

Detroit may be struggling to sell cars, but Microsoft Corp. sees nothing but room to grow in its push to wire them.

The Redmond, Wash.-based software company today will announce a massive new investment in its automotive business unit and tapped a Detroit native to lead the charge.

"We're doubling down. We're going to increase the headcount and operating expenses by 30 percent this year," said Tom Phillips, a 16-year veteran of Microsoft who will replace Martin Thall as the head of the company's automotive division. "We know that things are tough for the auto industry, but it's the perfect time to make this investment. There are new customers coming into the market, and they are looking for new experiences."

Microsoft works closely with a number of car companies to bring computer connectivity and infotainment to the automobile. The most visible fruit of those efforts is Sync, the product of Microsoft's collaboration with Ford Motor Co. that debuted last year and has already given the Dearborn automaker a much-needed boost with younger car buyers. It allows motorists to control their cell phones, music players and navigation systems with voice commands.

Phillips, who is currently the chief technical officer of Microsoft's specialized devices and services group -- a post he will continue to hold in addition to running the automotive operations -- told The Detroit News that Sync is just the beginning.

"There are a lot of technologies that are two to three years out that are going to provide even more connectivity and innovation," he said.

"There's such a disconnect between what people experience in their cars and what they experience in the rest of their lives. It hasn't really evolved that much."

Microsoft announced one today, saying it is now making its "Live Search" technology available to automakers. Using it, they will be able to develop in-car systems that allow drivers to search for nearby businesses.

Despite a deepening downturn in the United States, Phillips said the auto market is too big for Microsoft to ignore. The company already dominates desktop computing. He said the 820 million cars in the world are the next great frontier to conquer.

"Even if you get a 10 percent or 20 percent market share, you've got an enormous scale," he said.

Ford welcomed Microsoft's new investment in automotive research and development.

"Ford and Microsoft working together to deliver Sync has been a great experience and demonstrates what can happen when the power of two iconic brands comes together," said Jim Buczkowski, director of electrical and electronics systems engineering at Ford. "Ford Sync has proven to be a tremendous differentiator for us in the marketplace and working with Microsoft has been the key element in setting the industry benchmark for connectivity."

Ford recently passed the 200,000-unit sales milestone and is on track to deliver one million Sync-equipped vehicles by the end of next year. More importantly, Sync has dramatically increased Ford's appeal to younger drivers, according to company survey data. And it has helped Ford increase the average transaction price of its entry-level Ford Focus sedan by $1,000 over the past year.

"Clearly, the customers are recognizing the value and they are willing to pay for it," said Ford Americas President Mark Fields.

via detnews

 

 

Ford Motor Co. today reported a second-quarter loss of $8.7 billion, or $3.88 a share — the company’s worst quarterly results ever.

The performance is a consequence of slumping sales, especially of trucks, in a sour U.S. economy with $4-a-gallon gasoline, as well as rising material costs.

Last year during the same period, Ford reported a net profit of $750 million, or 31 cents a share.

Revenues during the April-June period declined to $38.6 billion, down from $44.2 billion a year ago.

The second-quarter loss includes $8 billion, or $3.26 a share, in special charges, mostly in North America, which has been hit hard by an economic slowdown, a consequence of crises in the housing, credit and energy sectors.

Ford’s operating loss from continuing operations, excluding special items, was $1.4 billion, down from a year-ago profit of $258 million.

During the quarter, Ford’s cash reserves also decreased by $2.1 billion, to $26.6 billion.

Following Ford’s $100-million profit in the first quarter, Ford has now lost $8.5 billion through the first half of the year.

At the same time, the company outlined an updated revival strategy that includes:

• Adding new fuel-efficient small cars and crossovers to North American product lineup. That includes six European small vehicles that are coming to North America from global B-car and C-car platforms.

• Converting three large truck and SUV plants to small car factories. Retooling begins this December.

• Upgrading the Ford, Lincoln and Mercury lineup almost completely by end of 2010.

• Doubling hybrid vehicle production and lineup in 2009.

• Doubling capacity for North American four-cylinder engines by 2011.

• Ford also plans to be the best or among the best in fuel economy with every new product in its segment

Prior to this quarterly performance, the worst three-month periods on record at Ford were in 1992 and 2006.

In the last three months of 2006, Ford posted a $5.8-billion loss, or $3.05 a share, which was the second-worst quarterly result in its history. Ford also lost $6.7 billion in the first quarter of 1992, mainly because of accounting rule changes on health care liabilities.

In a statement issued this morning, Ford CEO Alan Mulally said Ford is well positioned for the future.

“We continue to take decisive action in response to the rapidly changing business environment,” he said. “Our European and South American operations are robust and profitable. We have momentum in Asia. And we are uniquely positioned to leverage our global assets and the global strength of the Ford brand to quickly bring more small, fuel-efficient vehicles to North America.”

By 11:30 a.m. today, Ford stock was down 60 cents a share or 9.95% to $5.43 a share.

 

via  freep