Thursday, February 01, 2007


Some simmering thoughts about Ford's troubles and their effect on the Twin Cities follow. I was listening to NPR a couple of weeks ago, and they were interviewing some Ford workers. The workers were offering their thoughts about their impending layoffs, plans for the future and opinions about their employer. Some were complimentary, thankful to Ford for employing several generations of their families for as long as they did, and the good-paying jobs Ford provided. Others were not so complimentary, upset at Ford for their continued mismanagement, the resulting mess Ford is in now, and its effect on American workers.
__I'll admit I've never purchased an American car. All of my experiences with American cars have been poor, and the market says I'm not alone in this experience. Nevertheless, I prefer an American product over an import if I have a choice and the quality and price are comparable. For example, I always buy Crucial memory, made right here in Idaho (very unusual for commodity and consumer electronics). So it was with excitement that I read about the launch of the Ford 500, a handsome flagship sedan that replaced the ancient body-on-frame behemoths of the past. Reviews were great, and it looked like Ford finally had a desireable, quality product to help turn things around. Imagine my disappointment to learn that the Ford 500 is based on a Volvo platform (like the Freestyle crossover).
__Before I smashed my Civic I'd been thinking about buying a new car while I still had some resale value left in the Civic. Near the top of the list was the Ford Focus, a smartly-designed compact that was getting decent reviews. They recently updated it, garnering praise. The biggest non-cosmetic improvment? A more powerful, more fuel-efficient and more environmentally-friendly engine made by... Mazda.
__So what's the deal here? Can't Ford innovate, improve quality or performance on their own? Why do they have to buy foreign companies like Volvo and Mazda to offer a competitive product? Even the praiseworthy Escape Hybrid, developed by Ford, either copies or uses Japanese technology.
__People will point out that Ford's troubles are because of labor and health care costs. However, Ford has been doing well when they anticipate and respond to the market, either by luck or by talent. First there was the successful Taurus, then SUVs and trucks became trendy (although I'd say the latter was pure luck). But somehow Ford thought they could ride the high margin truck/SUV wave forever and failed to adapt. They should have been taking the crazy profits from glorified trucks and investing them in the future.
__That being said, I have to say the new Mustang was a smart move. Not the kind of thing that alone could save the company, but the kind of 'bold move' that the company is touting for their very survival.
__I have to give GM credit for investing heavily in fuel cell technology, while also marketing ethanol compatible vehicles. This is the kind of bold investment that innovative companies make, not fat, sluggish old guard companies, and ensures not only the survival of the company, but continued growth and success. Ford could learn a lesson from GM. If not for the sake of fat profits for overpaid execs, then for the sake of the American worker, the American economy and American reliance on foreign oil.