"EXCITEMENT" AT FORD MEANS MORE MAZDA, VOLVO

Another memorandum from William Clay Ford, Jr., CEO of Ford Motor Company (R) is making the rounds of the automotive media. First published by the Detroit News on Saturday September 2, (and suspiciously coinciding with a Newsweek interview of Bill Ford), the memo is another bit of "change or die" hysteria of the sort now regularly emanating from the Glass House.

According to Bill, "The business model that sustained us for decades is no longer sufficient to sustain profitability . . . We must change to a new business model that requires greater bottom-line contributions from cars and crossovers, continued leadership in pickups in North America, healthier profits from all other business units, growth in Asia, greater integration of our global operations and an evaluation of strategic alliances."

Oh yeah, and "world peace," too.

"Healthier profits from all other business units" ought to send shivers down the spines of enthusiasts, because that's the sort of "profit center" mentality which eventually leads to cuts in performance parts operations, racing programs and low-volume niche builds. Why? Because some bean counter who would be just as happy counting widgets for Wal-Mart as working for FoMoCo will ignore the intangible benefits of these high performance programs, deciding that the return on invesment is not high enough for the risk involved.

Don't believe it? Just think back to November 197o when Lee Iacocca and Henry Ford II massacred the "Total Performance" programs out of concern for costs and environmental/safety image.

Bill also elaborated on what "greater integration" mean in "Fordspeak." Reuters reports that Bill opined "that since becoming CEO in 2001, the company had aligned product development of Ford, Lincoln and Mercury models 'much more closely' with Mazda and Volvo, to improve efficiency and produce 'more exciting vehicles', adding he wanted to drive this effort deeper."

Sure, Bill, Sure. That Ford Five Hundred is just a rolling ball of excitement.

Reading between the lines, this latest restructuring-of-the-month is a battle for the soul of FoMoCo.

On the one side are forces such as the truck staff, Ford Racing and the few true believers still pumping up Mustang. This side remembers Ford's historic swagger and its ability to take "bold moves" that transcend the competition's plans, set new benchmarks, and provide greater value to FoMoCo's customers. This side isn't rattled by the Japanese or the environmentalists or minor shocks to world fuel markets.

On the other side are the bureaucrats and bean counters who believe the "Way Forward" is off-shore engineering (at Mazda and Volvo), badge engineering, and just barely matching the objective performance of mass market Japanese cars in order to carve out a little bit of market share. This side is obsessed with cost cutting and placating any number of politically-correct non-automotive forces. This side ignores niches for the "big picture" and believes "excitement" consists of chromed wheels, extra stripes and the odd, profit-packed gadget.

Given the talent drain reportedly occurring at FoMoCo, the real question is which side will prevail.

It doesn't look too good right now.

JAGUAR LEAKS MORE THAN JUST MONEY

"Jaguar has cost Ford in excess of $10 billion since it acquired the brand in 1989," according to Autoweek. "It’s still not profitable and it continues to restructure."

A development that sure will not help is the August 30 "quarantine" of some 2006 and 2007 XJ sedans on reports of "massive gasoline leaks from vehicle fuel tanks." According to Automotive News, the "quarantine prohibits Jaguar dealers from selling any new or used XJs with vehicle identification numbers G49701 through H13209."

Of course, the National Highway Traffic Safety Administration is looking into the reports.

This cannot be good news for the mangy kitten brand. Much of that $10 Billion in losses FoMoCo fed Jaguar was to reverse the brand's "legendary" poor quality image. Yet this XJ fiasco is poised to create the same kind of quality black eye as the high profile grounding of Ford GTs out of concern for wishbone failure.

FoMoCo simply doesn't need this kind of publicity.

Moreover, now Jaguar seems to have stumbled into a fuel-tank quagmire familiar to FoMoCo's faithful. From the days of exploding Pintos to the more recent Police Interceptor controversy, fuel tanks have sometimes been a vulnerable point for FoMoCo. Now that expensive Jaguars are reportedly filling upscale garages through gasoline incontinence, many will recall Fords of the past who couldn't hold their gasoline and wonder why this sort of thing just keeps on happening.

One would think that with FoMoCo's history, they'd be particularly careful in checking fuel tank issues.

On the other hand, one can just envision the a Saturday Night Live-style satire based on the old "LA Law" opening sequence from the 1980s . . . [XJ trunk slams . . . car explodes . . . audience cheers as greedy trial lawyer goes up in smoke . . .

(a number of aftermarket companies dealing in Mustang and other vintage parts no longer serviced by FoMoCo would cheer lustily if the immolated "trial lawyer" were from Howard, Phillips and Andersen, a Utah law firm representing FoMoCo against these vendors on intellectual property enforcement matters. See http://www.mustangevolution.com/stockton-firm-faces-suit-ford-trademark-violation/)]