FORD MOTOR COMPANY (R) LOSS AND THE LAST TAURUS

The Automotive News (www.autonews.com) is reporting that Ford Motor Company lost $3.08 per share during the third quarter of 2006. To put this into some context, Ford Motor Company Stock (NYSE Symbol: F) has been trading around the $8.00 per share range for some time now. Ford Motor Company’s entire market capitalization is only about Fifteen Billion Dollars.

Ford Motor Company’s largest loss in fourteen years amounts to $5.8 Billion Dollars. The wonks explain it away as mostly "restructuring charges related to planned job cuts in North America and declining sales of its profitable trucks."

But the families of the 45,000 Ford Motor Company employees who won’t have "Ford in [their] future[s]" cannot be comforted by such a convenient categorization. The Automotive News also reports that FoMoCo "will restate financial results from 2001 through second quarter of 2006, citing an accounting change on interest rate derivatives used to hedge its long-term debt."

REQUIEM FOR A HEAVYWEIGHT (a microcosm of FoMoCo’s problems)

FoMoCo is also rolling the last Taurus off the line this week.

The 1986 Taurus set the bar for the modern FWD family car. It represented a paradigm shift for Detroit as it came to the realization that a global automobile market, regulatory pressures and periodic energy shocks meant that American sedans needed to adopt a more international design.

Once upon a time, the Taurus was the best selling car in America. But now it joins the ranks other "best sellers" -- such as the Oldsmobile Cutlass -- in the dustbin of automotive history.

In a related column entitled "A Lesson in How to Mistreat an Icon," Peter Brown, Associate Publisher of the Automotive News points out that "Ford's current financial crisis and the failure of the Taurus are not coincidental." Brown opines that "The death of the once-iconic Ford Taurus confirms, by negative example, the automotive adage, ‘It's the product, stupid.’"

Brown frames his argument in terms of Lee Iacocca’s published 1977 lament about the end of the unregulated automobile fueled by cheap gasoline. While Iacocca and his boss – the Deuce himself (Henry Ford II) -- fretted, upstart Toyota claimed not to fear the future. Indeed Toyota struck first with the uninspiring 1983 Camry. But FoMoCo shook Detroit, if not the automotive world, with the 1986 Taurus. Brown opines that the Taurus proved Iacocca wrong about the future.

The original Taurus was a budget-priced Audi 5000 knockoff borne out of the fiscal desperation of the Iranian hostage/second gasoline crisis and the end of Iacoccaism at FoMoCo. In a single stroke it announced Dearborn was a serious player in the American sedan market. It trumped market leader General Motors and the Japanese imports, making their squarish offerings in the mid-sized sedan class look ancient overnight. In some ways it remade the way Detroit developed cars – even becoming an inspiration for future FoMoCo CEO Alan Mullaly

But Speedzzter and other truly objective sorts acknowledged that while the original Taurus was groundbreaking for FoMoCo, it really wasn’t a world-class sedan.

Instead it was a brilliant combination of aerodynamic styling, innovative features (i.e. the dual sunvisors on each side), packaged on a relatively pedestrian FWD platform. The original pushrod OHV Taurus engines were somewhat torquey, but lacked the wide range of better-finished Autobahn burners. Nor did the original Taurus achieve anything spectacular in its fuel efficiency. The FWD chassis was competent for main street motoring, but didn’t inspire side trips through the twisties.

In short, FoMoCo aimed "the Bull" (Taurus) squarely for the middle market of "appliance motoring" and hit the bull’s-eye. But other than establishing a few stylistic conventions, the original Taurus didn’t really advance the art and science of the Automobile.

It was a car for non-car people.

No one ever wrote a song extolling the "thrilling" virtues of shuttling along in a V6 Taurus. No one ever dreamed of building a hot rod out of one or even longingly looked at one as a "first car." No aftermarket sprang up to develop new and better accessories or performance equipment for them. No Walter Mitty-types ever dreamed of blasting down the unrestricted Autobahn in one or of nipping apexes on the Pacific Coast Highway. And likely no one (except perhaps the Towe collection in Sacramento and the Henry Ford in Dearborn) ever put one aside for future generations to admire and appreciate in pristine form.

No, the Taurus wasn’t a car meant to inspire or to enchant. It wasn’t aimed at making any kind of enduring statement about automobility. It was simply a designed-by-committee commodity car that was executed a little above average. It was a segment-filler and nothing more. While it may rank almost as significant to FoMoCo’s business history as the "shoebox" 1949 Ford, it is destined to become little more than a footnote to the design history of the automobile. For future generations, it will likely be little more than the answer to a trivia question about a distant time when American manufacturers still had the muscle to lead the American automobile market.

Sure, over the Taurus’s long run, there were a few interesting innovations. The poor-selling SHO Taurus models sought to infuse the FWD sedan with a bit of sporting flare. While the Yamaha-built DOHC 4-valve V6s and V8s were technologically interesting (especially the complex variable-runner intake manifold systems), the SHOs didn’t produce legendary performance numbers (too much weight, not enough torque or horsepower, unability to overcome the inherent limitations of FWD in a sports sedan). Nor did the SHO produce groundbreaking fuel efficiency.

Ford Motor Company never stepped up with AWD, turbocharging, supercharging or other efficient performance equipment for the SHO that might have transformed the boring Taurus platform into a later-day super sedan. The SHO never distinguished itself in professional or grassroots motorsports competition, and thus never developed much of a "rep" on America’s boulevards. It never became an export star. Nor did the SHO ever represent any real "bang for the buck" in America. Consequently, the SHOs languished on the sales floor and did not become a celebrated modern "muscle car" outside a discrete and insular SHO enthusiast community.

FoMoCo eventually brought near-SHO levels of engine technology to the bread-and-butter ordinary Taurus with the Duratec line of "Modular" V6s. But this was long after multivalve OHC engines had become expected in the "appliance sedan" classes. And FoMoCo's engines tended to lag behind the industry in both power and economy.

Given that Ford Motor Company was once closely identified with mass-market V8 power, it’s somewhat surprising that FoMoCo never attempted to infuse Taurus with the Modular 4.6 V8s–despite the fact that the 4.6s were engineered for transverse FWD applications and the Taurus-based Lincoln Continental proved that the DOHC 4.6 engine could work very well in the platform. Thus, we never found out whether bringing V8 power to the masses again – just like old Henry did back in 1932 – might have rekindled America’s love for American sedans. (Both GM and DCX went on to offer V8s in the Taurus market segment, leaving FoMoCo apparently flat-footed)

Notwithstanding the improvements under the hood, FoMoCo continued to decontent and cheapen the Taurus as the sales seasons went by. The 1996 redesign brought us an oddly-styled "fishmobile" with a smaller trunk, fewer "trick" ergonomic features, ordinary fuel economy, and nothing earthshatteringly "new" to capture the imagination or attention of ordinary American car shoppers. Meanwhile Toyota and the other Japanese brands worked hard on "continuous improvement," leading them to attract more attention and perhaps more accurate targeting of the "appliance motorists’" consumer tastes. The 1996 Taurus team sought to "Beat Camry." Instead, they provided a softer target for Toyota to feed upon.

After losing the sales lead in the early 1990s, FoMoCo increasingly kept production volume up with sales to rental car fleets (including its own in-house Hertz brand). This temporary fix flooded the market with lower-level, often-abused Taurus sedans (resold as "program cars") which tended to gut reliability ratings and residual values. It also cheapened the image of the Taurus.

And FoMoCo did little to fix the problems and nothing to regain the offensive. Engines stagnated. Design changes were minimal. The SHO disappeared with little notice. Even as FoMoCo introduced a cartoonish "funny car" version of the Taurus as its NASCAR standard bearer, few really believed that the exploits of the silhouette 700+ h.p. RWD race cars on Sunday would lure "stock car" fans into buying a boring FWD V6 Taurus on Monday. Instead, the racing "Taurus" was simply a "brand awareness" gimmick aimed at pushing FoMoCo’s V8-powered trucks and Mustangs.

And the relatively undistinguished racing career of the Taurus did almost nothing to improve the lot of the ordinary ones you could buy at your local Ford dealer or (more likely) rent at the Hertz counter.

Thus, while Detroit and the Federal government were hell-bent on forcing Americans into a FWD econobox future, millions of Americans resisted, turning their affection toward practical RWD and AWD/4WD trucks and SUVs.

Instead of improving its cars and building more alluring RWD/AWD sedans and coupes, FoMoCo wasted its prosperity in the 1990s on expanding its share of the lucrative truck and SUV markets. While the Taurus attracted many to the Ford brand for a while, FoMoCo did pitifully little to keep them interested or to actually develop itself into a consistent market leader.

The Taurus shows that FoMoCo obviously failed to learn from its experience with the Model T. Ford’s domination of the American automobile market was lost in the 1920s because Henry Ford didn’t keep improving the Model T to lead the market and trump the competition. Ford alumnus William Knudsen took advantage of this over at GM’s Chevrolet, creating a mass market powerhouse that was rarely challenged until GM lost its way in the late 1970s.

The Japanese, however, were paying attention. They have now assumed the role of William Knudsen and once again Ford is paying dearly for not taking advantage of its opportunities.

Nearly eighty years later FoMoCo has repeated Henry Ford's sad mistake with the Taurus. The Taurus is dead after a lengthy illness. But unlike the Model T before it, the Taurus won’t be celebrated. It won’t be lionized or even fondly remembered. Few if any will be restored or venerated as antiques. For as long as FoMoCo registers in the psyche of motorists, the Taurus will simply stand as another example of another missed opportunity.

And FoMoCo’s critical lack of leadership here has hurt its employees, its customers and the competitiveness of the American automobile market. The "death" of Ford’s chance to lead is truly of more significance than the passing of another bland FWD "rental car" or today’s loss of $3.08 per share.