ALLIANCE MANIA, "SUCCESS" CARS AND FORD MOTOR COMPANY

The attention of the "movers and shakers" in the world automobile business is on Paris.

(That’s Paris FRANCE, not Texas (notwithstanding that both General Motors (GM) and Ford Motor Company (R) (F) are introducing their new light trucks at the Texas State Fair, including a Sierra-Club-rebuffing F-450 SuperDuty for the consumer market))

Not only is the upcoming Mondial De L’Automobile (Paris Motor Show) internationally significant in its own right, it’s the backdrop to critical meetings between General Motors chief Rick Wagoner and Carlos Ghosn of Renault SA and Nissan Motor Company on the proposed "Renault Alliance."

Investor Kirk Kerkorian is ratcheting up the pressure on Wagoner and Ghosn by sending Wagoner a letter that Kerkorian’s Tracinda Corporation is considering upping its holdings in GM from 9.9 percent to 12 percent. Kerkorian also urged GM’s board to take a " a ‘strong’ role in reviewing a potential alliance with Renault-Nissan."

[Source: http://today.reuters.com/news/articlebusiness.aspx?type=tnBusinessNews&storyID=nN28192611&imageid=top-news-view-2006-09-28-140320-RTR84EX_Comp%5B1%5D.jpg&cap=File%20photo%20of%20billionaire%20Kirk%20Kerkorian%20in%20Wilmington,%20Delaware,December%203,%202003.&from=business (visited September 28, 2006) ]

The rampant speculation is that if GM’s "circle the Wagon[er]" defense can scuttle the scheme of Kerkorian and Jerry York for the GM-Renault-Nissan tie-up, then Ford Motor Company (R) will become the next target.

Coyly, Ghosn toys with such press suggestions: "‘Frankly, I said from the beginning that expansion of the alliance to a third North American party makes sense,’ Ghosn said at the J.D. Power and Automotive News Europe International Automotive Roundtable in Paris." www.autonews.com

Even the professional skeptics of Old Detroit see that a Ford may be in Carlos Ghosn’s future. Ghosn critic and Autoextremist Peter DeLorenzo opined this week that:

"Carlos is a one-trick pony, a quintessential turnaround artist with no second act - and there's only one place in the world that presents the perfect opportunity for him to start all over again, and that's the Ford Motor Company."

"Look for Brother Ghosn's Traveling Auto Salvation Road Show to arrive at Alan Mulally's doorstep soon."

http://www.autoextremist.com/page2.shtml

Of course, such speculation is fueled by William Clay Ford, Jr.’s long-reported interest in adding at least Ghosn to Ford’s Glass House gang.

Yet FoMoCo’s executive corps is not promoting the Blue Oval as a "sloppy seconds" rebound date for a spurned Renault and Nissan.

Don Leclair, Ford's chief financial officer, told the Automotive News that FoMoCo "does not need a merger or partnership." "Every good company reviews its options . . . But right now our No. 1 priority is to fix our business. It's where we are focused.""Although not actively seeking a partner, ‘our ears are always open,’ Leclair conceded." www.autonews.com

Such denials ought to strike the reader as genuine as William Clay Ford, Jr.’s claim that he was not looking to replace himself – made less than a week before Boeing-Ex Alan Mulally pointed his Lexus toward Dearborn.

Moreover, Speedzzter wonders about how all of FoMoCo’s "Way Forward" gyrating and quick-fix trial balloons are affecting the perceptions of potential customers.

Guido Reinking, editor of Automobilwoche, offers a Continental perspective.

"‘Successful people want to drive successful cars from successful firms.’ That statement, attributed to Porsche CEO Wendelin Wiedeking, is as straightforward as it is valid."

"Anyone wishing to check it out need only talk to a Volkswagen, Mercedes-Benz, Jaguar or Opel dealer about how the public perceives their brands. An outpouring of accumulated frustration will ensue." www.autonews.com

The "successful car" concept may account for a fair share of the lemming-like affection for Toyota vehicles in the U.S.A. When FoMoCo was on a "success" roll in the mid-1980s, its popularity soared. But, a fat and happy FoMoCo later turned too conservative and too concentrated in the truck and SUV segment, ultimately leading to a huge decline in perceived brand success. Nine years of market share losses will do that. Throw in a few huge lawsuits, recalls, fuel price shocks and a dividend cut and some consumers began to see FoMoCo as on on the ropes.

Wendelin Wiedeking’s "successful" theory undoubtedly reminds some of a similar one advanced by racer and journalist Denise McCluggage over forty years ago. McCluggage coined the term "success car" to describe the original Ford Mustang. An innovative, flexible, stylish new product at an attractive price point was not just a "successful car" but a "success car." Its aura of conquest seemed to rub off on its owners. Yet less than a decade before, FoMoCo was reeling from the failure of its GM-like divisional strategy, highlighted by the Edsel disaster.

Angus MacKinzie, writing in the September/October issue of Motor Trend Classic, points to the chicken-or-egg nature of building "success cars." He suggests that FoMoCo ignores the lessons of history–"It builds a winning vehicle, then simply milks it for all it’s worth, stripping cost and content until it’s so outdated and outmoded consumers just walk away." In other words, like a snowball collecting mass as it hurtles downhill, successful products make successful companies, which SHOULD then make more successful products. But in FoMoCo’s case, success tends to breed complacency and a return to crisis.

Whether a "Renault Alliance" could break this cycle and take on the Toyota colossus is an open question. But the initial reviews aren’t too promising. Nissan is not a formidable opponent for Toyota by itself. It teetered on the abyss less than a decade ago. Renault has shown a propensity for odd styling and failure in the U.S. market.

Moreover, history has not been kind to such marriages of desperation. Dr. Dieter Zetsche (www.askdrz.com) sits atop a company which includes the last vapors of a handful of American independents–Nash, Hudson, and Willys/Kaiser-Jeep. Nash and Hudson combined into American Motors in order to survive against the General Motors onslaught of the 1950s. AMC added independent Kaiser-Jeep to its corporate mix a decade and a half later. Kaiser-Jeep itself was born out of another 1950s merger between marginal marques.

While AMC did hang on for a couple of generations as the distant fourth in the "Big Four," occasionally producing a notable model or two – and even briefly taking on the Detroit 3 in motorsports as Motown’s attention waned from such pursuits – AMC never achieved the "success" nexus of product, customer and corporation that Porsche CEO Wendelin Wiedeking described. Thus, it’s not surprising that Dr. Z doesn’t seem too worried about who is romancing Renault-Nissan at the moment.

Would a Nissan-Renault-Ford link-up be a "successful firm" that produces "successful cars" that "successful people" want to drive? Or would it be another energy-diverting scheme–such as FoMoCo’s failed "investment" in Jaguar and the Premium Auto Group"-- that wastes whatever customer confidence is left in three faltering marques?

Don Leclair may be right that FoMoCo doesn’t need an alliance. But the real question is whether FoMoCo can survive one.

CLICK, CLACK AND THE 500-HORSEPOWER FORD MUSTANG

"Upwards of 200 horsepower is practically expected today. And there are cars with 300 h.p., 400 h.p. and more. In my humble opinion, that’s crazy. There’s not a car on the road that truly needs more than 200 h.p. Most cars would be fine with a lot less."

– Tom Magliozzi, co-host of NPR’s "Car Talk."

"We’ve gone horsepower crazy." Ray Magliozzi, co-host of NPR’s "Car Talk."

These opinions appeared in a syndicated newspaper column this week in major newspapers across the U.S.A. The Magliozzis, better known as "Click and Clack–the Tappet Brothers" hold themselves out to be "expert" automobilists to millions of unsuspecting "non-car" people in print, radio and on the internet. (See http://www.npr.org/templates/story/story.php?storyId=2100834 . See also http://www.cartalk.com/)

"Click and Clack" are a couple of aging MIT graduates from the 1960s hippie generation who parlayed their "Good News Garage" and Tom Magliozzi’s flare for marketing into a long-time auto repair and comedy gig on Boston public radio. Almost ten years ago, they became nationally-known through syndication.

Only in America can virtually anyone become an "expert."

Yet the Tappet Brothers are representative of that "automobiles-as-appliances" mentality which grips much of the elitist Coastal intellectual subculture in the U.S. (and all the little satellite pockets of it spread near colleges nationwide). The average "Car Talk" listener probably takes every syllable of the automotive articles in Consumer Reports (R) as the sine qua non on motoring. Similarly, Click and Clack seldom, if ever, recommend one of the Detroit 3's vehicles to any of their customers. They often wail on the profligate wastefulness of trucks and SUVs (of course there aren’t too many opportunities to haul hay, go rock crawling or tow a race car around Beantown).

But, as the lead quotes indicate, they save their sharpest criticism for anything that smacks of high-performance.

One only wonders what sarcastic vitriol they’d produce at the thought of Ford Motor Company’s 500-horsepower 2007 Shelby GT500. Or what one full-throttle blast in a GT500 would do to Click and Clack’s undoubtedly atrophied neck muscles–which are more tuned to putting around in "sensible" sub-200 h.p. economy cars while avoiding falling chunks of Boston's "Big Dig" fiasco (if their personal lifestyles match their rhetoric, that is)

Automotive News Executive Editor Edward M. Lapham (www.autonews.com) wrote this week that:

"Who in these United States would honestly prefer a wimpy car that can't get out of its own way, no matter how great the mileage is?"

Click and Clack seem to be the obvious answers to Edward Lapham’s rhetorical question.

Lapham continued: " Face it. Horsepower is like sex. Once you've experienced it, you want more. And you can't imagine doing without it."

Of course, this probably goes a long way in explaining the Magliozzi Brothers.

But let’s evaluate their argument.

Click and Clack’s opinions are rooted in the "appliance-motoring" community’s paternalistic worry over fuel economy. Their thesis is that the "horsepower craze" has deprived everyone of all the dreamy fuel-sippers the Earth-children hallucinated about when they buried a brand-new Detroit car on the first Earth Day back in 1970 (in between "rolls" in their psychedelic VW microbuses). Thus they probably represent the thinking of many "intellectuals" and other, lesser know-it-alls who believe they understand better than you do about what sorts of vehicles should be available to the general public.

(Think of this as the same sort of argument you got from the captain of the chess club in back in high school, who proudly scooted around in a wheezing VW Beetle or Fiat 124 or Geo Metro or bone-stock Honda Civic, while all the "irresponsible" kids hung out in V8 Mustangs, Camaros, GTOs and other "bitchin’" "hot rods, "muscle cars" or "tuner whips")

Click and Clack are correct that since the 1980s, increased weight in our cars and trucks has required escalation of horsepower outputs just to keep pace. Some of the weight increase is due to increased structural stiffness and the proliferation of active safety technologies (airbags, ABS, stability control, etc.), which actually improves safety over the willowy flyweight automobiles common in the 1980s. But Click and Clack correctly observe that much of the weight increase is driven by market demand for more luxury and convenience features.

Weight, of course, is a much greater enemy to fuel economy than horsepower. Not only is weight a larger influence on economy than engine output, it’s also ever-present. Horsepower potential, on the other hand, uses little extra fuel unless the "foot feed" is mostly or fully depressed (which is only about 3-4% of the time for most motorists). This ought to be obvious to anyone who has carefully studied the specifications of a 28-m.p.g. Chevrolet Corvette.

But in the modern context, is 200 horsepower the magic number, above which lies wretched excess? Could most cars safely get by with even less?

And why even 200? The aerodynamic efficiency of most cars and trucks is such that the "road load" is only about 15-30 h.p. in a steady-state cruise at highway speeds. In gridlocked, stop-and-go traffic, a five-horsepower riding lawn tractor could keep up.

And Henry Ford’s Model T only needed about 22 horsepower to put "America on wheels." Before the high-compression Kettering-style OHV V8 took over in the 1950s, American cars commonly had only 60-150 horsepower, while often weighing as much as two tons.

Could it be that even Click and Clack are also "crazy" about horsepower, albeit at a much more modest level? Or is the problem more complex than their simple sloganeering suggests.

Assume an average curb weight of 3300 pounds for a "sensible" sedan with enough interior volume for four American adults to comfortably travel more than an hour. If equipped with a 200 horsepower engine, the power-to-weight ratio is about 16.5 pounds for every horsepower. Such a car ought to be able to run a standing-start quarter mile in the low-fifteen second range at around 90-93 m.p.h. Zero-to-sixty will probably be in the 8-10 second range, depending on a number of factors.

Respectable, but nothing that will cause one to lie awake at nights.

But add in four 200-pound adults, a couple hundred pounds of luggage and 90 or so pounds of fuel and the power-to-weight ratio plummets to 22 pounds per horsepower. Quarter mile times may drop to as low as the seventeen second range, with the car struggling to reach the 80 m.p.h. mark in a reasonable distance.

Obviously, the loaded 200 h.p. car will be driveable, as such underpowered cars were in the 1970s. But the margin for acceleration in an emergency situation will precariously small. And many highway on-ramps and cloverleafs will have far too short of an acceleration area for this car to safely merge at the prevailing speed. This could force our loaded 200 h.p. car’s driver to take unnecessary risks, such as stopping at the end of the on-ramp or forcing his way into the flow of traffic at less than prevailing speeds.

That's hardly "fine," as Tom Magliozzi implies.

Add in another thousand pounds of weight (as would be common with a number of current models) and the problem just gets worse.

To live under a "200 h.p. or less" cap, automobile engineers would either have to sacrifice performance or dramatically cut weight. Both options have potential adverse consequences for safety, durability and consumer choice.

In the hands of a properly-trained driver, a high-performance car is safer than an underpowered schlub of an appliance. That’s because more power creates more options to escape from potentially-dangerous situations. A driver of an underpowered car can only swerve, nail the brakes, and hope for the best. If someone running a stop sign is about to t-bone you while you’re in the middle of an intersection, hitting the brakes may not be your best option. The "Blessed Mother of Acceleration" gives you another meaningful choice, as millions have already discovered.

Ask an experienced motorcyclist if a reserve of power is a safety factor or not, and listen to their responses. Of course the average modern motorcycle has a much "higher" (numerically-lower) power-to-weight ratio than any but the most exotic sports cars.

Moreover, a higher power-to-weight ratio gives a car more flexibility. Instead of having to "work" to keep up with traffic or to "make time" on a challenging drive, a more powerful car can allow a driver to arrive more refreshed and less fatigued. Over the course of a long motor trip, this may substantially increase the margin of safety.

A higher-power-to-weight ratio also makes a car more forgiving to drive. Low-powered cars require maximum attention to conservation of momentum in order to avoid unforseen bottlenecks and dangerously "getting hung out" in traffic. This is even more of a factor in manual transmission cars, which depend on the driver selecting the correct gear at the correct time. Sadly, not everyone pays full attention, and even the best drivers make mistakes. A more powerful car provides a reserve for a skilled driver to "drive out" of tense situations with minimal risks.

In summary, the choice as to whether one needs 200 or even 500 horsepower shouldn’t be made by bureaucrats, paternalistic environmentalists or even self-appointed know-it-alls babbling on public radio. It ought to be a market choice left up to consumers.

SELLING THE "BLACK BOX" AT FORD MOTOR COMPANY (R)

"I couldn't find a speed limit I liked in America."

Perhaps you’ve seen that commercial.

(Or maybe that’s what the Pac 10 replay official was watching when he was blowing two pivotal calls in last Saturday’s football game between the University of Oregon and the University of Oklahoma)

In that spot, one of the few and deep-pocketed -- a scruffy owner of a $60,000+ (including all additional dealer "greed" mark-ups) 2007 Ford Shelby GT500 -- boxed up his 500-horsepower steed and parked it on a container ship, seeking a quick blast down a German Autobahn.

(Not that the virtually unavailable GT500 really needs any advertising to sell, but then that commercial is about as close as 99.9% of Ford’s long-suffering performance customers will be getting to a new 500-horse Shelby in the "FORDseeable" future. But if you need more, see -- www.svt.ford.com. Just don’t fixate on how Mr. Scruffy is going to get his expensive GT500 off that six-inch-tall shipping pallet . . . . Now back to our story)

Or maybe you saw the one where the loyal son presents his dad with a restored Ford F-1 pickup, just like the one pictured in a faded photograph on the wall of the family homestead.

Or the spot in which an impulsive Ford Fusion owner pays for some dry cleaning of a stranger as a "pickup" gimmick. (Think the opening scene to "Fatal Attraction 2007" and you’ll get the idea of where this one’s likely to go . . . .)

Or perhaps you’ve heard the firestorm created by the spot chronicling a "liberated" soccer mom wheeling a Ford Freestyle and dumping her latch-key ex at the curb of his pitiful bachelor pad after a weekend of "quality" family time with the kids. (Who says Ford isn't pro-family . . . "in all its [disfunctional] forms?")

These commercials are part of Ford Motor Company’s "Bold Moves" ad campaign. George Rogers, CEO of the Detroit office of JWT (FoMoCo's ad agency for about 60 years), explained the theory behind it to the Automotive News this week. According to JWT, "A mass-market TV spot isn't the best place to educate potential buyers about 500-hp V-8s or towing capacity."

Really?

Instead, the "Bold Moves" campaign relegates the pesky automobile to a mere supporting role -- A prop in these bantam dramas. In fact, there’s almost nothing unique to any Ford model in these spots. After all, some potential stalker who goes around buying dry cleaning for strangers could just as easily be driving a Honda or Toyota as she could be whipping Ford’s Mexican-built, Mazda-engineered Fusion, couldn’t she?

Rogers also explained that all those technical details about brake rotor sizes, torque curves, curb weights and the number of cup holders can be better consigned to the back of an internet site for the wonks who will go to the trouble of seeking out such "inside trivia."

Don’t hold your breath waiting for a "Bold Moves" ad featuring some "car guy" geek bragging about how his Five Hundred has more rear seat room than a Toyota Camry.

"Don't think . . . Just light'em up, Kids," as another "Bold Moves" Mustang GT spot demonstrates.

In theory, why burden the buyers with such details about the features, functions and benefits of the product -- or even cerebral FACTUAL COMPARISONS between Fords and competing products -- when one can tell generic stories about how "cool" imaginary Ford owners are? Thus, the product is just a "black box," sold by the affective "boldness" of the make-believe customers FoMoCo places with it.

Rogers reportedly cribbed this philosophy from the Volkswagen of America "Drivers Wanted" campaign he directed at Arnold Worldwide.

But hawking something other than the product is not a new idea. Ever since the days of Cadillac’s famous "Penalty of Leadership" ad ( http://www.ciadvertising.org/studies/student/99_spring/interactive/manzano/mac/penalty.html) and Ned Jordan’s breezy "Somewhere West of Laramie" prose on the otherwise forgotten Jordan Playboy, copywriters have sometimes designed campaigns to sell intangibles about the marque or model instead of "sweating the details."

Here’s how such campaigns sounded eighty years ago . . . .

"SOMEWHERE west of Laramie there's a bronco-busting girl who knows what I’m talking about.
She can tell what a sassy pony, that’s a cross between greased lighting and the place where it hits, can do with eleven hundred pounds of steel and action when he's going high, wide and handsome.
The truth is-the Playboy was built for her.
Built for the lass whose, face is brown with the sun when the day is done of revel and romp and race.
She loves the cross of the wild and the tame.
There's a savor of links about that car-of laughter and lilt and light-a hint of old loves-and saddle and quirt. It’’s a brawny thing - yet a graceful thing for the sweep o' the Avenue.
Step into the Playboy when the hour grows dull with things gone dead and stale.
Then start for the land of real living with the spirit of the lass who rides, lean and rangy, into the red horizon of a Wyoming twilight."

(See http://en.wikipedia.org/wiki/Ned_Jordan)

Now THERE’S A "LASS" WHO DOESN’T NEED TO BUY ANYONE’S DRY CLEANING!

EPISODE 12: WILLIAM CLAY FORD, JR. AND ANNE STEVENS TALK ABOUT "WINNING ON SUNDAY"

Speedzzter has been hard on Chairman and CEO Emeritus William Clay Ford, Jr. and his minimal on-camera contributions to www.fordboldmoves.com

But in Episode 12, Bill Ford gets a large share of "face time."

Episode 12 is a strong argument for Ford Racing. Bill himself proclaims at a Ford racing rally that racing is the essence of Ford.

Of course, this is the same Bill Ford who assured everyone that he wasn't looking to replace himself as CEO. Right, Alan Mulally?

Episode 12 also recounts the oft-told story of Henry Ford and Spider Huff’s 1901 Grosse Pointe Match race with Alexander Winton (whom the Mustang marketing manager oddly suggests was the "John Force" of his day . . . who knew that John Force was a automobile manufacturer). Ford's success in the match race lead to the investments needed to start FoMoCo. (One gaffe in Episode 12 is footage of a steeply banked board track shown during the retelling of the "Sweepstakes" vignette. Henry's famous 1901 match race took place on a flat, unpaved horse track)

Episode 12 also features passionate quotes from some of Ford Racing’s NASCAR fans about technological transfers, Ford ownership, and how at least one of them wouldn’t even go to the track if Ford didn’t field entries (that guy must not have watched many races during the 1970s).

Team Ford Racing’s Number One fan, Bill Ford’s cousin, and FoMoCo Board member Edsel B. Ford II even argues for the conventional wisdom of "Win on Sunday, Sell on Monday!"

Of course, Episode 12 steers clear of how Edsel’s dad killed the World-beating "Total Performance" and "Muscle Parts" programs in November 1970, directly contributing to FoMoCo's malaise in the 1970s and Chevrolet’s unchallenged ascendancy in the "stock" and grassroots forms of American automobile racing (a fact Chevrolet won’t let us forget in trumpeting how many NASCAR manufacturers championships they won over the past three decades– even though it was by default during the first half of that span)

A guest column sidebar by NASCAR-phobic Autoextremist Peter M. DeLorenzo rips into the whole "sell on Monday" idea by pointing out how the retro-tech, funny-car NASCAR "Fusions" have virtually nothing in common with the slow, boring Fusions ordinary civilians can buy.

Of course, DeLorenzo seems to miss the whole point.

While NASCAR racing probably does build corporate morale and may, in fact, yield some process and technological benefits for FoMoCo engineering, NASCAR participation is about indirectly selling "the black box." The race cars are merely flashy, noisy, expensive, crash-prone "black box" props to the HUMAN drama. And it’s the inherent excitement and "coolness" factors of the humans participating that FoMoCo seems to believe will rub off on the Blue Oval’s products.

In The Right Stuff, Tom Wolfe broadly reviews our popular fixation with the idea of "single combat." From the days when the biblical lad David took slew the giant, to when Col. Chuck Yeager slew the demon that lived on the other side of Mach 1, and up to the present day, naratives which put individuals in deadly "single combat" against some hoard or superior force of nature tend to grab the human psyche. And although auto racing is a team sport, it's the "single combat" of the lone driver, battling "coolly" against both the hoard of other drivers and the ever-present risk of death, that becomes the Bold drama holding the attention of millions.

By sponsoring the conquering "hero" and providing him or her some of the tools necessary for victory (even if those tools are substantially different than what it sells all those street-bound Walter Mittys out in the Heartland), FoMoCo can bask in the reflected glory of conquest.

Moreover, FoMoCo wants to take advantage of the "brand loyalty" which racing fosters.

Seen in that light, Racing is not unlike the "lifestyle" dramas in Ford’s "Bold Moves" spots.

And similarly, it doesn't really make a whole lot of difference that the unobtainable 500-horse GT500 on that container ship dock isn't really very much like the ordinary "secretary's car" V6 Mustangs actually and affordably on sale down at your local Ford dealer.

Or so the theory goes.

Episode 12 also features one of the last "Ford" appearances of Anne Stevens, FoMoCo COO for the Americas. Stevens proclaims that FoMoCo will never abandon racing participation. But then the next day, Stevens abandoned FoMoCo for retirement, effective October 1. In a candid interview with the Detroit Free Press, Stevens opined "The company has too many layers, the company is too bureaucratic, and it takes too long to get things done."

It would seem that motor racing–which inherently requires lean, nimble, empowered organizational responses–hasn’t taught FoMoCo all that it could have.

But let’s all hope FoMoCo’s commitment to motorsports lasts longer than Stevens’s commitment to FoMoCo.

600 FORD MOTOR COMPANY (R) DEALERSHIPS TARGETED WITH "CHICKEN FEED"

The retail face of Ford Motor Company's paltry 14-15% market share target is slashing the number of retail outlets by 600, according to the Automotive News. www.autonews.com

FoMoCo's current "voluntary" consolidation plan apparently is a repackaged version of the "18 metropolitan market" reduction scheme first uncovered by the Automotive News on August 18, 2006. See http://speedzzter.blogspot.com/2006/08/ford-motor-company-pruning-of-dealers.html

This go-round will feature a $100,000-300,000 payment to the unwelcome surplus dealers. Or only about double of some of the reported worker buy-out payments.

That's "chump change." Or as one unnamed dealer put it in the Automotive News story, "It's chicken feed . . . Ford doesn't appear serious."

Given the huge investments required of FoMoCo's domestic brand dealers (even less than successful ones) in the large urban markets where FoMoCo believes it's overrepresented and the low-ball price offers expected from the "chosen" surviving dealers for the exclusive sales rights of the targeted dealers, a $300,000 make-up payment seems naive, if not insulting.

FoMoCo hatchet man Cisco Codina had the unenviable task of selling this leaden plan last Friday in a conference call to dealers. And he also had to assuage dealer fears about the FoMoCo corporate retrenchment: "you can expect a very high level of service -- we will be available to you."

The best reaction, however, to Codina's counterintuitive spin reportedly came from another unnamed FoMoCo dealer in the Automotive News report -- "There's a lot of fear behind the cubicles."

Indeed.

But there ought to be a lot MORE fear on main street in the targeted markets.

As Speedzzter suggested when the first version of this plan was announced, "Consumers and enthusiasts ought to think of it as giving the surviving dealers a license to steal." http://speedzzter.blogspot.com/2006/08/ford-motor-company-pruning-of-dealers.html

Imagine how uncompetitive your local FoMoCo dealer will be if he is the "exclusive" or nearly "exclusive" source in a market for FoMoCo's occasional "hot" model, such as the Shelby GT500. Even at the current numbers of dealerships, there is precious little price competition among Ford dealers on "non-commodity" models. FoMoCo adds to this problem by restricting supplies of performance cars in order to "keep margins high."

FoMoCo's anti-competitive actions also do virtually nothing to improve customer service. Will the contraction plan require the survivors to increase the number of service technicians and service bays to make up for those lost by the closing stores? Will they severely restrict service department backlogs? Will the survivors carry additional parts inventory? Given the justification for reducing competition is to increase store profitability, such increases in service are unlikely.

Ford's anti-competitive actions also signal that Ford is basically giving up on recapturing market share anytime soon. Fewer outlets equals less "shelf space" in the community and a reduced presence in the eyes and minds of potential buyers. If Ford sales were to turn around, the reduced dealer corps might be heavily taxed to keep up. And such increased demand would invarably lead to more of the dreaded "added dealer markup" on popular models.

Ford's anti-competitive actions also benefit surviving dealers who "gild the lily" with useless, overpriced dealer-installed crap. Some dealers can't resist gimmicks like paint sealers, pinstripes, and upholstry sealers. Others seem to think they are extensions of FoMoCo design by caking on hideous bolt-ons, such as brass-plated trim, plated fender extensions and "Conestoga-styled" vinyl tops. Giving such greedy jerks wider exclusive territories materially harms consumer choice. It also means that when such jerks run off prospective "ups" with their heavy-handed techniques and boorish service, consumers and enthusiasts will be more likely to switch to other brands rather than seek out an inconvenient competitor.

Fewer dealers also means Ford will get less feedback on product. Volume mega-dealers may not be as focused on chasing new market niches as smaller dealers who are closer to their customers and hungry for growth. Fewer voices will also be easier for the Glass House Gang to ignore.

Fewer dealers also means that the jilted ones will take their stores, their staffs and their experience to other brands. Undoubtedly, the "losers" will then have a thirst for "beating" Ford and the "inside" knowledge to do the most damage. Although the harmful and anti-competitive trend toward consolidation of dealerships in the hands of a few huge dealer "groups" may have reduced this risk somewhat, most likely it will be the remaining "independent" dealers who bear the brunt of FoMoCo's forced consolidations.

FoMoCo's sales problem ought to be fixed by increasing consumer access to the models and optional equipment that are in demand and creating more "in demand" models, not by anti-competitive measures.

Given modern "just in time" computerized inventory technology, Ford customers ought to be able to order new cars equipped exactly as desired in an abbreviated time frame for a competitive price (just try to special order anything now and see how unhelpful dealers groomed on "if you can see it, sell it" can be).

Detailed dealer inventory ought to be easily searchable for free by consumers on the internet in a national database that can accomodate searches for specific options, and any dealer ought to be able to retail any new vehicle in any FoMoCo dealer's inventory merely by paying FoMoCo for it plus the floorplan costs and a small transaction fee to the holding dealer (and such costs should not be subject to negotiation among the dealers).

A European-style "factory delivery" program ought to be aggressively promoted as well--such a program can protect dealers by requiring the purchase transaction to be through an authorized dealership.

And while FoMoCo needs to enforce strong minimum standards for customer service, Ford ought to allow dealers competitive flexiblity for innovations, such as satellite lots, diversity in locations, untraditional distribution channels, smaller and more diverse facilities, and additional freedom in fixtures, signage and "brand image" materials. Part of the reason some FoMoCo dealers lose money is that they are being forced by "factory standards" into unnecessary investment in a bloated, expensive and obsolete business practice model. Fewer dealers will produce no benefits for FoMoCo's "ultimate" customers and will likely yield great harm to enthusiasts. Cutting outlets is a "Bold Move" destined to hurt, not help Ford's loyal customer base.

IDLENESS AND THE "WAY FORWARD" AT FORD MOTOR COMPANY (R)

Acceleration of the "Way Forward" plan to turnaround Ford Motor Company is hardly a secret. But the numbers and details are staggering.

-- One-Third of the North American Salaried workforce slashed.

-- Buyout offers to FoMoCo’s entire hourly workforce.

– Six top executives rumored to be out.

-- A Twenty-Six percent reduction in manufacturing capacity.

-- Plants "idled" (in other words likely lost forever) in Maumee, Ohio; Essex, Ontario; Nofolk, Virginia; Atlanta, Georgia; "Twin Cities," Minnesota; Wixom, Michigan; Windsor; Batavia and all the old Visteon parts plants now held by FoMoCo’s Automotive Components Holdings.

And buried deep within the press release (http://www.autonews.com/apps/pbcs.dll/article?AID=/20060915/FREE/60915003/1111&refsect=&template=printart) is a goal to find profitability at only a FOURTEEN to FIFTEEN PERCENT SHARE OF THE U.S. AUTOMOBILE MARKET!

The contrasts between now and those days long ago when thousands stormed the Highland Park Model T plant in search of Henry Ford’s Five-Dollars-a-day wage couldn't be more stark!

Sure, there are a few nuggets among the rubble. Lincoln Town Car will live a while longer, built along side its Panther cousins on a single shift at St. Thomas, Ontario, Canada (although FoMoCo will probably continue to starve it as a way to boost the new Lincoln "flagship"–the repackaged Volvo built in Chicago to be known as "MKS" (a/k/a the "MistaKeS")). A third shift will be added to William Clay Ford, Jr.’s environmentalist "dream" plant at the River Rouge complex in Dearborn. FoMoCo will tap some "B" and "C" class platforms not currently offered in North America.

But when the details are stripped away to the plan's essence, the accelerated Way Forward amounts to amputating the one-quarter to one-third of FoMoCo no longer seen as meaningful or necessary. If the "Ford Family" analogy has any basis in fact, then this plan is simply a grand divorce . . . a disinheritance for many of those who invested their lives into the Ford Motor Company.

For some, perhaps it’s a dramatic moment of choice– a bit like the apocryphal legend of Lieutenant Colonel William Barret Travis drawing a line in the sand at the Alamo. Those who accept the "Way Out" instead of staying to fight, and perhaps to "die" with FoMoCo, are the ones who lack the youth, vision and commitment to trust in the "Way Forward." They are the ones who would rather stay in their dying communities rather than move where the jobs are. They are the ones who see a quick opportunity to "cash out" and move on. "We don’t need them anyway!"

But the reality isn’t that simple.

Not everyone who eases out the door forever will actually have been dead weight. Not every voluntary reduction will create a net improvement to the institutional vision of FoMoCo. Not everyone who will be shown out, should be. And not everyone who should be shown out, will be. Such is the imprecision of self-selection, augmented by the monetary temptation of an incentive package.

Still, it all boils down to paying for idleness: "idling" resources and paying people for not working.

The idea of paying people for not working is a relatively new one in the arc of human history. Much of the great literature of the World and sacred teaching cautions against such idleness. It dulls the mind and rots the body. It wastes time and produces no benefits for the community. It’s a drag on progress and an empty consumption of resources.

While some of the 14,000 salaried and thousands of hourly workers divorced from FoMoCo will use their "road stakes" to start new lives, many others will sink into non-productive cycles of decline. Stripped of their lives’s work and declared surplus, these former employees will escape this failure any way they can . . . spending hours drinking and remembering former glories . . . wandering about franchised America in a recreational vehicle . . . "puttering" around the house. Many won’t even realize the utter folly of this, believing that they are "happier" now that FoMoCo is in their rear-view mirrors.

And others will list about in the post-industrial age, hopping from low-wage service job to service job, never fully recovering the vocational power of contributing to a legendary Fortune 5 enterprise. Some will grasp at dreams for independent small ventures or even new professional careers, subconsciously realizing that the entrepreneurial era of Henry Ford has forever been replaced by the domination of multinational corporations, except at the fringes of our technological world, and that they will never have the opportunity to be part of an automaking enterprise again.

A rare number may jump sides, taking up with the Japanese invaders or the Germans or even the Chinese. Life for them will then become the struggle of a spurned confidant, obsessed with "beating Ford" instead of nurturing it.

Perhaps a few of the divorced will wonder about what might have been. Some of them will never be able to shake the sadness of what we’ve lost as a company, an industry and as a nation. Some of them will comfort themselves with endless theories as to where FoMoCo’s wheels fell off and how they would have fixed it. Yet the irony is that in a massive, complex organization, most of these discarded employees never had sufficient influence to make much of a difference anyway. However, to the extent the self-reflective come to understand how they may have personally slacked off, gamed the system or asked for more than a reasonable share of the bounty, they will personalize FoMoCo’s failure as a failure of their own.

The "Way Forward" is an amputation attempting to solve a malady wrought from the proverbial "thousand cuts." For all the analytical pontificating, it’s hard to identify exactly when FoMoCo had the last clear chance to avoid this moment. The truth is that this day is the aggregation of many bad days, wherein many wrong decisions altered the course of FoMoCo and its competitors.

Would things have been different if William Clay Ford, Jr. had not assumed too much responsibility? Or if Bridgestone’s tire defects hadn’t lead to all those lawsuits? Or if Jac Nassar or Red Poling hadn’t risen to the top? Or if the 1996 Taurus had carried through the sales momentum the 1980s? Or if FoMoCo would have taken decisive action to stop the loss of share in the automobile market a decade ago? Or if FoMoCo hadn’t wasted energy and focus trying to diversify with the Premium Auto Group? Or if the SN-95 Mustang hasn’t been delayed so long? Or if FoMoCo had stayed aggressive in expanding market share back when it was the envy of Detroit, if not the whole automotive world in the mid to late 1980s?

Some will look back even further. Was the unforeseen turning point when Henry Ford, at the top of the automotive universe, failed to see the wisdom in William C. Durant’s market segmentation idea? Or when Henry failed to recognize the genius in the FoMoCo alumni who went on to populate the top ranks of nearly every U.S. automaker? Or when Old Henry didn’t fight back enough against General Motors gaining hegemony? Or when he didn’t unfetter Edsel Ford’s aesthetic and creative vision? Or when he allowed labor relations to sour into confrontation, violence and a permanent "management versus hourly worker" contest? Or when he hung on too long to his power and his obsolete ideas, such as mechanical brakes, beam front axles and transverse "buggy" springs?

Could it have been when the U.S. automakers didn’t demand the economic spoils of World War II and went along with protectionist practices in Japan and Germany? Could it have been when they didn’t take the import threat seriously? Or when they didn’t force the U.S. steel industry to modernize and cut costs? Or kept agreeing to unsustainable health care and "legacy" costs in successive UAW agreements? Or when they failed to provide a sufficient variety of quality subcompact models to stem the Japanese invasion? Or when they stopped aggressively developing new suspension and engine technology in the 1950s, conceding the technological headlines to the Germans and later, the Japanese? Or when they allowed billions in unfunded mandates to be slapped upon them through the Muskie Clean Air Act, safety regulations, and products liability litigation? Or when they didn’t respond aggressively enough to the first or second Middle Eastern Oil embargos? Or when they failed to develop workable responses to the propaganda of the "consumer" movement?

Although the pundits, the academics and the analysts will fell a forest of trees in publication of their respective theories as to the "causes" of FoMoCo’s fall from the top to a marginal Fourteen percent (or less) player in the Automotive market, we cannot know exactly when the downward arc began. We cannot determine with scientific certainty exactly how we let the Japanese and the Germans accomplish without a single shot what their mighty air and sea armadas of six decades ago could not.

What we do know is that probably thousands of cuts have now lead to a GIANT ONE of a different kind. And that idleness, while it may be necessary to save FoMoCo now, is a great waste of human potential in the long run.

JAGUAR IS EMBLEMATIC OF FORD MOTOR COMPANY'S PROBLEM

Guido Reinking, editor for Automobilwoche, offers pointed commentary on Ford Motor Company (R) and its "failed" stewardship of Jaguar at www.autonews.com.

In a column entitled "Acts of Desperation in Dearborn," Reinking observes "Including the purchase price, the automaker has so far sunk $10 billion into Jaguar. At today's share price, you could buy the entire Ford company for $15 billion."

That comparison puts everything into perspective.

Jaguar is a microcosm of what's wrong at FoMoCo. It has failed to keep up with the market. It has failed to adequately build upon its heritage and its essence (except perhaps with the F-Series, the Mustang and the Ford GT). It has failed to lead. It has failed to meet enough customer needs for performance, fuel economy, style, functionality and quality. It has failed, in many segments, to provide innovative, world class products at prices ordinary people can afford. It has been diluted and stripped of its vigor, being reduced to cribbing from its foreign "partners."

Yet Ford's failures profoundly transcend the Jaguar example. It has failed to tap into American nationalism as a strong force. It has failed to protect American industrial power and its own workers. It has chased thousands of jobs offshore, while its competitors continue to invest in American production resources.

Reinking, of course, gives his own litany of what "ranks among the most blatant examples of mismanagement in the history of the auto industry." On Jaguar, he concludes "It's an absolute shame what Ford has done to this great brand, with its tradition of breathtaking cars such as the E-Type and racing successes at Le Mans."

While some may find these pointed words harsh, Reinking cuts to the heart of the matter. If FoMoCo had the answers for running Jaguar, surely they would have become apparent by now.

Reinking then takes aim at William Clay Ford, Jr., saying the : "overtaxed great-grandson of Henry Ford . . . at least recognized his failure."

Reinking also backhands the critics of hiring Alan Mulally as CEO, arguing that claiming Mulally "knows nothing about cars" is meaningless because "His predecessors at Ford apparently didn't, either."

Such candid observations from an industry journalist--albeit a foreign one--undoubtedly shock the tender sensibilities of the Glass House gang, if not the whole of Old Detroit. Still given the reports in Automotive News, Reuters, and the Detroit News that FoMoCo is projected to lose as much as NINE BILLION DOLLARS this year (including losses on automotive operations of "$5.6 billion to $5.9 billion, according to a Sept. 6 internal report prepared by CFO Don Leclair's office . . . ."), it is way past time for some straight talk about the disasterous Bill Ford era.

While some may see Reinking's column as "piling on," he is to be applauded for telling it as it is. Now if the "Way Forward" could be founded on such candor, perhaps FoMoCo stake holders could more realistically anticipate "a Ford in [their] future[s]."

BRILLIANT DRAG RACING PERFORMANCES WITH FORD PRODUCTS

On a more positive note, the November 2006 issue of Muscle Mustangs and Fast Fords (MMFF) reports that Erica Ortiz became the first woman in Fun Ford Weekend history to cross the SIX second and 200 m.p.h. barriers in that series’s quarter mile drag racing competition. See MMFF at 48.

Ortiz’s historic run came at the Fun Ford Weekend event in Norwalk, Ohio, where her 1986 Ford Thunderbird ran a 6.88 second elapsed time at 205.9 m.p.h.

Her Thunderbird featured a Al Moody-built "STOCK [BLOCK] 460" enlarged to 498 cubic inches, FRPP Super Cobra Jet heads and a pair of 76mm Innovative turbochargers.

FoMoCo’s support for Fun Ford Weekend, which makes efforts such as Ms. Ortiz’s historic run possible, is to be applauded.

MMFF also reported that David Wolfe’s Fox-body Mustang has run in the sevens at 197 m.p.h. in the quarter mile at Ford World Challenge 9 on DOT-approved drag radials. See MMFF at 90. Wolfe’s 3,229-pound hatchback features the full line of his own "Wolfe Race Craft" suspension components and a huge 106mm turbocharger on a 382 Windsor small block (using an aftermarket DART block and TFS "R" heads.

Both Wolfe and Ortiz represent the hundreds, if not thousands, of diehard Ford racers who are promoting Ford performance, mostly without any direct assistance from FoMoCo. Even in the light of all FoMoCo’s problems, we ought to never lose sight of the contributions that grassroots racers and hot rodders have and are making to the brand. Ford's fit of cost-cutting must not sacrifice its participation, albeit sadly limited, in supporting grassroots motorsports.

DOES IT MATTER THAT FORD MOTOR COMPANY'S NEW CEO ISN'T A "CAR GUY?"

There is more than a little debate in cyberspace about whether new Ford Motor Company (R) CEO Alan Mulally is a "car guy."

First, we'd better define terms. Operationally, a "car guy" is someone who, in the words of Barry Meguiar is "certifiably car crazy." In other words, to a "car guy," motor cars are not just some sort of "widget" or unit or "inventory" for production and sale. To a "car guy," automobiles are functional, mechanical works of art and science. They are vital, dynamic and exciting expressions of human creativity. To a "car guy," even the most prosaic form of automobility represents something greater than a mere appliance of personal transportation. A true "car guy" would be involved, if not consumed, by cars, even if it wasn't a paying vocation.

Moreover, a true "car guy" holds the broad perspective of the grand sweep of automotive history. A car guy is cognizant of how the state-of-the-art is developing, not in the abstract, but in how real people have and will experience motoring in their diverse lives. Thus, a true "car guy" can appreciate--in context-- the timeless, elemental simplicity of a Ford Model T or the oddly grotesque brutality of Henry Ford's 999 racer, as well as the hypertechnical zeniths of a modern Formula One car or Audi's world-beating R10. A true "car guy" can be absorbed by the "classics" at a world-class Concours 'd Elegance as well as being gripped by the human-mechanical drama of a Saturday-night short-track race or the surreal promotional hucksterism of an international auto show.

A true "car guy" is experiential in nature. A true "car guy" would rather delve into mechanical bowels of some odd, nearly extinct footnote to automotive history rather than attend all the high-brow society cocktail parties in the world. A true "car guy" would rather stand on the moist, blistering salt plains of Bonneville during Speed Weeks, watching for the fleeting glimpse of another unknown privateer making a class record run than watch Tiger Woods at Augusta National. A true "car guy's" calendar is punctuated by the universal holidays of automobility: Indianapolis, Monaco, Daytona, Sebring, Goodwood, Pebble Beach, the Woodward Dream Cruise, Meadowbrook, the Detroit International Auto show, and many, many other quasi-spriritual experiences of automobility. A true "car guy" revels in the lore, collected wisdom, history and anecdotes of motoring's past and present. He has a sufficient frame of experiential reference to integrate new experiences and organize them into their proper contexts.

A true "car guy" seeks out the great adventures of motoring: The Autobahn, the Pacific Coast highway, Old Route 66 and thousands of other "good" roads across the globe that beckon. Road trips are not marked by time or even destination, but rather by time spent imbibing the essence and inherent freedom of automobility. The sights, sounds and sensations of taming a responsive machine over a challenging bit of tarmac rivals the height of human adventure. Denise McCluggage--a brilliant "car guy" in her own right--once wrote about the essence of motoring as connectedness and the "centering" of one's physical core in complete synchronicity with the machine and the road.

A true "car guy" feels the aesthetic beauty of design. The simple contour of a fender or the perfectly-weighted resistance of a properly designed switch triggers the sort of informed enjoyment that others receive from a great poem or celebrated prose. The efficient rhythms of a complex valve gear or even the steady beat of an assembly line resonates in the true "car guy" as much as the rhythms of nature speak to the naturalist. The tuned sound of a sports car engine or the hushed, isolated tones of a fine luxury touring car are simply symphonic to the true "car guy's" ears. The aroma of fresh upholstery, the gleam of polished aluminum, the glint of carefully creased, formed and finished steel, the glassy smoothness of varnished wood inserts, the woven texture of carbon fiber, and the pebble grain of cast iron all enchant a true "car guy's" senses.

The intellectual theme that knits together these disparate experiences for the true "car guy" is the deep well-spring of intellectual, aesthetic and visceral attraction to the machines, the technology of them, and the people who make, use, modify, restore and conserve them.

But to be a "car guy" in a position of power at an automobile concern, one cannot be simply an enthusiast, a dilettante, or a frustrated Walter Mitty, opining ad nausium from his soapbox.

A "car guy" with power must channel the sum of his specialized knowledge and wisdom into forms which create maximum sustainable value for his customers, while advancing his chosen art. He can no more be a perfectionistic, technological snob any more than he can be a hidebound technological Luddite. He must be internally driven to "democratize" and downsize new technologies and make them practical, if not wholly transparent to the masses who have varying levels of interest in and commitment to automobility and the interworkings of it. He cannot be so enthralled by technical complexity that he misses the beauty of simplicity. He must hold sacred the trust placed in him by all the stakeholders--customers, dealers, technicians, designers and all the rest--to produce the best possible motor car at the best possible price which meets the needs of the targeted market. He must be parsimonious with those things that detract from the motoring experience and be generous with those things that elevate it--all within the constraints of constructing a sustainable market. He must be sensitive and creative in finding new niches and new markets. Yet he can never slip into the commodity mentality which views products, market segments or the people involved in them as disposable. He must strive to create milestone products within the crushing constraints of budgets, regulations and time. He can never sit still or be satisfied with what's been done.

Now for the application of our definition.

Richard Jensen, staff blogger at www.blueovalnews.com, apparently disagrees with the criticism of Alan Mulally as "not a car guy" See "Cabin Assignments on the Titanic" at http://blueovalblogs.com/blogs/?p=61

Jensen argues, "Well, the verdict is in on Alan Mulally. He’s officially not a ‘car guy’."

Sarcastically, Jensen belittles the concerns of the commentators on Mulally's lack of demonstrated "car guy chops:"

"Still, you get the sense that among the chattering classes, at least some of them, there would be a different take if it was discovered that Mulally had rebuilt a GT 350 in his spare time, or a Jag E-Type, or even (gad) a 396 Chevelle."

"Then you’d have something. This, ladies and gentlemen, would be a car guy!
We wouldn’t feel so uncomfortable about him taking the reins of Ford Motor, we wouldn’t wonder about his ‘chops’. . . . "

"Man, Alan Mulally is such a non-car guy it’s not even funny.

Why, the guy even wants to be a car guy.

And nothing keeps you from being a car guy, quite like wanting to be a car guy. You think Carroll Shelby ever asked to be a car guy?"

Jensen, for all his cleverness, misses the crux of the concern. The open question is whether Mulally will have sufficient experience and sensitivity on a broad enough basis to ask the right questions, demand the right answers, find the salient truth, and knowingly evaluate results.

These aren't skills one can develop without direct experience.

They aren't on the curriculum at MIT or the University of Kansas or any other business school.

And they aren't universal skills possessed by all engineers. What's more, the personal drive to be a "car guy"--while it can be triggered and nurtured by experience at any point in life, is probably not the sort of thing that can be instantly injected in sufficient quantities to make one a wise, competent oracle for directing a huge enterprise such as FoMoCo.

Jensen then proffers a neo-Manichean view of the automaking world:

"For those of you that aren’t ‘up’ on things, car companies contain two kinds of people (well, aside from the secretaries), ‘bean counters’ and ‘car guys’.

Bean counters are bad, and car guys are good.

You need to understand that to get anywhere in Detroit."

Jensen is correct to the extent that Detroit automakers are populated by those who believe cars are widgets to be whacked out at the greatest possible speed and the lowest possible cost per unit and those who take the responsibility entrusted to them as automakers a bit more personally and seriously. Of course, automakers are populated with a wide continuum of people: non-car guys, psuedo-car guys, emerging car guys, parochial car guys, fake car guys, dreamers, megalomaniacs, and even the rare "true car guy." Ninety-nine percent of these folks will never have the opportunity--nor should they--to operate an auto manufacturer. But to elevate a widget-maker, or even a myopic engineering generalist, to oversee the whole works is a formula for disaster.

Jensen reasons that: "The customer is king, and Alan Mulally is Ford’s first ever customer CEO. He’s the first CEO at Ford that hasn’t spent the last 20 years at least driving Ford cars that were generally provided as part of his pay.
Sure, Ford’s executive VPs know that other car companies exist, and they may have even, on rare occasions, driven their products or perhaps ridden in them."

Jensen is correct that far too many Detroit managers are wholly out of touch with the real world--such anecdotes as the senior managers who drive only motor pool vehicles stored in heated garages and never actually buying a vehicle feed into this perception. But the simple fact that Mulally's only known automotive history is as an infrequent purchaser of "soulless" Japanese luxury cars demonstrates nothing about his ability to see the broad spectrum of the market or to distinguish between the temporary fads and the long-term trends, or to even properly evaluate the real-world performance and functionality of types of vehicles he's never considered or experienced before.

The answer isn't in just hiring a successful outsider who knows something about engineering and business management, as well as how to buy his own new car. The answer is, in part, in identifying and championing those rare individuals who truly "get it." The leader of an automaker must have a discriminating eye, an informed touch behind the wheel and a gutsy mind attuned to the complex "sausage making" that is the modern new car business. Nothing known so far about Mulally suggests he's developed the kinds of relevant experience to accurately master the intangibles possessed by a "car guy" in charge. Thus, it's uncertain whether Mulally's "way forward" will crash on the shoals mediocrity or the become beached from misperception of the necessary products, niches and competitive market expectations.

Jensen then blasts the conventional wisdom of learning from ones forebearers:

"Alan Mulally has never stood in the shadows of Henry Ford, W.P. Chrysler, Alfred Sloan, Harl[e]y Earl, Billy Mitchell, Ernie Breech, the ‘Whiz Kids’, Hank the Deuce, Bob Gregorie, Lee Iacocca, Zora Arkus-Duntov, or even Virgil Exner."

Certainly, while this means he may have a fresh perspective, it also means that he may be unaware of the mistakes and successes of these men, or of their values or their decision making processes. As the cliche' goes, he who is not aware of history is doomed to repeat it.

Jensen correctly observes that "Nobody ever told him it was disloyal to buy a Toyota. He hasn’t grown up in an environment that has up ’till recently held that small fixes were all that was required, that the imports are a momentary aberration, that the whole world hasn’t changed outside Dearborn and Auburn Hills."

But Mulally's lack of Motor City myopia doesn't translate into the sort of balanced, knowledegable objectivity necessary to envision where each niche, market and submarket served by FoMoCo ought to be going. It doesn't suggest Mulally has the knowledge or the skill to develop world-class automobiles. Nor is an outsider's perspective sufficient to help Mulally locate those in FoMoCo he ought to listen to and those who he ought to disregard.

The advantage of our hypothetical "true car guy" is that he's got sufficient prior experiences relevant to automobiles that he can integrate objective and subjective data and know when he's being "sold a bill of goods." That is the essential test of education in any discipline. And it's the critical skill that cannot be shortcut, faked or avoided in a top manager.

Jensen concludes by arguing "Sticking to antiquated ways of approaching the business, where products are made to fill plants (bean counters) or because they’re cool (car guys), will only push Ford, and Detroit closer to the brink. Without turning this company’s focus outward, there will be no long-term revival of Ford Motor Company."

The problem with this oversimplified analysis is that a "true car guy in charge" is all about giving as many people as possible that "a ha" moment of satisfaction in motoring. He recognizes that in systems as complex as an automobile, that there are literally hundreds of compromises which can aggregate to create a mishmash and a miss. Thus, he uses objective and subjective benchmarks to stretch the limits and to cotinuously improve products. He looks at the long term effects of decisions, including how certain features will affect the brand in discrete, insular subcultures, in the various "car guy" niches and even ten or fifteen years down the road-- when some "newbee" is receiving his first taste of the brand through an old hand-me-down. He's also aware of the place that product and production decisions will have the history of automobility, always seeking to create new milestones and vehicles with timeless, enduring value. But he's also fully aware of the limits of the market and the technology, even as he strives to lead the industry forward.

Building a wide variety of vehicles for a diverse, competitive marketplace isn't a job for the faint-hearted. It's also not a forgiving job. It doesn't cotton to "do overs" or on-the-job training. It requires a brilliant engineer/technician/artist/designer/business person who never loses sight of the essential details nor the big picture.

While it's encouraging that Mulally has studied statistical quality systems and team approaches to problem solving, merely being a successful manufacturing guru from a highly technical, but materially different discipline may not be enough to lead Ford out of its decades of decline. Nor would it be a guarantee if Mulally was a "car guy." But perhaps the Way Forward wouldn't be so uncertain and fraught with peril if he were.

STABILITY CONTROL AT "AMERICA'S CAR COMPANY"

Stability control for the "Way Forward" is big news at Ford Motor Company (R).

The most obvious kind is FoMoCo's flirtation with Electronic Stability Control (ESC) for its vehicles. www.paddocktalk.com reports that FoMoCo will add electronic stability control to all its domestic-branded vehicles by 2009. ttp://www.paddocktalk.com/news/html/modules.php?op=modload&name=News&file=article&sid=41216

ESC uses gyroscopic sensors to measureyaw and roll movements, and then intervene electronically in vehicle control. FoMoCo claims ESC "offers additional confidence to drivers in emergency situations by helping them stay on the road and avoid accidents."

“This is an acceleration of our plans to standardize safety features and is in line with our goal to be America’s car company,” acording to FoMoCo group vice president, Product Development, The Americas, Derrick Kuzak. He also said that making ESC standard is motivated by “That commitment and an intense customer focus at the heart of the Way Forward plan . . . ."

Of course, it may also be motivated by FoMoCo's desire not to be the American Trial Lawyers's favorite car company. FoMoCo has paid dearly at the hands of these Lexus, BMW, Mercedes and Bentley-driving legal pirates, who gamble huge sums in contingency fee cases in the hope of hitting a monster payoff as the purported "remedy" for some product liability fault in Ford-built vehicles. These lawyers, and their cadre of paid experts, often claim FoMoCo's failure to take simple, technologically-feasible "remedial" measures, such as ESC, could have foreseeably prevented their clients's traffic accidents. Many times, they indignantly waive a "smoking gun" memorandum before spellbound juries, containing the thoughts of some subordinate FoMoCo engineer on the practicality of some new "fix" for a safety concern. These lawyers also manage to misdirect the juries away from any driver culpabilty in the crashes at issue, placing all the blame squarely on FoMoCo.

So cynically, the ESC decision may be more about "stablilty control" of future products liability litigation than it is about some wishful thinking about being "America's car company."

Erin Mays at Autoblog opines that FoMoCo's move is simply in anticipation of federal action to require some sort of "stability control" in all light vehicles. http://www.autoblog.com/2006/09/13/ford-plans-on-making-stability-control-standard-on-all-models/ In the context of environmental handwringing and proposed increases in government regulation of safety and emissions concerns, to some this undoubtedly seems like a reprise of the prelude to the 1970s--the most disasterous decade in American automobile history since the Great Depression!

Meanwhile, the Automotive News is reporting that Toyota Motor Corporation's vice president of external affairs, Irv Miller is predicting the that Toyota's current 11 percent increase in car sales and 8.5 percent increase in truck sales will not be sustained in 2007. www.autonews.com Miller sees only a 3 to 5 percent sales increase nextyear. Miller said, "I don't believe that anyone in our organization believes it's going to be in the 10 to 12 percent range that it has been in the last couple of years."

All of this lowering of expectations comes in the context of Toyota's high profile move into NASCAR Nextel Cup competition, the opening of Toyota's new Texas truck plant (visited by FoMoCo in Episode 11 at www.fordboldmoves.com), a new Tundra pickup, no sign of abatement in demand for the new Camry, and a full line of trendy hybrids in Toyota's Lexus brand.

While some may conclude that Toyota's low-ball prognostication is simply from jitters about the recent decline in U.S. gasoline prices -- which when moving higher likely "pulled forward" some of the market shift to Toyota brands -- the cynic figures that such faux modesty is nothing more than a smokescreen to obscure Toyota's juggernaut pass General Motors as the world's largest car company next year. So much for aspiring to be just "America's car company."

Back at FoMoCo, the board is meeting today to begin consideration of the latest corporate "stability control" plan. According to the Automotive News and the Wall Street Journal, the latest cost-cutting scheme seeks to "lower white-collar costs by 30 percent" and will also "include cutting jobs and benefits." The newspapers report that the FoMoCo board will also look at "a new pricing strategy designed to narrow the gap between sticker prices and transaction prices in vehicle sales."

Presumably this latest plan is the byproduct of the pre-Alan Mulally era, although Mulally's cost-cutting expertise may be evident in the fine-tuning.

Shrinking FoMoCo's non-union workforce and "transaction pricing" are simply low-hanging fruit for the budget cutters. Abstractly, both look like good "stability control" moves to stop the River Rouge of ink flooding the corporate ledgers.

And slashing the white-collar work force undoubtedly will prune some dead wood. It may even reduce the number of "smoking gun" memos that so electrify FoMoCo's many trial lawyer parasites.

The real question, however, is whether these cuts will provide real, long-term "stability control" by facilitating reductions in bureaucracy and increasing empowerment of FoMoCo's few visionaries who truly understand the product mix, performance, quality, features and pricing essential to any real "Way Forward." Or will these dispiriting moves trigger essential, productive and creative workers to abandon FoMoCo. If so, these budget cuts will further destabilize FoMoCo.

The goal of a leaner management corps is just the latest twist in controlling the FoMoCo behemoth. Henry Ford privatized the company during the Model T's dominant run as a means of solidifying his control. Then he created a chaotic, disfunctional organization that depended on him and declined almost in lockstep with his increased personal frailty.

When Bill Ford's grandfather, Henry Ford II, took the nearly bankrupt mess over, he believed "stability control" meant copying the complicated, hierarchal GM managment system. Thus began the development of the massive FoMoCo bureaucracy.

In the October 2006 issue of Mustangs and Fords magazine, a writer comments that FoMoCo operates like a huge train: it takes a long, long time to get it moving and it takes even longer to get it to stop.

The balance that FoMoCo must find is between the chaos of Henry Ford's FoMoCo and the stultifying bureaucratic inertia of Henry II's FoMoCo.

And just as ESC doesn't really know the difference between an intentional, fun, controlled maunuver and a potential disaster, FoMoCo's "stability control" budget axe may not discriminate between the good and the bad.

And don't expect all this economizing to pay dividends for low profile niches, such as SVT, FRPP and Ford Racing. These underappreciated and misunderstood "fun" programs probably seem like luxuries to those focused only on short-terms stock price boosting and feel-good pabulum like "Driving American innovation" and "America's car company."

It's curious that FoMoCo aspires to being "America's car company" by slashing American jobs while repackaging Swedish and Japanese designs, the most popular of which are assembled in Mexico. That's a strange vision for winning over "America" indeed.

"HERE I AM . . . ROCK YOU LIKE A . . . BOSS?

"Hurricane" is out and and the Boss is back . . . for now.

According to the Detroit News, Ford Motor Company's on-again Hemi and LSx fighting V8 is now referred to as the "Boss." http://www.detnews.com/apps/pbcs.dll/article?AID=/20060912/AUTO01/609120382/1148

Originally nicknamed internally as the "Hurricane," FoMoCo's sensitivity police have concluded that in the wake of Hurricane Katrina, the Huricane moniker is just too insensitive.

R-i-g-h-t.

Of course, "Boss" has a short, brilliant FoMoCo history which has nothing to do with trucks. Back in 1968, when GM-ex Bunkie Knudsen was rampaging through the Glass House "like a hurricane," someone on Bunkie's team decided that the new Chevrolet Z/28-fighting Mustang model loosely based on FoMoCo's latest 5-liter SCCA Trans-Am competition coupe should have a hip, catchy name. Another ex-GMer at FoMoCo--designer Larry Shinoda (who incidentally has his hand in such milestones as the 1963 Corvette Sting Ray and the original Z/28) was charged with cooking up a unique look for the new "Trans-Am" Mustang. Shinoda pitched the model name "Boss" in homage to his Boss--Knudsen. Shinoda explained he already called Knudsen "the Boss" and that the name seemed to fit the competition pedigree of the new Mustang.

The Boss 302 became a FoMoCo legend, based on its "boss" looks and its nearly bulletproof canted-valve five-liter engine (which featured numerous other upgrades over the ordinary 302, such as four-bolt main caps and a forged crank, in addition to the generous "Cleveland-style" heads).

The Boss 302 soon had a big brother: Boss 429. Before the Boss 429, FoMoCo raced NASCAR stock car competion with somewhat exotic variations of the FE 427 engine (although NASCAR said no to the most exotic variant, the Single Overhead Cam (SOHC) 427). But Knudsen and others wanted a more competitive "Hemi-style" NASCAR V8 to battle with Chrysler's second generation 426 Hemi. FoMoCo engineers developed a new semi-hemi head to fit on an upgraded version of the new 385-series engines which had debuted in Lincolns. To homologate the new "Ford Hemi," Ford had to build at least 500 street-going units and install them in something. Although logic might have suggested installing them in Ford's NASCAR racer of the time (the Torino Talladega), Knudsen chose to have outside contractor Kar Kraft Engineering squeeze them into modified 428 CJ Mustangs. In line with the "Boss" competition theme already established by the Boss 302, FoMoCo appled the name "Boss429" to its new homologation hybrid.

The last real "Boss" of the first generation was the 1971 "Boss 351" Mustang. After the SCCA loosened its homologation requirements to permit destroking, Ford decided to take advantage of the new 351 Cleveland architecture in the somewhat larger 1971 Mustangs (developed under Knudsen's watch to his tastes). Although the 1971 Boss 351 arrived around the time of the disasterous November 1970 decision to kill all FoMoCo factory-backed racing and performance part development in the U.S.A. market (and after Knudsen's firing), the Boss 351 engine was arguably the best developed and most streetable of the original Bosses.

The "Boss" term didn't exist in a vacuum. Nor was it a FoMoCo creation. Legendary NHRA drag racer "Mr. Four Speed" Ronnie Sox was also known as "The Boss" See http://www.ronniesox.com/dianesox.php

"Boss" was a slang adjective of the time for things which were of exemplary strength, power, beauty or "coolness." "Boss Radio" was a popular Top-40 programming format on influential AM stations across the country. See http://www.93khj.com/ and http://www.bossradioforever.com/index.html Southern domino players in the 1960s often referred to a high trump in the game "42" as "The Boss." In later times, folk-rock star Bruce Springsteen was nicknamed "the Boss." In other words, "Boss" already resonated in the American vernacular of the time.

Ford even briefly referrenced its own "Boss" heritage during the genesis of the second musclecar era. In a magazine ad for the 157-horsepower 5.0 H.O.-powered 1982 Mustang GT, FoMoCo proclaimed "The Boss is Back" (notwithstanding that the 5.0 didn't feature Cleveland-style canted-valve heads or any of the heavy-duty short block features of the REAL Boss 302, much less the power output of the original). See http://www.mustanggt.org/82gt.htm ; http://www.mustanggt.org/fun/lg19821.jpg ; and http://www.mustanggt.org/fun/82ad.jpg

The real question is just what sort of "Boss" is the "new Boss?"

Rumors suggest that it won't be an OHC/DOHC "Boss," in the mold of the current Modular engines (the bore centers on the Modular V8 are too narrow for building V8s larger than about 360 cubic inches--curiously, narrow bore centers doomed the FE engine and, in part, lead to the ascendency of the 385-series big blocks). OHC/DOHC V8s also tend to be bulkier than pushrod OHV engines due to the overhead placement of the camshafts and related hardware, which could play into FoMoCo's decision to step back in technological time. Moreover, FoMoCo really hasn't taken advantage of the high-r.p.m. advantages of OHC engines, even as the practical r.p.m. ceiling on production and racing pushrod OHV V8s has continued to climb.

Except for racing, development of pushrod V8s at FoMoCo ceased in the 1990s. But the aftermarket has kept developing the Windsor/Cleveland small blocks at an even more aggressive pace than even before FoMoCo discontinued them. In fact, racers and hot rodders can build a completely aftermarket small block Ford, containing no OEM or FRPP "factory" parts (except for perhaps the front timing housing). Aftermarket small block Fords now routinely crest the "classic" 427, 428, 429 and even 460 cubic inch displacements, as well as the output levels of the engines which made these designations famous.

Obviously, if FoMoCo wanted to cut costs, maximize efficiencies and get the new "Boss" to market sooner, it would revive the basics of the Windsor/Clevelant architecture (block dimensions, bore center spacing, bolt patterns, etc. ) and retrofit new technologies to aftermarket variants of this venerable engine. Ford could even develop a deep-skirt "Y-block" version of the Windsor/Cleveland to take advantage of the "noise, harshness, vibration" advances developed in the Modular program. And even if the rumors are wrong about pushrods in the new Boss, history showes the basic small block Ford architecture can be successfully adapted to DOHC 4V duty (See any number of histories of Ford's Indianapolis experiences during the 1960s Total Performance era).

If FoMoCo followed this action plan, the new "Boss" would have a much more rapid acceptance in the aftermarket and a huge "installed base" of compatable vehicles and performance equipment. It would also have a "spiritual" tie to the the original Boss 302/Boss 351 of years before which would not escape those who concern themselves with the nuts and bolts of high performance engines.

Such a logical course, however, is doubtful. FoMoCo has a bad tradition of "reinventing the wheel" each time it engineers a new powerplant. Even in the original Boss era, Ford installed a staggering number of different engine types in Mustang (Falcon 6, 302/Boss 302, 351 Windsor, 351 Cleveland, 390/428 FE, Boss 429, 385-series 429) In contrast, Chevrolet and Chrysler had signficantly fewer engine families in their pony cars of the era.

Given that GM and DCX both used "clean sheet" designs for the engines which the new Boss seeks to compete with, the temptation for FoMoCo engineers to completely start over will be overwhelming.

Still, the boldest, "Bossest" move for FoMoCo would be to evolve the Cleveland/Windsor into a new Boss for the 21st Century.

LESSONS FROM MAZDASPEED

New Ford Motor Company (R) Chief Executive Officer Alan Mulally reportedly studied the collaborative process championed by Ford Taurus engineer Lew Veraldi and applied it to the development of the Boeing 777. See, James P. Lewis, Working Together: 12 Principles for Achieving Excellence in Managing Projects, Teams and Organizations.

To some, Mulally's study of the Taurus Way exemplifies his precise, straightforward, diplomatic and decisive method of management. He's been described as one who--as the cliche' goes--"thinks outside the box."

Mulally and his two likely successors-in-waiting, Mark Fields and Mark Schulz, now ought to study another example: Mazda's factory skunkworks -- Mazdaspeed.

The October 2006 issue of Sport Compact Car magazine [SCC] provides an inside glimpse at the development of the next big thing in the world of tuner cars--the 2007 Mazdaspeed3. But more importantly, it illustrates how a small, tightly knit team of experienced professionals can achieve greatness, if permitted by their corporate sponsors.

Mazdaspeed's entire team reportedly could fit inside a single Ford E-350 Econoline passenger van! According to the SCC report, Mazdaspeed only has THREE U.S. employees and another "dozen or so supporting program engineers in Japan." See, SCC at 67.

But Mazdaspeed's members have top qualifications for developing exemplary sporting machines. U.S. leader Tod Kaneko is a former Garrett turbocharger engineer with race team support experience in the IRL, CART, IMSA and a reportedly "informal" avocation as a well-known SoCal street racer. U.S. Marketing manager Derrick Ige is a former crew chief for Dan Gurney's AAR racing team, a former concept car builder with Metalcrafters, and has worked with Porsche and Nissan racing teams as well. U.S. engineer Takahro "Koby, Jr." Kobyakawa is an original Mazdaspeed engineer from Japan and is the son of the Mazda engineer who developed the FD RX-7 and the LeMans-winning 787B racer.

Anyone seeing a pattern here? It takes hard core "car guys" to develop a "car guys' car."

The development of the 2007 Mazdaspeed3 ought to also interest Mulally and the Glass House gang. When development began, the best car in class was DCX's Neon-based SRT-4, which developed 230 horsepower and 250 lbs/ft. of torque. But instead of just matching the SRT-4, Mazdaspeed benchmarked a whole series of competitors: SRT-4, Acura RSX Type S, Subaru WRX, Volkswagen GTI (Mark IV) and even the not-available-in-the-U.S.A. Ford Focus RS. Mazdaspeed also benchmarked "stretch targets," which were cars technically outside the Mazdaspeed3's price class but would be competitors on the tracks and streets--Subaru WRX STI and Mitsubishi Lancer EVO.

The development lessons here are that the market isn't stagnant and you "stay on offense" by benchmarking the best and bringing new technology down to lower price classes. This builds value, anticipates market developments and advances the state-of-the-art.

Mazdaspeed's benchmarking stands in stark contrast to FoMoCo's usual "just good enough or a little better" practice. See, e.g. 300 h.p. Mustang GT (engineered with the knowledge of GM's 300+ horsepower LSx V8s and continuing a 10-year-long-trend of being down on horsepower and torque to GM). It also guts a fallacy that's popular among some FoMoCo defenders, who often object that using "stretch target" benchmarking isn't reasonable or even possible.

The 2007 Mazdaspeed3 also benefitted from world-class development practices. For example, the car was initially developed at Mazda's Miyoshi Proving Grounds. Then Mazdaspeed took it to the Mine and Tsukuba racing circuits in Japan. But they didn't stop there. Mazdaspeed took prototypes to Germany for Autobahn testing and development at the famed Nurburgring. In the U.S.A. Mazdaspeed has tested its prototypes on the streets, at Buttonwillow racing circuit and finally at Mazda Raceway at Laguna Seca. Such arduous testing is necessary to produce a properly balanced and adequately durable performance car. FoMoCo could also learn from this emphasis on testing under "world performance" conditions. (How many U.S. Fords have been developed for Autobahn durability?)

And Mazdaspeed didn't stop there. Already under development and instrumented track testing by Mazdaspeed and accessories engineer Jonathan Butts are prototype lightened wheels, camber links and a coil-over conversion kit. Development and introduction of "speed parts" contemporaneously with the introduction of a new model spurs tuner interest and further aftermarket development. This model was first suggested in 1953 by Zora Arkus-Duntov (See link in right-hand column) and has served GM well for over 50 years. Although FoMoCo has sometimes employed similar tactics--most recently with the FRPP "Power Packs" for the Mustang GT, increased integration between aftermarket accessory parts and OEM development would likely pay significant dividends in "street cred" and aftermarket interest in Ford products.

According to the SSC report, the results are impressive. Using the off-the-shelf 2.266 liter MZR DSI turbocharged four-cylinder from the Mazdaspeed6 and CX-7 CUV, Mazdaspeed3 will come to market with 263 horsepower at 5,500 r.p.m. and 280 lbs/ft of torque at 3,000 r.p.m. (the MZR's output dropped slightly from 274 horsepower due to compromises necessary to fit the engine in the smaller Mazda3 platform). Redline is at 6,700 r.p.m. The power production is from the combination of direct fuel injection, a 9.7:1 compression ratio and a Warner-Hitachi K04 turbocharger puffing approximately 16 psi above atmospheric into a top-mounted air/air intercooler. The power gets to ground through the front wheels using a Tochigi Fuji Conical-Seat limited slip differential in a six-speed dual-layshaft manual transaxle with a 3.50:1 final drive and an electronic PCM torque management system.

The whole package will start at an M.S.R.P. of $22,290. But with a U.S. allocation of only 5,000 units, supplies may be tight and additional dealer markups are foreseeable.

The Mazdaspeed3 isn't perfect, though. It's heavy at 3,153 pounds, falling well short of the 10 lbs/horsepower benchmark that separates legendary performance cars from merely respectable ones. And it's fitted with fashionable, yet heavy 18-inch diameter wheels, when objective testing will show lighter, smaller wheels will adequately clear the brakes and perform better in autocross competition. Realities of assembly-line production also prevented Mazdaspeed from fitting the 3 with a more-efficient (and more stylish) front-mounted intercooler. Moreover, as a front-engined, front-wheel-drive car, it will understeer significantly under power and likely transfers at least 40% of its weight to the non-driving rear axle under heavy acceleration. The inherent performance limitations of FWD require electronic torque reduction in the lower gears for driveablilty. And despite Mazdaspeed's stretching of the performance envelop, the upcoming Caliber-based SRT-4 is coming to market with 300 h.p. in a red-hot, American-built package, which is sure to provide serious competition for Mazdaspeed3.

Still, in light of FoMoCo's tepid commitment and ongoing mismanagement of its SVT skunkworks, the strikeout of the Volvo-based D3 platform (Five Hundred/Montego/Freestyle), and "single-bagger" "hit" of the underpowered, Mazda-based, Mexican-assembled CD-3 sedans (Fusion/Milan/Zephyr/MKZ) , Alan Mulally and his crew could learn a lot from a little van-load of rabid "car guy" engineers at Mazdaspeed about how to develop world-class products on a limited budget.

UAW'S GETTELFINGER STOKED ABOUT MULALLY AT FORD; STIFFS DCX

In a pair of stories on UAW President Ron GettelFinger's speech before the Detroit Economic Club this week, Automotive News reported dramatically different treatments for Ford Motor Company (R) and DaimlerChrysler. www.autonews.com

Gettelfinger is "looking forward" to working with new Ford CEO Alan Mulally. Gettelfinger previously headed the UAW Aerospace Department when he "worked with" Mulally before on labor issues at Boeing.

Automotive News quoted Gettelfinger as saying "I found him to be a very credible individual. I never had an issue with him that we weren't able to sit down and talk our way through."

Skeptics reading between the lines will wonder whether Gettelfinger's purr words mean that the UAW chief expects Mulally to be an easy mark or if they mean that Mulally is such a slick salesman that he charms much of the fight out of labor negotiators.

Obviously, both Gettelfinger and Mulally have produced enough positive results on behalf of their respective sides that their respective career trajectories have remained on upward paths. But FoMoCo's situation is undoubtedly more critical than anything either of these leaders faced during Boeing talks. So perhaps the olive branch is a tacit recognition of FoMoCo's dire straits and their potential adverse impact on UAW membership.

Undoubtedly, Mulally's record in labor negotiations was a signficant attraction for William Clay Ford, Jr. But those who believe that hard-nosed negotiations leading to significant labor concessions are necessary to any real "Way Forward" are likely puzzled at Gettelfinger's apparent endorsement. Perhaps there'd be less angst if Gettelfinger had said "that Mulally . . . he's one smart, tough S.O.B! We're really going to have to work harder to obtain the kind of fair contract our workers need . . . "

Gettelfinger, however, may not see the "Way Forward" quite the same as the Glass House gang. Whistling past the graveyard of "right-sizing" and the 30,000 job cuts already announced, Gettelfinger said FoMoCo's challenge is to regain market share. While this is obviously the way a "labor supplier" would prefer FoMoCo to return to profitability, the reality is that Mulally and the Glass House gang will probably seek profitability at FoMoCo's currently reduced volume.

The bind for the UAW is to find a balance that saves as many dues-paying union jobs as possible and preserves the bulk of existing retiree benefits.

In stark contrast, Gettelfinger wasn't as kind to DCX. Automotive News reports that Gettelfinger said the UAW won't give DCX's Chrysler group concessions on health care costs. Gettelfinger said that the issue won't even be brought to a union vote.

Of course, the UAW previously agreed to some health care cost relief for FoMoCo and General Motors: "[A]ctive UAW workers forgo some future pay increases and face higher co-payments for prescription drugs. UAW retirees [from GM and FoMoCo] with pension incomes of more than $8,000 a year will start paying monthly premiums, deductibles and co-payments for health care" according to the Automotive News report.

It isn't that GM, FoMoCo and Chrysler aren't all at a huge health care and retirement cost disadvantage to the non-unionized Japanese transplant factories, because they are. It's just that Chrysler's financially healthier at the moment than GM and FoMoCo.

The UAW position evidences that its bargaining posture is often divorced from the big picture in the global automobile market. Instead of agreeing to a "pattern" that treats each automaker equally, fairly and competitively within the context of prevailing North American labor costs, so as to improve the Detroit 3's competitiveness and retain as many jobs as possible, the UAW apparently seeks to cherry pick, and grab all they can, while they can. This leads to greater cost distortions and less competitiveness. Moreover, it adversely affects consumer choice in that the high cost producers must cut somewhere else merely to stay in the game.

Perhaps Gettelfinger should just "ask Dr. Z" about it.

WARRANTY WAR: GM ONE-UPS FORD, BUT STILL TRAILS THE KOREANS

Yesterday, September 6, 2006, General Motors announced a new Five Year/100,000 mile powertrain warranty for all 2007 model vehicles sold in the United States and Canada, according to the Automotive News. www.autonews.com See also www.gm.com/warranty.

The new warranty replaced GM's standard three year/36,000 mile warranty and is fully transferrable and free of deductibles.

"The move is a bid by GM to counter successful marketing of long-term warranties by competitors such as Hyundai and Kia." www.autonews.com

Of course, GM's warranty volley is also in the context of Ford Motor Company's own escalation of the burgeoning "warranty war." FoMoCo jacked up the powertrain coverage on 2007 Fords and Mercurys to five years or 60,000 miles and on Lincolns to six years or 70,000 miles.

"'What we’ve found is that two-thirds of customers trade or dispose of the vehicle before five years and 100,000 miles,' said Mark LaNeve, GM's vice president of vehicle sales, service and marketing. 'This really matches the way customers buy cars.'"

The truth is that these enhanced warranties are simply a disguised sales incentive. However, they provide long-lasting psychological effects not available from one-time hits, such as rebates, employee pricing or zero-percent financing.

From a business perspective, long warranties are simply bundled repair insurance. For aftermarket service warranties, the warranty company's bet is that the premiums they collect from warranty sales will exceed their repair and administration costs.

But in the minds of consumers, a long warranty is a "guarantee" of reliablity. The consumers's logic is that the manufacturer wouldn't (and couldn't) "guarantee" a vehicle for so long if they thought it was going to break down. Thus, these enhanced warranties create "peace of mind" in consumers and, correspondingly, higher quality perceptions for the brand. This feeling is further extended by "roadside assistance" benefits that are copied from aftermarket "extended warranty" plans.

At least that's what the manufacturers hope.

It's not the first time we've been down this road. In the early 1960s, Lincoln shocked the automotive world by offering an unprecedented 24,000 mile warranty on its new "Kennedy" Continental. http://www.time.com/time/magazine/article/0,9171,894536,00.html Lincoln's problem then, as now, was that it badly trailed Cadillac in sales and perceptions of the brand's quality were not the best. The "long" warranty sought to garner attention for the "all new" Continental and to "one-up" Cadillac.

Chrysler played a similar game years later with its "5/50" protection plan.

FoMoCo boosted warranties on Ford Focus a few years back to offset a spate of negative publicty surrounding a number of recalls.

Of course, the Koreans have been the most aggressive in using warranties to assuage consumer angst about quality. In the 1980s -- when Consumer Reports was really emerging as a de facto promotional vehicle of the Japanese automakers (albeit with no "smoking gun" ever uncovered linking any coordination or collusion) -- Korean cars reportedly lagged in the quality cellar. Perhaps only the Yugo and maybe Jaguar had a worse reputation for quality back then.

To combat the widespread public perception that Korean cars were cheap, flimsy and of minimal quality, Korean manufacturers began offering dramatically extended warranties "for free" (e.g. warranty cost was burried in the sales price). Now Korean warranties extend as long as 10 years/100,000 miles.

Some would argue that the Koreans' aggressive promotion of warranties has saved their businesses in the U.S. and permitted them to move up-market more rapidly than would ordinarily be possible.

GM and FoMoCo dealers probably have mixed emotions about the escalating "warranty war." Undoubtedly they see the warranties as better than simply putting more "cash on the hood" with rebates and other discounts. Moreover, they probably expect these moves to counteract some of the misperceptions about "Detroit" quality signficantly lagging behind the Japanese. And undoubtedly they welcome the increased opportunities for service work under the warranties, although compensated by the factories at controversial "warranty flat rates."

But the dealers will miss some of the profits from the "F&I" department that the combination of short factory warranties and generous aftermarket "extended warranties" provided. Extended warranties have a 50% or better (sometimes MUCH better) gross profit margin. And in many states, sales are relatively unregulated, so dealers can keep all the difference from the transaction price (which the dealer generally sets) and the cost to "buy" the warranty from the service warranty company. (However, some warranty companies have a "charge back" provision if a dealer's warranty claims become excessive) And although the new, longer "powertrain protection" warranties do still preserve room for aftermarket "bumper-to-bumper" warranties, selling them to skeptical customers will be more of a challenge.

Similarly, these moves may also deprive some revenue from GMAC and Ford Motor Credit, both of which offer extended warranty products. But the manufacturers also realize that warranties are a deferred, contingent cost (excluding any reserves for such repairs and promotional costs), unlike rebates and discounts which always hit the bottom line immediately. And they recognize that warranties add perceived value without cheapening transaction prices, thus benefiting residual values and, thus, improving perceptions of brand's lasting value.

It's unlikely that GM's move is the final shot in the current "warranty war." FoMoCo may be unable to stay at less than 100,000 miles. And market pressures will likely force the Detroit 3 to move closer and closer to complete "bumper-to-bumper" coverage.

New FoMoCo CEO Alan Mulally is probably now wondering what sort of business he's got himself into. After all, Boeing usually sold its aircraft to sophisticated business customers with their own staffs of highly-trained mechanics, operating under the scrutiny of the FAA or other aviation authorities. This business about dealers, warranty repair rates, public perceptions and the "warranty war" is fresh ground for him.

MULALLY’S LEXUS AND A DEBATE ON BILL FORD

Dale Jewett of Automotive News, reporting on the "lighter side" of new Ford Motor Company CEO Alan Mulally's press debut, inadvertently uncovers Mulally’s lack of "car guy" credentials:

"Mulally was asked what car he drives now."‘I drive a Lexus today. I can't wait to own a Ford car,’ he said. Later in the news conference, Mulally said his Lexus was an LS 430 sedan. Bill Ford chimed in: ‘That is being keyed now as we're sitting here.’"

Mulally’s car choice indicates he’s just another bland suit with no particular passion for American automobiles, or even sporting automobiles. You could throw a rock through the clubhouse at the average country club and hit probably a half-dozen clones. But at least if he ever drives a Lincoln, he’ll realize just how uncompetitive FoMoCo really is in the luxury sector.

IS IT REALLY BILL FORD’S FAULT (PART II)

Speedzzter’s analysis of Bill Ford’s failed tenure at the top of FoMoCo (http://speedzzter.blogspot.com/2006/09/is-it-william-clay-ford-jr.html) has generated some strong reactions. The most prolific was from "Zanatwork" over on www.blueovalnews.com (Zan seemingly has no "work" other than to opine in hundreds of forum messages on his views of FoMoCo.)

Zan’s justification of Bill Ford’s tenure is illustrative of how mediocrity and defensiveness can creep into corporate systems. It probably explains much of how such a huge corporation could drift when both problems and solutions seem obvious to a number of outsiders.

Issue 1. FoMoCo's market share has declined for NINE STRAIGHT YEARS, dating back to the twin failures of the 1996 Taurus "Fishmobile" and the too-cramped-for-Real-Americans Mondeo/Contour (a/k/a the "Junior Fishmobile").

Zan: "Okay, so thank Trotman and Nasser for essentially blowing off long-term car development. As this critique dates back to 1996, why use it, when acknowledging Bill's tenure started in..."

REBUTTAL: The problems with the Taurus and Contour were obvious as early as 1999. Yet replacements for them failed to occur until FoMoCo’s "Year of the Car" in 2005. Now while Bill Ford didn’t take the top spot until October 2001, he bears some responsibility as an inside board member for putting up with the lack of earlier fixes. Moreover, the results of the 4-6 year gestation period of Ford’s newest sedans (cribbed from existing Mazda and Volvo platforms) are tepid at best.

Issue 2: Bill Jr. has been in a position to influence the direction of FoMoCo since 1999 (and arguably even earlier given his family's extensive holdings) And in the wake of Jac "the Knife" Nasser's failures--epitomized by FoMoCo's failed internet strategy and the Explorer-Firestone fiasco, Bill Jr. has been in the top job since October 2001.

Zan: "So..are we talking about Nasser's failures or Bill's? The author needs some clarity."

REBUTTAL: It ought to be clear that if Bill were a competent car guy, and something more than a tired Glass House bureaucrat he’d have seen the problems in 1999 (or well before–given that the warning signs were obvious years before to someone with an insider’s knowledge of Ford’s strategy) and used his influence with his Dad and other insiders to shake things up. Waiting until October 2001 to dump Nasser and then accomplishing so little in five years arguably proves that Bill hadn’t really though much about what direction to go BEFORE he arrived at the top.

Issue 3: If Bill Jr. had "the answers" wouldn't we have seen them in the nearly FIVE YEARS he's been at the controls? Instead, we've got a huge list of fits, starts, flip-flops and missed opportunities.

Zan: "He had "answers", but played too much defense on certain models, i.e. the Five Hundred. He did a number of things very right, including the Edge, the Mustang, the Fusion, and others. He did NOT have all the answers...I can't name anyone that does."

REBUTTAL: Whether the "Edge" is a hit and how much so remains to be seen. The Mustang was a competent effort, but left a lot of "game" on the table. The Mexican Mazda a/k/a Fusion has been mildly successful, but Ford is still canning 30,000 workers and closing 14 plants in North America, so whatever success it has, it’s not enough to prompt FoMoCo to put the Mexican Mazda in other plants or to save existing jobs. And it has done little to stem the marketshare growth of the Asian transplants (who actually assemble Fusion’s competitors in the U.S.A. Still, pointing to three "successes" doesn’t rebut the larger list of "fits, starts, flip-flops and missed opportunities."

Issue 4: Bill Jr. may eventually recognize, as his uncle Henry II did over fifty years ago, that having one's name on the building doesn't make one an expert in the car business. He's taken some steps in that direction with the elevation of Mark Fields and the creation of a "Management Committee" after finally purging out all those "retirees" Howes blames for FoMoCo's decline. But Bill Jr.'s epiphany won't come soon enough to undo the damage of the wasted 2001-2006 period.

Zan: "If one reads "autoextremist", [www.autoextremist.com] he has a recent article stating that layers of managemnet worked hard to keep Bill essentially uninformed of many hard truths for years. Hard ot make good calls when the information on your desk is inaccurate. [sic]"

REBUTTAL: And that’s part of the POINT! Bill Ford lacked the knowledge, sophistication and skill to know when FoMoCo bureaucrats were blowing smoke. And he did precious little to develop alternative streams of information. Besides, it doesn’t take "layers of management" to figure out a car is, underpowered, uses too much fuel, has weird styling, is uncompetitive on features or price, has reliability issues or just plain mediocre!

Issue 5: The CD3 and D3 sedans "developed" (mostly cribbed from Volvo and Mazda) on Bill Jr.'s watch are underwhelming and arguably uncompetitive. FoMoCo' sedans are down on BOTH horsepower and fuel economy to much of the competition.

Zan: "This earns a "duh", as the CD3 is selling essentially at capacity and both had to launch ahead of the 3.5 motor, which wasn't ready. Stay tuned for a change in that attitude by this time next year."

REBUTTAL: No defense of the D3 (Five Hundred, Freestyle and Montego). The delay in the 3.5 Duratec is inexcusable, considering that FoMoCo undoubtedly knew others would be building similar engines. And now that we know that the 3.5 Duratec is significantly down on power to the better established Nissan VQ. As Speedzzter previously reported, www.edmunds.com did a brief comparison piece of two new 3.5 liter V6s hitting the market: Ford’s long-awaited Duratec 3.5 and Nissan’’s VQ35 HR.

Ford’s lump, slated for the upcoming Ford Edge, Lincoln MKX and MKZ, pumps out a reported 265 horsepower and will only be hooked to a six-speed automatic in its initial installations.

But Edmonds reported Nissan’s 3.5 will rip out 306 horsepower when it shows up in the next Infiniti G35 and Nissan 350Z. It will also be coupled with either a six-speed manual or a paddle-shifted six-speed slushbox. And all of this will come with 10 percent better fuel efficiency than Nissan’’s current V6 in that class.

The Glass House bureaucrats and the FoMoCo Kool-Aide (tm) drinkers (Zan?) undoubtedly say that’s an unfair comparison. But is it? How many committees whacked down the output of the Duratec? How many naysayers and pennypinchers thought that it would be "enough" to run mid-pack among the current Japanese V6s –– failing to anticipate that Nissan and probably others would be moving the target upward? How badly were FoMoCo’s powertrain engineers restricted because some Ivy-League trained business analyst could not "make a business case" for a class-leading engine?

Issue 6: Bill Jr.'s FoMoCo has let profitable niches, such as the police car and livery trade, rot by mostly stopping development of the Panther and this neglect has drastically weakened the retail demand for these unique models (Why buy a new car that looks like a 1998 model and has less power than a new Honda?).

Zan: Anyone that in 1999-2001 saw a huge retail demand for BOF rwd American cars, raise your hand. Anyone? Beuller?

REBUTTAL: This a classic "chicken or egg" fallacy. FoMoCo neglects Panther development and promotion, resulting in an underpowered, less than optimally-fuel efficient, somewhat overpriced sedans with overly conservative and now dated styling. Then it kills all consumer-directed advertising. Then it fails to fight back when both Cadillac and DCX launch a brilliant, fuller lines of exciting RWD large cars. And then to justify its total inaction, its defenders claim there was simply no "huge retail demand for BOF rwd American cars."

It would seem that FoMoCo hasn’t really explored whether there’s a viable retail niche here.

Issue 7: While Bill Jr. did permit a redesigned Mustang for 2005, his bean counters saddled it with weak engine internals, too few variants to adequately cover the market, less than optimal fuel economy and inadequate power in the mass-produced GT model.

Zan: "This statement makes me concerned that the author uses high-powered drugs. Too few variants for a market it controls and dominate? Fuel economy babbling about the pony car segment? Stupid bordering on the delusional...Ford had to add a produciton shift for the 2005 model year, and sales have been very strong for almost 2 full years. [sic]"

REBUTTAL: Ad hominem attacks in lieu of argument usually mean the blows are starting to land.

Ford is still canning 30,000 workers and closing 14 plants in North America, so whatever success it has, it’s not enough to prompt FoMoCo to put the Mustang in other plants or to save existing jobs. And don’t forget that Mustangs (excluding GT500) require heavy promotion and $500+ rebates to sell. So the current Mustang line-up "diversity" isn’t attracting enough buyers. See, FORD MOTOR COMPANY HAS WASTED MUSTANG'S PERIOD OF EXCLUSIVITY, posted August 17, 2006 (http://speedzzter.blogspot.com/2006_08_01_speedzzter_archive.html)
More importantly, FoMoCo failed to equip Mustang with sufficient technology to achieve both high performance and high fuel efficiency. Simply using a similar "active fuel management" strategy employed by GM would boost Mustang fuel economy three to five miles per gallon with NO LOSS IN PERFORMANCE! Why wouldn’t Ford do this?

Although Zan leaves the point about weak hypereutectic pistons and spindly powdered-metal cracked cap rods in the 4.6 3V modular engine alone, others have criticized the "weak engine internals" conclusion. Certainly the Mustang GT is the cheapest 300 h.p. car in a game where 300 h.p. is barely the initial ante.

The simple fact is that as many as 25% of Mustang owners modify their cars. The flaws in hypereutectic pistons and Ford’s PM rods have been well known since 1996, when owners began modifying the 305 h.p. 4V SVT Cobra engine, often to explosive results.

And with only 281 cubic inches, supercharging is one of the few cost-effective ways to make a Mustang run with an ordinary Mitsubishi EVO, Subaru WRX or even a five-year-old GM V8. Yet FoMoCo’s cheapness limits bolt on power to about 450 h.p. gross (even though the block will withstand as much as double that).

Thus Saleen, Roush, Vortech, Paxton, Procharger and others are limited to expensive, dodgy low-boost supercharger systems that do not provide as much "bang for the buck" as they could have if FoMoCo would have only anticipated how thousands of its customers wanted to use their cars. And countless potential sales have been lost to other alternatives (imports, older Mustangs, older GM cars, etc.) because the cost to build a 550+ h.p. car is unnecessarily inflated by the expense of an engine rebuild, due to FoMoCo’s failure to make available heavy duty engine options in Mustang GT.

Finally, FoMoCo did absolutely nothing to address this issue -- even over the counter. The Ford Racing Performance Parts catalog has NO SUPERCHARGED ENGINES AND NO SUPERCHARGER READY ENGINES FOR ANY MUSTANG!

Issue 8: While Bill Jr. did permit the GT supercar and the Shelby GT500, he starved SVT and Ford Racing Performance Parts, decimated the number of FoMoCo supported NASCAR teams (reducing Ford's chances to Beat GM, DCX and now Toyota on the track), failed to engineer a return to Indianapolis, squandered the valuable Cosworth legacy, and killed FoMoCo's decades-long tradition in Formula One participation without replacing it with another high-profile international competition alternative.

Zan: "Ford Racing Parts has had near-record years since the new 'Stang. I'd agree that SVT's presence is a tiny fraction of what it was, but it seems they've been given a reprieve.Return to Indy? Why? Open Wheel Racing in this country is on life support, and it did it to itself.Cosworth and the F1 development got criticized as ‘dead wood’ for Ford at the time, and now their absence gets hammered. Must be great to be a critic...."

REBUTTAL: Indy still attracts 300,000 or more fans and is still of enough significance that Honda spends millions to be there. F1 is still important enough that Honda, Toyota, Renault, Mercedes and Ferrari spend hundreds of millions. And Cosworth was a Ford brand with 35+ years and millions in "brand equity" which could have been tied into Ford’s similar DOHC "street" engines.

The simple reality is that under Bill’s watch, Ford significantly retreated from motorsports, did almost nothing of benefit to grassroots racers and failed to adequately leverage its promotional investment in motorsports with its OEM products. If Bill were a car guy and a true racing fan, he would have insisted on a better job and invested the dollars necessary to achieve it.

Issue 9: Bill Jr.'s FoMoCo has failed to recognize and adapt to the resurgence of rear wheel drive in premium, luxury and high performance niches.

Zan "The Mustang and GT make a lie of part of that, but in premium and luxury vehicles...I have no argument."

REBUTTAL: High performance is not limited to a temporary, unobtainable supercar (GT) or a cramped pony car. For example Cadillac and DCX sell several low 14 and 13 second (in the quarter mile) RWD sedans. Other than a couple of expensive imports, FoMoCo builds ZERO. In trucks and SUVs, Ford has no high performance presence. And FoMoCo’s shift to Mazda and Volvo platforms, its failure to develop DEW98 or import the Australian Falcon or to even pump up the power in the Panthers means that FoMoCo will be unable to rapidly respond to the resurgence in RWD anytime soon.

Issue 10: Bill Jr. failed to have a contingency plan for $3.00/gallon fuel prices, which have been foreseeable for a long time.

Zan: "Spare me. Honda and Toyota's truck programs moved ahead, DCX is putting forward bigger RAMs and SUVs like the Commander and Aspen, and Nissan's Titan has SUV spinoffs in the large-SUV category. The WHOLE INDUSTRY blew that call."

REBUTTAL: That would explain all of the Toyota and Honda hybrids, the Honda Fits, the Nissan Versas, the Scions, the Toyota Yarises . . . (Apparently the Japanese can pursue more than one market segment at a time)

Issue 11: On Bill Jr.'s watch, FoMoCo failed to properly develop the Focus as a viable alternative to Honda and Toyota (and now Scion) in the youth market.

Zan: "I don't have much argument for that, but the Focus isn't dead yet, either."

REBUTTAL: We just get saddled with the obsolete versions, while the rest of the world gets the latest and greatest, sort of like how U.S. car companies used to dump all their obsolete designs down into South America during the 1960s and 1970s.

GM turns backflips and spends millions developing and racing its Ecotec as a viable alternative to Honda and Toyota in "tuner" markets. DCX builds a "world engine" facility and has made headlines with its SRT-4s (Neon-based and Caliber) as well as with its Neon ACRs. But Ford dumps the Zetec and the SVT Focus, refuses to import or build here the RS (which could take sales from WRX and EVO as well as build nameplate image), has never built a "club racing" version of the Focus for the U.S. and can’t even get the bolt-in Mazdaspeed variations of the Duratec into anything wearing a Blue Oval. Seems like mismanagement, doesn’t it.

Issue 12: On Bill Jr.'s watch, the 6.0 PowerStroke fiasco damaged FoMoCo's truck reputation and allowed DCX and GM time to catch up in turbo-diesels.

Zan: "Yes, and as we know, Ford is the only company with wide ranging defects (cough)."

REBUTTAL: The point is that Ford hasn’t reacted fast enough to either the 6.0 problems nor the drastic improvements in Cummins and Duramax. Although FoMoCo still has the lead, it’s smaller and sitting on a lead with the Taurus eventually cost FoMoCo market leadership and a huge chunk of its business. Given that trucks are the current savior of FoMoCo, any problem ought to be aggressively addressed and constant innovation should be the watchword.

Issue 13: On Bill Jr.'s watch, the new F-150 came in too heavy, without high performance options, without manual transmissions, without fuel-saving multivalve engine technology, and without turbo diesel engine options.

Zan "Still on his watch, it remained atop the sales charts, is better in terms of structure and interior than the competition, avoided the downturn in the performance truck market caused by expensive gas, and has a turbo-diesel that will come in not long after the new clean diesel...which somehow the author didn't mention. [expletive deleted]."

REBUTTAL: Justification for sitting on a lead? FoMoCo hardly avoided an overall downturn. It delayed development of a light diesel option, forcing diesel buyers into heavy Superduty trucks (even while Volkswagen brought diesel power back to tiny cars–so don’t say light turbo-diesels were impractical on the old "high sulphur" fuel) Clean diesel will be here in January, but Ford’s F150 diesel won’t.

It failed to develop relatively efficient high performance trucks. It failed to match, much less beat DCX and GM in large gasoline engines. It failed to develop a credible Suburban competitor. It has no models competitive with GM’s "mid-gate" trucks. It slowly responded to Toyota’s bed tie-down system. It has given the market for multivalve DOHC truck engines to the Japanese. It has let GM beat it on both power and mileage. It failed to offer F-150 with manual transmissions. In short, Ford hasn’t done enough to keep pressure on its competitors. Being number one simply isn’t enough (besides if Chevrolet and GMC sales are combined, Ford’s "number one" claim is questionable) .

Issue 14: On Bill Jr.'s watch, FoMoCo's minivans have lagged the competition in power, economy, innovation and marketshare. Now FoMoCo is giving up on the segment, in favor of "people movers."

Zan: The Freestar is a clean miss, but the upcoming models appear better aimed at shaking up the market. Will he get credit for those if they work?

REBUTTAL: Misses the point. FoMoCo should have seen the minivan problem on the horizon as soon as it was clear the Japanese were entering the market with competitive products (not the goofy forward control vans they originally tried to sell). If "people movers" work, Bill Ford will get his fair share of the credit.

Issue 15: On Bill Jr.'s watch, an unnecesary and divisive "boycott" has damaged FoMoCo's dealer base, especially in the "Bible belt" without yielding any particular benefits to the company otherwise.

Zan: "Is this moron blaming Bill for the actions taken by a bunch of homophobes, offended my companies treating the GLBT society as human? Golly!"

REBUTTAL: The point was that Bill Ford could have looked out for his dealers by choosing a less confrontational path and by living up to the compromise agreement negotiated by Texas dealer Jerry Reynolds. It’s not as if FoMoCo’s controversial stance has pumped up the bottom line.

Issue 16: On Bill Jr.'s watch, Ford's SUVs have continued to decline in marketshare, notwithstanding redesigns, because they lack sufficient power, economy and value to stay competitive (especially in trendy niches such as luxury SUVs).

Zan: The SUV market has shrunk while crossovers are coming on. The Escape, Mariner, upcoming Edge, and Freestyle are in place and/or being positioned to adapt to the market's change.

REBUTTAL: Escape and Mariner haven’t been world-beaters in the cute-ute or crossover market. The Edge hasn’t proven anything yet. Freestyle has been disappointing. Moreover, FoMoCo’s failure to compete harder for a shrinking pie of SUV sales . . . or to innovate to boost the value, economy and practicality of SUVs indicates FoMoCo on Bill’s watch was out of touch and had no contingency plan for an obvious possibility.

Issue 17: On Bill Jr.'s watch, FoMoCo has failed and refused to adopt new technologies, such as cylinder deactivation, "twin-charging," turbocharging (in North America), electric-clutched superchargers, broad use of variable intake runner technology, broad use of variable valve lift and timing, and even off-the-shelf multivalve heads in some applications.

Zan:" "I'd like someone from powertrain R&D to answer these allegations, as I'm reading several rumors constantly that refute this statement."

REBUTTAL: You can’t buy rumors . . . . But you can buy each of these fuel saving technologies (except twincharging in the US) in other brands NOW! Bill Ford’s FoMoCo was asleep at the switch on engine innovations.

Issue 18: On Bill Jr.s' watch, the 3.5 Duratec, which is touted by some as FoMoCo's "engine of the future" came to market late and down on power to the Japanese competition.

Zan: "This person is a true moron. The engine produces VERY competitve power to like-fueled engines that even have more expensive hardware applied...and this engine is in the very early stages of its development.

Is it late? Yes. Is this on Bill's watch? Yes."

REBUTTAL: Did www.edmonds.com lie? The 3.5 may be the world-beater all the Kool-Aide (tm) drinkers are hoping for, but out of the box–its simply mid-pack. Mid pack isn’t enough when the Japanese are eating Ford’s lunch and then making them do the clean-up, too.

Issue 19: On Bill Jr.'s watch, Lincoln slipped further behind Cadillac and began its ill-advised move downward into the morass of "near luxury."

Zan: I'll admit that Lincoln has been run poorly...but it never was competing with S-Class Mercedes sedans in the first place.

REBUTTAL: Who was talking about Mercedes?

Lincoln can’t even touch Cadillac anymore, much less Mercedes. Lincoln can’t even really touch Chrysler 300C or 300C SRT-8 . . . . And with the moves away from RWD, V8s and American assembly operations, Alan Mulally and his golf course buddies won’t even be able to find an American-built alternative to his Lexus LS430 among Lincoln’s line-up! "Poorly run" is a gross understatement!

Issue 20: On Bill Jr.'s watch, the Japanese took virtually all of the praise and adoration for development of hybrid-electric vehicles, while FoMoCo stalled, delayed and flip-flopped in this image-building (yet otherwise relatively meaningless) segment.

Zan: "Gosh, it isn't like Ford was the first domestic playing in the market, has more hybrids nearing production, or got hosed by Toyota holding back on powertrain items...."

REBUTTAL: Therein lies the problem. 14 shuttered plants and 30,000 pink slips, in part, because FoMoCo hasn’t invested enough to develop (or license) "trendy" technologies ON IT’S OWN! The environmental radicals do have a small point in that if Bill Ford were truly one of them, he’d have invested more in "green technologies."

Issue 21: On Bill Jr.'s watch, FoMoCo continued its failure to offer any affordable alternative to Chevrolet's Corvette.

Zan: "This is a failure? The market is small and would cost more than it brought in for years...when Ford's in the black, that would be a worthwhile project."

REBUTTAL: Although this point is linked to the Thunderbird debacle, it ought to be clear that Corvette is a huge image booster internationally for GM and Chevrolet. GM has sold plenty of lesser Chevys because of Corvette. GM’s small block engines have ruled the aftermarket because of Corvette development of them and the image derived from Corvette.

And Ford didn’t even develop an affordable Corvette-beater when it was flush with profits! Even a half-hearted attempt, such as using Mustang bits to take on the objective numbers of Corvette would be better than nothing (other than a rare and hyper-expensive and now dead Ford GT).

Issue 22: On Bill Jr.'s watch, FoMoCo basically killed the storied Thunderbird nameplate with an effete, boulevard poser in the obviously failed mold of Chrysler's Maserati TC, Buick's Reatta, and Cadillac's Allante.

Zan: "This person has very little knowledge of previous T-Birds, obviously. It was the closest to the spirit of the original, which was hardly a hard-edged performance car."

REBUTTAL: So FoMoCo goes down the same failed route again?

While Thunderbird arguably went astray, abandoning any pretense of sporting in 1958 under Robert McNamara’s leadership, and only slightly recovered with the mid-1980s "Aero-birds," the retro revival was a perfect time to turn Thunderbird into a Corvette competitor (albeit one with "heritage-inspired" styling). Ford didn’t step up and now we know the result. If Bill Ford was a real car guy, he might have avoided this missed opportunity.

Issue 23: On Bill Jr.'s watch, FoMoCo flipflopped on the "Hurricane" truck engine project and failed to leverage its advantages in multivalve overhead cam engines in V8 markets (while the Japanese continued to make inroads with their DOHC Four-Valve V8s and V6s, and DCX and GM dominated the large V8 market).

Zan: "No real argument, though I'd blame it on an overreaction to rising fuel prices. It looks like a chancy time to bet on big V8s."

REBUTTAL: Meanwhile the OEM, aftermarket and marine fields are yielded to GM and DCX. In 1999, it probably looked like a "chancy time to bet" on small diesels, or hybrids or fuel-saving technology, too. Thus this "risk" logic appears overly conservative. Shouldn’t Ford have a contingency for the return of "large V8s." Even a revival of the Windsor, based on widely available aftermarket parts, would be better than doing nothing.

And why not think out of the box with things like emission-compliant "large" crate V8s for the aftermarket?

And why leave awesome engines, such as the DOHC ‘01 and ‘03 SVT Cobra powerplants on the parts shelf, instead of installed OEM or available over-the-counter?

Why not follow GM and DCX’s lead into cylinder deactivation and other efficiency technologies to make big V8s more fuel efficient?

Issue 24: On Bill Jr.'s watch, FoMoCo failed to take any marketshare away from GM in the opinion-leading aftermarket repower niche. FoMoCo's line of "crate engines" simply aren't competitive on variety, price, features or availability.

Zan: "Not much argument here, but Chevy has always had an advantage in the ‘small block friendly’ performance market."

REBUTTAL: See Corvette rebuttal, above. So FoMoCo should just punt. It should just live with the indignity of Chevy-powered street rods, Chevy-powered ‘56 F-100s, and even Chevy-powered Mustangs?

Why just give Chevrolet a walk-over in the essential grassroots competition and hotrod markets? Where’s the "Bold Move" in that?

Issue 25: On Bill Jr.'s watch, FoMoCo failed to develop a competitive sub-Focus subcompact for the North American Market.

Zan: "His watch isn't over, and B-cars are in development."

REBUTTAL: Meanwhile, the Japanese have such cars here now. Clear evidence that FoMoCo failed on Bill’s watch.

Issue 26: On Bill Jr.'s watch, FoMoCo allowed the Taurus to decline into a fleet car sold at commodity prices and failed to develop competitive alternatives to Toyota Camry and Honda Civic.

Zan: "The Taurus was a joke before he took the reigns, as mentioned above. The Fusion is a Camry competitor, and the Focus gets a huge upgrade shortly. Again, his watch isn't over."

REBUTTAL: Taurus was NUMBER ONE until Ford lost its way in the mid-1990s. So the point was that the problems were obvious at least TEN YEARS AGO and Bill’s regime didn’t do much to fix them. But there’s always, "tomorrow, tomorrow" (meanwhile FoMoCo may slide a couple more percentage points in marketshare).

Issue 27: On Bill Jr.'s watch, FoMoCo failed to make use of Eaton supercharger technology (except in a few expensive niche and import models), notwithstanding that it had mostly funded the development of it. However, DCX, GM and others have greatly benefitted from this "Ford" technology.

Zan: "HAR! Yeah, people are lining up for Crossfires, supercharged W-cars, and what-not. Also, there's not shortage of people on this very board that sneer every time a "blown" Ford is announced...."

REBUTTAL: So the alleged disdain for Eatons will doom the GT500?

None of that refutes the point that FoMoCo didn’t really reap all it could from its investment in turning the Eaton into a fuel-saving high performance strategy (as compared to larger naturally aspirated engines of similar peak output).

"Fuel economy is not compromised . . . when utilizing the bypass system in conjunction with the supercharger. EPA (environmental protection agency) figures support this claim. A typical domestic vehicle equipped with an Eaton supercharger shows no fuel economy penalty for highway driving, and only a one mile per gallon penalty for city driving."

"The Eaton supercharger system incorporates a specially designed bypass valve, which is actuated by a vacuum motor near the throttle body, and recirculates the supercharger air flow when boost is not required. During typical driving conditions, the engine is under boost around 5% of the time, which means the remaining 95% of the time the engine is under vacuum, allowing for better fuel economy and a quieter ride. In addition, the helix angled rotors, along with specially designed inlet and outlet port geometry, also reduce pressure variations resulting in a smooth discharge flow and a lower level of noise during operation."

http://automotive.eaton.com/product/engine_controls/superchargers/whysuperchargers.asp

Issue 28: On Bill Jr.'s watch, Mercury has floundered as a badge-engineered marque with a lack of clear direction and poor sales, despite having an exemplary initial quality.

Zan: "Not much argument...see my sig.[sic]

[Zan wants to be Mercury’s product manager]

Issue 29: Bill Jr. has failed to solve the paralysis-by-analysis problem fostered by FoMoCo's committee system, causing products that do make it through to be too late to market, too conservative, tepid in design and generally uncompetitive.

Zan "See the "autoextremist" reference above, and the speeing-up of development. Stay tuned [sic]"

REBUTTAL: This doesn’t refute that Bill didn’t figure out how to get the job done, notwithstanding his years of development within the Ford organization and his powerful family ties.

Issue 30: On Bill Jr.'s watch, FoMoCo's sales have continued to shrink, declining 12% in the most recent sales month (August 2006) to 255,112--notwithstanding a blow-out Zero percent financing sale and increased warranty coverage.

Zan: "Yeah, compared with the "employee pricing" fire sale of last year...the 0 for 72 slae is on for weeks vs. months for the other. What a goober. Last year's debacle may never be beaten."

REBUTTAL: Misses the point. Remember FoMoCo’s been shrinking for NINE YEARS! Bill’s regime didn’t significantly abate the slide.

Issue 31: On Bill Jr.'s watch, FoMoCo hasn't developed a reliable method to locate "stars" in the automotive world, attract them into the FoMoCo's orbit, and to empower them to build legendary motorcars.

Zan "I'll be sure to tell the all-first-rate design staff Ford has right now."

REBUTTAL: You mean the same ones who’ve neglected Panther, punted on minivans, brought us the underwhelming retro Thunderbird and the Five Hundred, let Lincoln LS shrivel and die while Cadillac and DCX actually fought the import invasion . . . .

Issue 32: On Bill Jr.'s watch, FoMoCo has failed to leverage its associations with Panoz, Roush, Saleen, Steeda, MG, Noble and Morgan by providing them with power-adder ready DOHC 4V engines at reasonable costs, and exploiting the favorable publicity from the "Powered by Ford" niche marques.

Zan: Panoz runs Ford gear, Roush is a development partner, as is Saleen, as is Steeda, noble is a customer, and Morgan's in bed with BMW while MG is essentially dead. This person needs psychiatric help.

REBUTTAL: Totally misses the point. Ford hasn’t achieved the kinds of promotional synergies it could have in using its associations with these specialty marques to promote "Powered by Ford."

PANOZ BEAT PORSCHE AT LEMANS AND FOMOCO CAN'T GET ANY MILEAGE OUT OF IT!

STEEDA AND SALEEN WON MULTIPLE CHAMPIONSHIPS WITH FORD POWER, BUT DOES FOMOCO TAKE ANY PROMOTIONAL ADVANTAGE OF IT?

BTW, although the Morgan Aero 8 is BMW powered, the heritage models sold overseas still use Ford power.

FoMoCo hasn’t made the DOHC head available for Roush, Saleen and Steeda tuner Mustangs. And each of these are limited in power output by the "weak internals" of the production V8s. If FoMoCo were really lending a helping hand, it would sell the tuners the "good stuff."

MG did die on Bill Ford’s watch, but before it did, MG used basically a 2001 Cobra engine in sedans. Ford held out on the "good stuff’ there, too.

MG will be back, under Chinese control, and Ford will have lost the opportunity to associate or leverage powering this brand.

Issue 33: On Bill Jr.'s watch, FoMoCo failed to develop the Lincoln LS as a viable alternative to Japanese, American and European sports sedans, instead allowing it to atrophy and die before its time.

Zan: "No argument...the LS was/is a failure. I don't see that it had much development life to offer."

REBUTTAL: Translation. GM, DCX, Toyota and Nissan can develop V8-powered RWD luxury performance sedans, but Lincoln can’t.

There was nothing wrong with LS that more power and more refinement couldn’t have fixed. But Ford’s attempt to preserve Jaguar (who builds the similar S-Type ) severely limited Lincoln’s ability to fully develop the DEW98 platform for itself.

Issue 34: On Bill Jr.'s watch, FoMoCo has failed to appropriately identify and apply the essential "brand DNA" of its various nameplates, leading to such fiascos as pouring millions into Jaguar in the hope that it would be successful selling Mondeo-based compacts and ignoring FoMoCo's legacy as the company which brought low-cost V8 power to the masses (ironically, none of FoMoCo's latest sedans will accept a FoMoCo V8).

Zan: "On his watch, but much of this had NAsser and Wolfgang involved. As far as the V8s are involved...hasn't gas been pricier of late? I don't like it, but it's hardly difficult to see logic involved"

REBUTTAL: Gas is $6.00 in Europe, but the Germans and Italians still develop V8s (and even W12s!) GM offers V8s with 31 M.P.G. Chrysler isn’t far behind.

The point is that cheap V8 power was a hallmark . . . a distinctive of Ford for decades. Ironically, they’re poised to be the first of the Detroit 3 to abandon it (although Chrysler basically did in the Iacocca ‘80s) except in specialty and high-performance sporty cars.

Although V8 power will need to change with the times, the psychological draws and the inherent smoothness advantage of V8s won’t go away soon. Ford started down this path when it bet the farm on the V8-less Taurus twenty years ago. An although it’s spent millions on V8 development, it hasn’t offered its best V8 in a RWD (or even an AWD) sedan in a long time. Nor has it even built very many FWD V8s–and none recently.

Simply put–FoMoCo is squandering its unique V8 heritage in favor of unremarkable six cylinders and outsourced fours.

Issue 35: On Bill Jr.'s watch, FoMoCo neglected the compact truck segment, allowing Ranger to age ungracefully, while competitors continued to invest in the segment.

Zan: "Ummm...while the Ranger has been sadly ignored, the compact truck segemnt is essentiall: the Ranger. The others are mostly mid-sized. [sic]"

REBUTTAL: This seems to contradict all the hand-wringing over fuel economy. If FoMoCo had a competitive small truck, wouldn’t it stand to benefit from high fuel prices more than it has with the Ranger?

Bill neglected it and its just "another brick in the wall" that traps 30,000 (of workers and 14 plants in a death spiral (who needs plants if you’ve got few products of interest?)

Issue 36: On Bill Jr.'s watch, FoMoCo's stakeholders, such as its salaried workforce, its union workforce, its dealers, its suppliers, the communities which depend on these groups of stakeholders, and ultimately, FoMoCo's loyal customers, have all suffered by virtue of the foregoing FoMoCo failures and others too numerous to mention.

Zan: "Many of the failures mentioned are hardly applicable, and I'd be scared of others this chump would bring up. The spin was already ridiclous.[sic]"

REBUTTAL: And now we can see how myopia and defensiveness block out objective criticism of the Bill Ford regime at FoMoCo. Multiply this several times over and you can see why FoMoCo is failing.

Sad, isn’t it?

ALAN MULALLY'S "WAY FORWARD" AT FORD MOTOR COMPANY (R)
Anyone familiar with the Ford Motor Company and the Fords recognizes this pattern.

William Clay Ford, Sr., according to a number of Ford family biographies, retreated to the bottle and then to the Detroit Lions football club when he got shoved out of the Continental Division by his Eat-it-Hump-it-or-Poop-on-it older brother, Henry Ford II.

Henry II himself tapped the "Whiz Kids," GM-ex Bunkie Knudsen, and the self-promoting father of the Chrysler K-Car and the Opera Window (and Ford Mustang), Lee Iacocca, to handle the dirty work while he kicked back as Chairman.

And press reports just this year had William Clay Ford, Jr. retreating to the sanctity of the Detroit Lions training facility in lieu of engaging debates in the Glass House.

The weak always retreat when the going gets rough.

But Billy’s old news now. His time at the top will be judged by the long look of history.

But thankfully Bill (or perhaps the Board) recognized that a new CEO was in the best interests of Ford’s stakeholders. Or maybe it was just time for a new guy to absorb all the "slings and arrows" of the pundits and second-guessers while "Waiting for Ghosn."

So what advice for the new guy?

Sure he’s an airplane whiz, but what does he know about building and selling relatively cheap (as compared to a jumbo jet) consumer products? What does he know about competing in a cutthroat industry where there are EIGHT huge players, instead of just two or three? What does he know about the ethos, pathos and logos of American motoring?

ALAN MULALLY’S "WAY FORWARD"

1. Forget Boeing: Sure, you had nearly four decades of success at America’s most successful aircraft builder. Sure, you figured out how to maneuver the Byzantine halls of power in a huge American manufacturing concern. Sure, you probably even know the prosaic beginnings of Boeing in the Old Red Barn and can draw some folksy parallels between Boeing and FoMoCo. But FoMoCo isn’t Boeing. And FoMoCo’s problems are more serious than some temporary downturn caused by the 9/11 attacks. Your slate is blank now and "the whole world is watching." (not to mention all of us armchair yahoos in the blogosphere)

2. Don’t Get "Bunkied:" FoMoCo history is littered with brilliant auto-men who didn’t last at FoMoCo. And you’re not even a bona fide automotive executive, yet. Most of those who rose to the top worked their way up through FoMoCo.

One notable one who didn’t is Semon "Bunkie" Knudsen. Knudsen was brilliant at GM. But when the father of the Small Block Chevrolet engine–Ed Cole–bypassed Knudsen on the GM depth chart, Bunkie became restless. Henry II then tapped Bunkie to run FoMoCo, to the chagrin of Iacocca’s people. Iacocca and his crew never let Bunkie settle in. And in less than two years, Bunkie was out.

The Glass House is undoubtedly filled with all sorts of long time FoMoCo "lifers" who figured that if Bill Ford bailed out, that they would the "natural" replacement. And, just like Iacocca, each of those "movers and shakers" undoubtedly has an informal network of supporters. While younger guys like Mark Fields may see this as a wash or even a positive development for their chances to move up someday, not everyone may be so patient. So figure out who really runs that place and get them on your team, pronto! Don’t be another Bunkie.

3. Walkabout: Forget about kicking back in your new corner office with a Starbucks. Pack your suitcases. Dress well, but leave the custom tailored CEO suits at home. You need to go on a long-term "walkabout" of the Ford world. You can’t learn sitting in meetings all day with people who may or may not understand reality. You need hard data acquired first hand, and without all the interest group filters and political garbage. You need to find the hidden talent at FoMoCo to lean on and also the bureaucrats and self-promoters to avoid. More importantly, you need to get inside the head of FoMoCo’s customers and dealers.

4. Really Visit the Dealerships: Spend at least two days every week in dealerships. Don’t go for the official dog-and-pony shows though. Don't just talk with the head man or the F&I guys. Talk with customers waiting in the service area. Talk with line techs. Listen to service managers. Ride with salesmen. Visit both struggling dealerships and market leaders. Get in touch with the people on the front lines of sales (it will be worth more than 500 pages of executive summaries).

5. Really Visit the Shop Floors: Spend at least one day a week on plant floors. Walk around without the usual circus of hangers on. Don't make it some scheduled "state visit." JUST SHOW UP UNANNOUNCED. Tell the UAW reps and the managers to screw themselves if they want to filter what you learn by observing and interacting with the front lines of manufacturing.

6. Spend Quality Time in Engineering: Spend at least one day a week with a small cadre of aggressive engineers. Of course you still need to periodically walk through engineering labs, styling and other departments to show the flag, learn first hand and to build morale, but quality time with a hands-on "focus group" of creative engineers will do much to increase your depth of analysis and appreciation for the technological challenges facing FoMoCo.

7. Learn to Drive: Take a performance driving course. Bonderant did wonders for Don Petersen's understanding of the real world.

8. Get into the Product: Test everything you can get your hands on. Forget being driven anywhere (unless it's riding with a customer to gain more first hand impressions). Car guys must drive. And you need to drive all of the competitors' cars, as well as everything you sell. Add in some older used cars and trucks into the mix, too, because the first impressions many get of a brand often come from something you've already done and forgotten about.

9. Really Meet the Customers: Go where the Ford enthusiasts are.

Nearly every weekend of the year, there's a race, car show or other automobile event where privateers are pumping up Ford brands "for free" because of their passion for them. Seek out these people and learn from them. See and be seen.

Don't just go to the big NASCAR shows. Don't just hob-knob in the luxury boxes. Hit some dirt tracks. Experience the Chili Bowl. See Mustangs on the strip at an FFW show. Let Rick Kopec or even Carroll Shelby show you around some Shelby meet. Walk the 18th fairway at Pebble Beach during the Concours* and visit the paddocks at the Monterey Historics and Goodwood. Stay up all night in the pits at one of the 24 Hour races. Walk the pits and the starting line at Bonneville during Speed Week (you might even talk the SCTA/BNI into letting you make a pass in something reasonably safe that your private engineering cadre puts together for the occasion--You'll make the cover of HOT ROD if you do). Pose for photos with the ordinary people and sign autographs.

*But use one of those corporate jets to make sure you're also in Detroit to experience the Woodward Dream Cruise.

10. Be Open: Let people in and out of FoMoCo get to know you. Surely letting cameras follow you around during some of your travels would make for interesting, candid television which could help promote the Ford brands and to humanize perceptions of your leadership. Utilize the automotive and business press to get your message out. Show up on www.fordboldmoves.com

11. Don't Neglect the Spiritual side of Life: Given other executive responsibilities, items 1-10, above, will dominate your time. However, you cannot understand Ford's customer base from a purely secular perspective. Furthermore, if you neglect higher things, your ethics and empathy will suffer.

12. Trust but verify: Delegation is the only way anything gets done in any complex organization. And it's even more so in one where the top boss is always out in the field. However, people being people, organizations typically are designed to insulate top management from reality and to defer decisionmaking. But if you've got the best managers in place, you can trust them with most of the details as long as you become the "quality checker." Customer-driven goals can breed "American Innovation" if encouraged.

13. Don’t Forget the Forty-Percenters: Remember, you’re a hired hand. Bill didn’t fade into the sunset. Just like Henry II, he’ll be around and it’s still his family name on the building. And Bill’s power base comes from stock control. So even if Wall Street loves you, if Bill doesn’t, be worried. Remember what happened to Iacocca.

Of course, if you pull this gig off, you’ll be a legend of modern American business. On the other hand, the least you can do is keep the seat warm for Carlos or Mark . . . .

Just don’t screw it up any worse than it already is, Okay?

REUTERS REPORTS THAT BILL BAILS OUT

Ford Motor Company (R) reportedly named former Boeing Veep Alan Mulally as president and chief executive officer. http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-09-05T200941Z_01_WEN4964_RTRIDST_0_AUTOS-FORD-URGENT.XML&rpc=66&type=qcna

William Clay Ford, Jr. will remain executive chairman.

So what does Mulally know about the car business? Is he a car guy or just another bean counting wonk?

INVESTOR'S CRITICISM OF "THE WAY FORWARD"

Ford Motor Company's "Way Forward" has been roundly analysed and even criticized. One of the more concise criticisms is found at Mish's Global Economic Trend Analysis: The Way Forward.

Notwithstanding that FoMoCo is still developing its latest plan, Mish summarizes what he thinks we know so far about the "Way Forward" as follows:


"1. Cut 4th quarter production 21%
2. Offer 0% financing for 6 years
3. Court Nissan
4. Sell Jaguar and Land Rover
5. Reduce list prices as compared to 2006
6. Close 14 North American plants
7. Eliminate 30,000 jobs in the US
8. Create 150,000 assembly jobs in Mexico
7. Increase Mexican made components by 300%
8. Shift some professional engineering and purchasing jobs to Mexico
9. Offer worker buyouts
10. (If all else fails) Take the company private"

Of course the foregoing summary adopts some speculative points (such as the extent of FoMoCo "Run to the Border" or whether "Waiting for Ghosn" is wishful thinking) and doesn't capture others (such as FoMoCo's increasing reliance on Mazda and Volvo for platforms and engine technology, FoMoCo's increase in warranty lengths, and FoMoCo's abandonment of the true luxury market for its Lincoln brand). It also inflates temporary tactical measures, such as the zero-percent clearance sale to major points of "The Way Forward."

Still, Mish identifies two questions suggested by his summary.

A. "Is this plan the "Way Forward" or are these acts of desperation?"

While certainly a judgment call, Speedzzter has often argued that "The Way Forward" smacks more of desperation than a real plan at "right sizing" and establishing the necessary predicate to recapture market share. Moreover, it is unclear whether the "Way Forward" actually addresses the cultural and institutional factors which led to the loss of FoMoCo's edge and nine-year decline. In some ways, the points cited are not unlike railroads in the mid 20th Century cutting back on routes and services in search of profits.

B. "After all the jobs and parts are moved to Mexico and China will Ford still be running ads to 'Buy American'?"

What ads to "buy American?"

Obviously Mish is being sarcastic, playing off of Bill Ford's occassional "driving American innovation" commercials, but this point deserves a little serious analysis.

The Detroit 3 have all been reluctant to play the nationalism card due in part to the international complexity of the automobile business and, likely, fears of somehow being labeled "racist." Thus, they have not effectively used guilt and national pride as a motivation to attack foreign invaders and call selfish and unreliable Americans "home" to products designed and built in the U.S.A. While FoMoCo is based in the U.S.A. and still employs more "Americans" than all the transplants combind, it operates as a multinational corporation with few parochial ties. That indicates that what is best for FoMoCo may not be best for America, and vice versa.

The dwendling number of FoMoCo faithful probably would relish it if Ford made a substantive argument for buying American, even with the caveats of international sourcing (caused by production efficiencies, lax government oversight and idiotic disincentives to domestic production). But FoMoCo will never take the "bold move" to attack on nationalistic grounds or point to the harm that internationalization is creating in America's withering industrial base.

And as troubling as FoMoCo's substantiated and rumored future investments in Mexican production capacity are, it is unfair to suggest that "all" the jobs are moving across the Rio Grande. Some will move to China or other lower-wage regimes. Others will remain in Dearborn or other U.S. venues (at least until such time as FoMoCo is acquired by some foreign multinational).

The real problem is that no one has created a "Harley-Davidson" moment in the minds of the customers. Customers aren't led to believe there is anything unique or special about Automobiles done in the American ideom. Automobiles are widely viewed as a somewhat fungible commodity. None of the manufacturers are making the case for "American innovation" (notwithstanding FoMoCo's occassional references to it). In fact, most builders seem to run FROM Americanism (except Toyota, who is desperately trying to convince everybody that it's as "American" as "hotdogs, apple pie and Chevrolet"). For example, DCX's Dr. Z promotes "German engineering" and William Clay Ford, Jr. himself lauds the wonders of "Volvo" (Swedish) safety. These metamessages play into the long-standing immigrant ethos favoring things that are "not invented here."

For years, "old Europe" was the traditional repository of craftsmanship. Stereotypically, Italy and France led in design, Germany in technology and the United Kingdom in efficiency and quirky, sporting innovations. The emergence of the Asians as a technological force, together with the decline in the Continental work ethic (coinciding with the rise of European socialism) have shifted these perceptions somewhat, but not their ultimate result. "Not invented here" still reigns supreme in American consumerism.

The Far East has emerged as the go-to source for compact electronic technologies and exceedingly reliable systems (notwithstanding that much of the fundamental research behind these came from North America).

Now car buyers in masse ignore the objective results from J.D. Power surveys and even their own showroom perceptions in favor of a herd mentality and the intangible "zen" of Asian automobiles.

Even "old Europe" has suffered. But instead of contracting and waiting to be overwhelmed, many of Europe's surviving manufacturers have continued to seeking advancement of the art and science of automobility.

The salient questions then become, how does FoMoCo tap nationalism in America and how is it advancing the art and science of the automobile.

In short, if FoMoCo's "Way Forward" isn't about both, then it might as well move "all the jobs" to the lowest cost producer and watch its marketshare sink on average one full percentage point per year into oblivion. If FoMoCo believes that if can build a better, more soulless transporation appliance than the Asians, it's sadly mistaken. Detroit's Woodward Avenue wasn't packed a couple of weeks ago to celebrate the Asian hybrid or the perfect Asian minivan!

The "Way Forward" here must recapture the American spirit and actually drive--not just talk about driving-- American innovation.

Cribbing Volvos and Mazdas and assembling them in Mexico just doesn't cut it under this standard.

"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/)]

MARKETSHARE SLIDE WORSENS FOR FORD MOTOR COMPANY (R)

It just gets worse and worse . . . .

According to a report in Automotive News "Ford's domestic brands have lost 1.1 percentage points for the year to date." www.autonews.com

"Market share for [FoMoCo's] domestic brands was 16.8 percent at the end of August, down from 17.9 percent for the year-earlier period.

Ford sales analyst George Pipas told Automotive News "When the consumer is moving away from the segment where we have a 35 percent share and is moving toward small cars, where we have a 7 percent share, that's not very conducive to slowing the rate of decline or stabilizing or increasing market share."

Part of the problem, of course, if FoMoCo's poor selection of small cars.

Other than the "Mexican Mazda" CD3 sedan (Fusion/Milan/Zephyr/MKZ) and minor restyling of the previous generation Focus, FoMoCo doesn't offer much to match up with huge variety of small cars competing for economy-minded customers.

Ford insiders maintain that the CD3 is a modest hit. But FoMoCo's standards for a "hit" are so low these days that just not losing business is probably a "hit" in Dearborn.

FoMoCo is pinning signficant short-term hopes on the new "Edge" crossover and the underpowered 3.5 Duratec to reverse its fortunes. Yet FoMoCo apparently will continue to ignore several niches, such as cheap, yet entertaining youth market cars (Scion), factory "pocket rockets" (Civic SI, Cobalt SS, Caliber SRT-4, Volkswagen GTI), homologation-type high performance all wheel drive specials (Mitsubishi EVO, Subaru WRX), subcompacts (Honda Fit, Toyota Yaris, Mini Cooper) and alternative body styles (convertibles, coupes, "box" trucks).

FoMoCo partner Mazda is, however, having some success with its quirky Mazda 3 and Mazdaspeed 3. Neither the success nor the advanced turbocharged powertrain are available in the more prosaic domestic Ford models.

FoMoCo also offers no fuel-efficient sports cars, other than the Mazda Miata.

You'd think with FoMoCo's problems in small sedans, that it would have a slate of luxurious, street-burning "gas guzzlers" at the other end.

Nope. FoMoCo's shelves are bare there, too.

While Chrysler offers perhaps the finest luxury-sports sedan available in America for less than $50,000 (Chrysler 300 C SRT-8) along with a fairly decent range of lesser models (Dodge Magnum R/T, Magnum SRT-8, Charger R/T, Charger R/T Daytona, Charger SRT-8 and Chrysler 300 C), FoMoCo offers not ONE MODEL in the power-to-weight range or performance envelope of these cars.

But that's just because FoMoCo is concentrating on fuel economy, right?

Not really.

While FoMoCo's sedans do best the most extreme examples cited above (e.g. the SRT-8s) FoMoCo's newest FWD-based sedans aren't exactly class leading at the pumps. The EPA rates FoMoCo's 4 cylinder Fusion at 24 mpg city and 32 mpg highway and the Fusion 6 at 21 mpg city and 29 mpg highway. Similarly Five Hundred is rated at 21 mpg city and 29 mpg highway. Decent numbers to be sure, but they only roughly match Camry (23 mpg city/33 mpg highway (Camry four/Automatic) and 21 mpg city/29 mpg highway (Camry six/automatic), are only slightly better than the economy versions of Chrysler's large RWD sedans (21 mpg city/28 mpg highway (Chrysler 300 2.7), 19 mpg city/27 mpg highway (Chrysler 300 3.5), 17 mpg city/25 mpg highway (340 h.p. Dodge Charger R/T) and lag behind GM (21 mpg city/31 mpg highway (Impala 3.5) and 18 mpg city/28 mpg highway (303 h.p. Impala 5.3 V8).

Of course FoMoCo offers nothing to match hot (in terms of sales), headline-grabbing economy sedans, such as the Toyota Camry hybrid, the Honda Civic Hybrid or the Honda Accord hybrid.

FoMoCo has a line-up of "competent" sedans, but nothing that really causes potential sedan buyers to lie awake at nights. And until FoMoCo can figure out how to break away from the pack of competent "transporation appliances," its results will continue to trend lower and lower.

CONSUMER REPORTS RIPS ON ETHANOL

America's favorite group of know-it-all nannies--Consumer Reports- weighs in on the ethanol debate in a cover story this month.

As could be easily predicted, the magazine takes a dim view of E85, undoubtedly recognizing that its potential as a high performance fuel conflicts with the liberal dream of forcing everyone into tiny econoboxes, mass transit and vanpools.

Of course anti-CR conspiracy theorists will note that E85 isn't much of a priority for the Japanese car makers, whose products CR typically fawns all over (CR is probably the single greatest sales gimmick of the Japanese car builders, notwithstanding serious methodological concerns over CR's survey process. See http://www.allpar.com/cr.html; http://www.truedelta.com/pieces/newdots.php )

The crux of CR's argument is that although E85 produces fewer oxides of nitrogen, it lowers fuel efficiency by 27 percent (based on CR's testing of Chevrolet Tahoe) and thus won't save drivers money, even if they can find it outside the Corn Belt.

They also look askew at government incentives aimed at boosting production of flexi-fueled vehicles:

"[T]he government credits FFVs that burn E85 with about two-thirds more fuel economy than they actually get using gasoline, even though the vast majority may never run on E85. This allows automakers to build more large, gas-guzzling vehicles than they otherwise could under Corporate Average Fuel Economy rules. As a result, these credits have increased annual U.S. gasoline consumption by about 1 percent, or 1.2 billion gallons, according to a 2005 study by the Union for Concerned Scientists." http://releases.usnewswire.com/GetRelease.asp?id=71591

CR, of course, stays away from the real attraction of E85 for enthusiasts--high octane and the ability to absorbe more excess combustion heat than straight gasoline--two advantages that can be put to significantly higher and better use in properly-tuned forced induction engines.

CR apparently just can't understand why anyone would want to do such a thing . . . .

IS IT WILLIAM CLAY FORD, JR.'S FAULT?

In a column entitled "Bill Ford has reached defining moment," Daniel Howes writes a spirited defense of the embattled Ford scion and Ford Motor Company (tm) C.E.O.

In Howes's mind, the real problem is in all those myopic Wall Street wonks and know-it-all FoMoCo retirees, neither of which recognize that Ford's problems started long before Bill Jr's watch.

Perhaps tacitly acknowledging the emerging "Waiting for Ghosn" cult, Old Detroiter Howes opines "But Bill Ford isn't going anywhere, which doesn't guarantee he'll be CEO until he's 60 because he doesn't have to be. He's an owner and -- this is the important part -- will be regardless of his title, meaning he has more skin riding on his company's future than any other industry CEO." http://www.detnews.com/apps/pbcs.dll/article?AID=/20060901/AUTO02/609010427/1148

Of course the problem with Howes's defense of Bill Jr. is that it simply ignores the facts:

1. FoMoCo's market share has declined for NINE STRAIGHT YEARS, dating back to the twin failures of the 1996 Taurus "Fishmobile" and the too-cramped-for-Real-Americans Mondeo/Contour (a/k/a the "Junior Fishmobile").

2. Bill Jr. has been in a position to influence the direction of FoMoCo since 1999 (and arguably even earlier given his family's extensive holdings) And in the wake of Jac "the Knife" Nasser's failures--epitomized by FoMoCo's failed internet strategy and the Explorer-Firestone fiasco, Bill Jr. has been in the top job since October 2001.

3. If Bill Jr. had "the answers" wouldn't we have seen them in the nearly FIVE YEARS he's been at the controls? Instead, we've got a huge list of fits, starts, flip-flops and missed opportunities.

4. Bill Jr. may eventually recognize, as his uncle Henry II did over fifty years ago, that having one's name on the building doesn't make one an expert in the car business. He's taken some steps in that direction with the elevation of Mark Fields and the creation of a "Management Committee" after finally purging out all those "retirees" Howes blames for FoMoCo's decline. But Bill Jr.'s epiphany won't come soon enough to undo the damage of the wasted 2001-2006 period.

5. The CD3 and D3 sedans "developed" (mostly cribbed from Volvo and Mazda) on Bill Jr.'s watch are underwhelming and arguably uncompetitive. FoMoCo' sedans are down on BOTH horsepower and fuel economy to much of the competition.

6. Bill Jr.'s FoMoCo has let profitable niches, such as the police car and livery trade, rot by mostly stopping development of the Panther and this neglect has drastically weakened the retail demand for these unique models (Why buy a new car that looks like a 1998 model and has less power than a new Honda?).

7. While Bill Jr. did permit a redesigned Mustang for 2005, his bean counters saddled it with weak engine internals, too few variants to adequately cover the market, less than optimal fuel economy and inadequate power in the mass-produced GT model.

8. While Bill Jr. did permit the GT supercar and the Shelby GT500, he starved SVT and Ford Racing Performance Parts, decimated the number of FoMoCo supported NASCAR teams (reducing Ford's chances to Beat GM, DCX and now Toyota on the track), failed to engineer a return to Indianapolis, squandered the valuable Cosworth legacy, and killed FoMoCo's decades-long tradition in Formula One participation without replacing it with another high-profile international competition alternative.

9. Bill Jr.'s FoMoCo has failed to recognize and adapt to the resurgence of rear wheel drive in premium, luxury and high performance niches.

10. Bill Jr. failed to have a contingency plan for $3.00/gallon fuel prices, which have been foreseeable for a long time.

11. On Bill Jr.'s watch, FoMoCo failed to properly develop the Focus as a viable alternative to Honda and Toyota (and now Scion) in the youth market.

12. On Bill Jr.'s watch, the 6.0 PowerStroke fiasco damaged FoMoCo's truck reputation and allowed DCX and GM time to catch up in turbo-diesels.

13. On Bill Jr.'s watch, the new F-150 came in too heavy, without high performance options, without manual transmissions, without fuel-saving multivalve engine technology, and without turbo diesel engine options.

14. On Bill Jr.'s watch, FoMoCo's minivans have lagged the competition in power, economy, innovation and marketshare. Now FoMoCo is giving up on the segment, in favor of "people movers."

15. On Bill Jr.'s watch, an unnecesary and divisive "boycott" has damaged FoMoCo's dealer base, especially in the "Bible belt" without yielding any particular benefits to the company otherwise.

16. On Bill Jr.'s watch, Ford's SUVs have continued to decline in marketshare, notwithstanding redesigns, because they lack sufficient power, economy and value to stay competitive (especially in trendy niches such as luxury SUVs).

17. On Bill Jr.'s watch, FoMoCo has failed and refused to adopt new technologies, such as cylinder deactivation, "twin-charging," turbocharging (in North America), electric-clutched superchargers, broad use of variable intake runner technology, broad use of variable valve lift and timing, and even off-the-shelf multivalve heads in some applications.

18. On Bill Jr.s' watch, the 3.5 Duratec, which is touted by some as FoMoCo's "engine of the future" came to market late and down on power to the Japanese competition.

19. On Bill Jr.'s watch, Lincoln slipped further behind Cadillac and began its ill-advised move downward into the morass of "near luxury."

20. On Bill Jr.'s watch, the Japanese took virtually all of the praise and adoration for development of hybrid-electric vehicles, while FoMoCo stalled, delayed and flip-flopped in this image-building (yet otherwise relatively meaningless) segment.

21. On Bill Jr.'s watch, FoMoCo continued its failure to offer any affordable alternative to Chevrolet's Corvette.

22. On Bill Jr.'s watch, FoMoCo basically killed the storied Thunderbird nameplate with an effete, boulevard poser in the obviously failed mold of Chrysler's Maserati TC, Buick's Reatta, and Cadillac's Allante.

23. On Bill Jr.'s watch, FoMoCo flipflopped on the "Hurricane" truck engine project and failed to leverage its advantages in multivalve overhead cam engines in V8 markets (while the Japanese continued to make inroads with their DOHC Four-Valve V8s and V6s, and DCX and GM dominated the large V8 market).

24. On Bill Jr.'s watch, FoMoCo failed to take any marketshare away from GM in the opinion-leading aftermarket repower niche. FoMoCo's line of "crate engines" simply aren't competitive on variety, price, features or availability.

25. On Bill Jr.'s watch, FoMoCo failed to develop a competitive sub-Focus subcompact for the North American Market.

26. On Bill Jr.'s watch, FoMoCo allowed the Taurus to decline into a fleet car sold at commodity prices and failed to develop competitive alternatives to Toyota Camry and Honda Civic.

27. On Bill Jr.'s watch, FoMoCo failed to make use of Eaton supercharger technology (except in a few expensive niche and import models), notwithstanding that it had mostly funded the development of it. However, DCX, GM and others have greatly benefitted from this "Ford" technology.

28, On Bill Jr.'s watch, Mercury has floundered as a badge-engineered marque with a lack of clear direction and poor sales, despite having an exemplary initial quality.

29. Bill Jr. has failed to solve the paralysis-by-analysis problem fostered by FoMoCo's committee system, causing products that do make it through to be too late to market, too conservative, tepid in design and generally uncompetitive.

30. On Bill Jr.'s watch, FoMoCo's sales have continued to shrink, declining 12% in the most recent sales month (August 2006) to 255,112--notwithstanding a blow-out Zero percent financing sale and increased warranty coverage.

31. On Bill Jr.'s watch, FoMoCo hasn't developed a reliable method to locate "stars" in the automotive world, attract them into the FoMoCo's orbit, and to empower them to build legendary motorcars.

32. On Bill Jr.'s watch, FoMoCo has failed to leverage its associations with Panoz, Roush, Saleen, Steeda, MG, Noble and Morgan by providing them with power-adder ready DOHC 4V engines at reasonable costs, and exploiting the favorable publicity from the "Powered by Ford" niche marques.

33. On Bill Jr.'s watch, FoMoCo failed to develop the Lincoln LS as a viable alternative to Japanese, American and European sports sedans, instead allowing it to atrophy and die before its time.

34. On Bill Jr.'s watch, FoMoCo has failed to appropriately identify and apply the essential "brand DNA" of its various nameplates, leading to such fiascos as pouring millions into Jaguar in the hope that it would be successful selling Mondeo-based compacts and ignoring FoMoCo's legacy as the company which brought low-cost V8 power to the masses (ironically, none of FoMoCo's latest sedans will accept a FoMoCo V8) .

35. On Bill Jr.'s watch, FoMoCo neglected the compact truck segment, allowing Ranger to age ungracefully, while competitiors continued to invest in the segment.

36. On Bill Jr.'s watch, FoMoCo's stakeholders, such as its salaried workforce, its union workforce, its dealers, its suppliers, the communities which depend on these groups of stakeholders, and ultimately, FoMoCo's loyal customers, have all suffered by virtue of the foregoing FoMoCo failures and others too numerous to mention.

So, although Daniel Howes is probably right that Bill Jr. isn't "going anywhere," it is highly disingenuous to suggest that he cannot or should not be held responsible for FoMoCo's continuing decline.

Bill Ford's "defining moment" occurred long ago.

His watch has been a failure. His legacy will be always be one of abject inadequacy and missed opportunities. Only because his "name is on the building" and his family controls his future has he survived this long, given FoMoCo's deepening crisis.

He ought to be held responsible. At least somebody should . . . .

HOW MUCH FOR ASTON MARTIN?

Reuters is reporting reactions to the announcement by Ford Motor Company (tm) that its premium sports car brand Aston Martin is for sale.

The real questions are: (1) what potential buyers may be interested? And (2), how much will they pony up for the privilege of taking over the storied brand?

"'Anything is possible,' said Stephen Cheetham, car sector analyst at Sanford Bernstein.'If anybody decides they want it, the prices start to get extremely silly. Rationally, it is worth less than $1 billion and quite a lot less than $1 billion. Irrationally, it may be worth as much as $2 billion,' he added. 'It is one of those assets where you might be surprised where the interest comes from' said one investment banker who follows the auto sector closely. He called Aston Martin an unusual and rare asset that combines elements of luxury and engineering. He thought a buyer intent on expanding the brand could pay around $1 billion for it." www.autonews.com

Of course, the real value of Aston Martin isn't in the bricks, mortar, machinary, designs or even in the brand's exclusive dealer network. It's in the intangibles of market perception and brand positioning. Any number of industrial concerns could probably duplicate the tangible assets of Aston Martin for a relatively reasonable investment. But to duplicate the brand's international awaremess, exclusivity, panache, heritage and "halo appeal" would be much harder.

Purchasing Aston Martin would give the buyer an immediate place among the panoply of ultra-luxury and high performance sports cars. It's like purchasing a premium membership to an exclusive ocean-front golf and country club in that it buys access to the "movers and shakers" served by such club. It carries a cachet that few nameplates can match. And it provides the opportunity for an enterprising industrial concern to have an elite division for showcasing technical and design prowess.

Of course FoMoCo gives all this up in the short-sighted pursuit of cash. But then FoMoCo often fails to take the "long look." Many times FoMoCo has failed to appreciate the symbolic and intangible costs and benefits of its penny-pinching decisions.

Selling Aston Martin isn't a "car guy's 'Bold Move.'" It's just another "bean counter's" gimmick calculated to give a fleeting "crack pipe" hit to a quarterly report and a temporary bump in share prices.

It's just another sad step in the slow dismemberment of the Ford Motor Company empire.

(Now if FoMoCo's William Clay Ford, Jr. would just sell the Lincoln-Mercury division to someone with a clue . . . .)