<Continued from Last Page

Building Anew:

On the positive aspect of the plan are several divisions of strategy to re-build the American business. This is the part of the “Way Forward” plan that the company would prefer we all focus on, so lets have a look. Bill Ford opened the announcements by saying, “Ford Motor Company was solidly profitable in 2005 and growing around the world. The next chapter in our history will be remembered for a renewed commitment to innovation and as the time we moved boldly to prepare Ford’s North American business for global competition.” The company stated honestly that 2006 will not be a banner year, making no promises that results of the new plan will be seen in the short term.” We must be guided by our long-term goals of building our brands, satisfying customers, developing strong products, accelerating innovation, and, most importantly, producing a sustainable profit from our automotive business,” said Bill Ford.

The company plans to re-vitalize its products and brands in America by investing more in engineering and design, as well as in new technologies such as hybrid vehicles. Announced today in the midst of bad news was that hybrid models of the Ford 500, Ford Fusion, and Ford Edge families of products are forthcoming. Plans are in the works to strengthen Ford as a brand, focusing on its American heritage. They have researched their current brand image and product successes and have come to some pretty resolute conclusions. “One of the most important findings from this research is that Americans really do want to buy American brands, as long as they are competitive with the imports,” said Mark Fields, Executive Vice President, Ford Motor Company; President, The Americas. “We know this, because it’s already working in some segments today, such as the success of the new Ford Fusion in the import-dominated midsize car market.” He added, “Of all the leading automakers, we believe Ford is America ’s Car Company because of where we’ve been. In terms of economic and social influence, there is no other company that’s had a greater impact on the lives of people in the U.S. and in the 20th century than Ford.”

He is right about that. Ford Motor Company is indeed one of the last true family automakers that remains. People identify with the story of Henry Ford growing up on a farm and becoming one of the most successful and influential entrepreneurs in American history. This still means something to buyers. The key is that those who have inherited this legacy have to fill those shoes. “The challenge going forward is to give our customers, employees, retirees, dealers, suppliers and investors a reason to believe in Ford. That is going to be our focus,” Fields said. “Our Way Forward is not a retreat into smaller markets, but a retaking of the American marketplace. It’s time to play offense. It’s time to fight back.”

Of the plans for the immediate future, the company announced that it is increasing its product investment in Ford F-Series truck leadership; increasing momentum on its blockbuster cars today, such as the Ford Fusion and Ford Mustang; introducing more design innovations – for more “at a glance” sheet metal changes – and introducing more safety innovations throughout its North American lineup. “We know how to play offense and play to win,” Fields said. “Our plan will deliver more products – from small cars to our largest trucks – that are unmistakably Fords.”

Most important is the shoring up of the brand’s appeal and resale values. One of the most competitive advantages that import cars have in the marketplace is a resale value that does not compare to most American cars. Ford plans to change this by offering what they call “Straightforward Pricing”. Ford is accelerating a new “clear-and-simple” pricing strategy that began with the introduction of the Ford Fusion and Ford Mustang. Ford plans to reduce the MSRP of its products and dramatically reduce and cap rebates as it introduces new products.

“ We will bring sticker prices more in line with actual transaction prices and cap ‘cash on the hood’ rebates as we introduce new cars and trucks into the marketplace. It will protect our margins and consumers, too, through higher resale values,” Fields said. Reduced sales to rental car fleets was also implemented in 2005 to prevent the markets being flooded with inexpensive rental returns as well as to allay the image of Ford’s being “rental car” grade.

The “Way Forward” plan encompasses many other areas of the company from improving quality, cutting costs, and renegotiating labor agreements. So many issues we don’t have the room on this website to tackle individually. By now much of the plan is already in place and the headlines of today’s announcement have been blasted across the airwaves. Our take on the “re-model” is that it simply must work. It must succeed. If it does not, Ford Motor Company may not be the same company we have all known in just a few short years. The good news is that Bill Ford has circled the wagons and brought in high powered people to run for the team, people who have a track record of winning. In that we shall watch.