Ford - Showing the way \"Back to the future\"

[ozpont]

Ford Seeking a Future by Going Backward

DEARBORN, Mich., July 16 — It was a big victory at the time.
.... Ford outbids VW & Fiat to buy out Volvo.. adding it the stable of Land Rover and Aston Martin... . and exclaims it “21st-century vision" will add a Billion Dollars in annual revenue and sell another million cars.. bring it to # 1 world wide....
... That was in 1999...

     Mr. Bill Ford and Ford’s chief executive then, Australian Jacques A. Nasser worked those plans best but .... those plans have not worked out. And now, with its recent decision to entertain bids for Volvo, Ford appears to be shifting into reverse on its strategy, dismantling the collection of luxury auto companies, including the Land Rover division it bought in 2000, that it once assembled with such confidence.

Alan R. Mulally, who was named Ford’s chief executive almost a year ago, is pushing the company to climb out of $12.6 billion in losses last year by returning to its roots as a mass-market manufacturer, and the fabled foreign brands are no longer considered pivotal to its turnaround strategy.

Ford has company in its retreat. Plans by Chrysler and General Motors during the 1990s to also use foreign brands to expand their global reach have been largely abandoned.

General Motors has already sold off stakes in foreign companies like Fiat and Fuji Heavy Industries that represented its own global foray, while DaimlerChrysler itself, the most ambitious attempt to dominate the international stage, will soon be broken apart.

The Detroit automakers are now refocusing on their core brands.  


In retrospect, Ford’s experience with the Premier group, known as P.A.G., is proof that a car company cannot buy its way to a dominant position in the market, said David E. Davis, founder of Winding Road, an online car magazine, and a longtime observer of the auto industry.

Indeed, the group’s collective sales last year were just over 700,000, or one-third less than the sales goal Ford set for P.A.G. when the group was founded in 1999.

Moreover, the group has lost money in four of the past five years, versus the $1 billion a year in profits that Ford had proclaimed the brands would contribute. (The group, however, did earn a pretax profit of $402 million in the first quarter.)




Jaguar, which Ford bought for $2.5 billion in 1990 in another bidding war, had trouble making the leap to the contemporary luxury market, which grew increasingly crowded with new offerings from Lexus, Mercedes-Benz and BMW.

Ford also poured management time and billions of dollars into fixing Jaguar, claiming as recently as this year’s Detroit auto show that the brand would remain in the company fold, when many industry analysts were saying that it was well past time for Ford to cut its losses.

Volvo has been a different story. It has generated profits of $800 million to $1 billion a year, provided Ford with expertise in safety development, and ranks as one of Ford’s best-selling brands.