Ford: Over 100 Years and Possible Extinction

Ford has made mistakes that have resulted in over 12 billion dollars in losses in 2007 and a few billion expected for 2008. Their first mistake was to sacrifice quality. In the 1990s, Ford became well known among people and auto mechanics. To them, Ford became known as Ford: Fix Or Repair Daily. I owned a 1995 Ford Escort wagon and while it was a good, convenient car (helped us move), there were ups and downs with the reliability. During one period of time, the transmission went out as well as the timing belt soon after. Mechanical failures with seat belts and windshield wipers occurred. The car lasted to a little over 150,000 miles. This is bad when compared to the Toyota Corolla we owned previously that lasted over 200,000 miles with fewer problems. The other problem was their environmental record. They had low fuel economy and relied on truck and SUV sales to sustain profits. This helped in the 1990 and early 2000s, but came back to haunt them. They also stopped producing natural gas vehicles, which brought down their overall fuel economy and made them an enemy of environmentalists. These issues are not exclusive to Ford; the GM and Chrysler made similar mistakes.

The Effects

The US auto industry employs 1 in 16 American workers. Job cuts have taken a toll on the economy and states where the automakers place most of their factories, like Michigan, have seen huge job losses and people moving out.

What Has Been Done

In 2004, Ford Motor Company launched their Way Forward plan. They cut jobs, closed several factories, began production on a hybrid-electric vehicle, and increased quality and safety. Unfortunately, it was too little too late. The Japanese rivals built more hybrids earlier as well as fuel-efficient cars and that investment paid off when gas prices sent truck and SUV sales tumbling. Ford has sped up the pace of their turn-around recently. They are introducing more models sooner as well as a broader range of environmental vehicles. Today, they have three hybrid-electric models across their brands (Ford Escape, Mercury Mariner, and Mazda Tribute) and plan for two more by this year (Ford Fusion and Mercury Milan). They are increasing their flexible fuel vehicle range to include the fleet large cars (Ford Crown Victoria, Mercury Grand Marquis, and Lincoln Town Car), their popular pickup truck (Ford F150), vans (Ford E-150 and E-250 cargo and passenger), and large SUVs (Ford Expedition and Lincoln Navigator; includes EL). For the safety aspect, they advertise themselves as the "car company with the most 5-star government crash test ratings.” As for quality, they have recently caught up to Japanese rival Toyota; the problem is, most people do not know this and the Toyota brand have become synonymous with the word quality.

The Future

Ford Motor is on the right track to survival today, but has a lot of work to do and a strong competition. Uptown rival General Motors is planning on mass-producing a plug-in hybrid vehicle called the Volt which could paint them as greenest. Ford has technologies like ecoboost up their sleeve, but they have to figure out which future technology (hydrogen, plug-in hybrid, electric) will become popular. They have to make sure quality stays high and they keep up with competition in design. Finally, they need to reach profitability; they scrapped their 2009 goal.

Conclusion

One of the largest, oldest, all-American automakers is on the brink of extinction. They have sold some of the brands they owned (Jaguar, Land Rover, and Aston Martin). They are facing the challenge of competing with less cash and less buyers with few profits in sight. Whether they survive or become a part of history is something that only time will tell.