Ford goes to the dogs

The other shoe finally dropped this week. Ford Motor Company, following in the footsteps of General Motors, has announced plans to “restructure” itself in an attempt to turn around its North American operations, which lost a whopping $1.6 billion dollars last year. This “restructure” will result in the loss of some 30,000 American jobs, and the closure of fourteen plants. In other words, Ford plans to lay off around 25% of its North American workforce.

Like General Motors, Ford seems to think that the wisest course is to retrench. Well, Ford has, I suppose, in a manner of speaking, been retrenching for some time now. In fact, Ford has seen its share of the American market slide for the tenth straight year. And under the heading of “It never rains, but it pours”, for the first time in 19 years, Chevrolet, not Ford, is now the leading brand of cars sold in the U. S. Well, at least it wasn’t Toyota that took Ford’s Crown. Not yet, at any rate.

It’s hard to believe how hard times have gotten for the Big Two of American car manufacturing. Ford, for instance, held a 24% share of the U. S. market in 1990. It is now down to 17.4%.

As hard as that is to understand, it is much more difficult to grasp Ford’s inability to stop the bleeding. One reason for the large pool of red ink this year, as cited by an AOL news story, was the slide in the sales of the large sports utility vehicles last year. Oddly enough, it was the large profit margin on these vehicles that persuaded Ford to invest so heavily in them instead of passenger cars.

Some good news, if there is any, comes from Scot McClellan, President Bush’s press secretary, who said of the pending downsizing “Anytime anyone loses a job, we’re concerned about it…” Of course, McClellan also said that the economy, in his view “is going strong.” Which means two things, one, that are plenty of minimum wage jobs around, (the only kind the Bush administration seems to produce), and two, that help from the Bush administration will not be forthcoming.

The terrible truth about the American market is this: There are too many players in it right now. And neither Ford nor General Motors seem to be able to attract and keep a loyal base of customers. And I have an idea as to why that might be the case. Neither automaker produces a quality entry-level vehicle. That job has been left to the foreign automakers.

To illustrate this last point, Ford’s entry in this field in the ‘90’s was a car called the Aspire. It was a car that had to contend with the well-made Toyota Corolla. It replaced a similar shoebox called the Fiesta. Yes, it was entry-level priced, but it had very little to recommend it.

There was a joke going around about this car at a local dealership, which had quite a few stripped down models to try and sale. It went “What do you call an Aspire with no air conditioning?” (Which described the most of them on the lot at that time.) Answer-“A Perspire!”

And some people wondered why this model was discontinued so quickly.

Not only does neither of the Big Two produce anything in a quality entry-level car, it seems that every time one of their models is replaced, its replacement will always be considerably more expensive. Take for instance the old Bronco II. This was a sensibly priced four-wheel drive vehicle whose replacement, the Explorer, set off the SUV craze. And the Bronco, known now as the O. J. escape vehicle, was cast aside for a newer model, the Expedition. And there was the old stand-by, the Ford Tempo, a plain car, not unlike the Model T in its dependableness and sturdiness. It was replaced by the Ford Contour. In each instance, the replacement vehicle was not only a better quality vehicle, it was also priced considerably higher, and the buyers of the older models could not always afford their replacement.

And neither carmaker seems to have grasped the obvious. The Detroit auto show is seeing Ford and GM showing off concept versions of high priced sports cars such as the Camaro and Mustang. And Ford, for its part, can show you high priced versions of some of its ‘60’s muscle cars, such as the GT40, or the Shelby Cobra. These cars will go wickedly fast from 0-60, but they won’t do a thing to make Ford a household name again.

And if enough hadn’t gone wrong already, that entry-level field is getting a little bit more crowded. For, from the land that supplies American with the majority of its cheap, plastic crap, comes a Chinese car called the “Geely”.

Don’t laugh too hard. Remember those cheap little Korean brands everyone was making fun of a few years back? It seems they’ve become respectable in a remarkably short time. And if they could do it, well…