Ford builds strongest image of Big 3
#1
Ford builds strongest image of Big 3
Ford Motor Co. is trying to pull itself up by its own bootstraps, and it hopes America notices.
As crosstown rivals General Motors Corp. and Chrysler LLC ask the White House for $14 billion in emergency loans just to tide them over until March, the Dearborn automaker maintains it has enough cash to weather the current economic crisis. It is still asking the federal government for a $9 billion line of credit, but it is not asking the Bush administration for immediate cash assistance.
Ford executives think this fact has not been lost on the American people, and it is hoping to use its comparative financial strength to position itself as the most viable of Detroit's Big Three. That might not be saying much -- particularly given that Ford does not expect to post a profit until at least 2011 -- but experts agree that the situation represents an opportunity for Ford to begin rebuilding its brand image.
But this strategy is not without its risks. The biggest danger facing Ford today is a GM bankruptcy, which could pull Ford into bankruptcy court, too. It also knows that suppliers are becoming increasingly jittery about the state of the entire domestic automobile industry and could begin demanding quicker payments than Ford could make. The last thing Ford wants is to be too heavy-handed with its message and risk exacerbating these problems.
"We are trying to tell our story, but we also think it's very important that we don't appear to be turning our back on our industry," Executive Chairman Bill Ford Jr. said Tuesday. "The good news for us is we're starting to get some separation in the customers' minds and people see that we're trying to make it on our own. We're hearing comments in the showroom to that effect."
December is "starting off relatively well," Bill Ford said, noting that his company has already gained a point of market share over the past couple of months -- a significant accomplishment for a business that has seen its share steadily erode for more than a decade.
Analyst Erich Merkle of Crowe Horwath says Ford stands to gain even more market share.
Like most analysts, he thinks Ford has enough cash to make it through until next year when the full benefits of its landmark labor agreement with the United Auto Workers kicks in. As GM and Chrysler struggle just to stay out of bankruptcy court, consumers are less inclined to consider their cars and trucks. And Merkle says Ford has a slew of new products coming out over the next year that should demonstrate just how much progress it has made in its turnaround campaign.
"They're very well positioned for when we come out of this and people start buying cars again," he said, though he added the company needs to be careful not to be too assertive. "Ford can separate itself, but to do that now with everything the industry is going through -- particularly GM and Chrysler -- could hurt everyone."
Ford Americas President Mark Fields says it is all about striking the right balance.
"Our job going forward is to be confident, but not arrogant," he told The Detroit News Tuesday.
The recent Congressional hearings have focused the national spotlight on the domestic automobile industry like never before. For the first time in a long time, the American people want to hear what Detroit's Big Three have to say. Ford sees that as an opportunity to speak to millions of potential customers.
"They clearly understand that Ford is in a different place," said Ford CEO Alan Mulally. "The most important thing is that we help everybody understand where Ford is and where it's going. We're looking at every medium we have to tell that story."
Over the past couple of weeks, the Dearborn automaker has been making its executives available -- not only to major media outlets, but also to newspapers and television stations around the country. Bill Ford himself was the scheduled guest on Larry King Live last night. The company is also being more aggressive in trying to get its message out through online social media Web sites like Facebook.
But analyst Jim Hall of 2953 Analytics LLP says the company could do more. He says Ford needs to make consumers feel like they are part of its solution.
"What you do is say, 'We're working through this with your help. Vote for Ford with your dollars,' " he said. "You make the customer one of the winners. And you can do that without taking the mallet to anyone else."
Even with the right marketing message, Ford still needs to contend with the economy. Its market share may be up, but like every other automaker its sales are down sharply, and there is no sign of a recovery anytime soon.
"At a certain point, if customers are just completely stressed out and tapped out, all the messaging in the world isn't going to get them in," Bill Ford said.
Moreover, while Ford may not need government help today, its finances are still a disaster. The company has lost $24 billion since 2005, its stock is trading for just over $3 a share and its bonds are worth pennies on the dollar.
But Ford continues to aggressively restructure its business to match the actual demand for its cars and trucks, to consolidate its global operations and shed what it calls "non-core operations" like Jaguar and Land Rover to concentrate its resources on saving the Blue Oval itself. It is finally getting credit for the strides it has made in quality, safety and reliability. And Ford is about to begin one of the most aggressive product launch cycles in recent automotive history.
Jim Farley, Ford's global sales and marketing chief, says that's the story Ford needs to share with the American people.
"They're all ready to listen and they're all paying attention," he said. "It may not be the best starting point, but Americans love a good underdog."
As crosstown rivals General Motors Corp. and Chrysler LLC ask the White House for $14 billion in emergency loans just to tide them over until March, the Dearborn automaker maintains it has enough cash to weather the current economic crisis. It is still asking the federal government for a $9 billion line of credit, but it is not asking the Bush administration for immediate cash assistance.
Ford executives think this fact has not been lost on the American people, and it is hoping to use its comparative financial strength to position itself as the most viable of Detroit's Big Three. That might not be saying much -- particularly given that Ford does not expect to post a profit until at least 2011 -- but experts agree that the situation represents an opportunity for Ford to begin rebuilding its brand image.
But this strategy is not without its risks. The biggest danger facing Ford today is a GM bankruptcy, which could pull Ford into bankruptcy court, too. It also knows that suppliers are becoming increasingly jittery about the state of the entire domestic automobile industry and could begin demanding quicker payments than Ford could make. The last thing Ford wants is to be too heavy-handed with its message and risk exacerbating these problems.
"We are trying to tell our story, but we also think it's very important that we don't appear to be turning our back on our industry," Executive Chairman Bill Ford Jr. said Tuesday. "The good news for us is we're starting to get some separation in the customers' minds and people see that we're trying to make it on our own. We're hearing comments in the showroom to that effect."
December is "starting off relatively well," Bill Ford said, noting that his company has already gained a point of market share over the past couple of months -- a significant accomplishment for a business that has seen its share steadily erode for more than a decade.
Analyst Erich Merkle of Crowe Horwath says Ford stands to gain even more market share.
Like most analysts, he thinks Ford has enough cash to make it through until next year when the full benefits of its landmark labor agreement with the United Auto Workers kicks in. As GM and Chrysler struggle just to stay out of bankruptcy court, consumers are less inclined to consider their cars and trucks. And Merkle says Ford has a slew of new products coming out over the next year that should demonstrate just how much progress it has made in its turnaround campaign.
"They're very well positioned for when we come out of this and people start buying cars again," he said, though he added the company needs to be careful not to be too assertive. "Ford can separate itself, but to do that now with everything the industry is going through -- particularly GM and Chrysler -- could hurt everyone."
Ford Americas President Mark Fields says it is all about striking the right balance.
"Our job going forward is to be confident, but not arrogant," he told The Detroit News Tuesday.
The recent Congressional hearings have focused the national spotlight on the domestic automobile industry like never before. For the first time in a long time, the American people want to hear what Detroit's Big Three have to say. Ford sees that as an opportunity to speak to millions of potential customers.
"They clearly understand that Ford is in a different place," said Ford CEO Alan Mulally. "The most important thing is that we help everybody understand where Ford is and where it's going. We're looking at every medium we have to tell that story."
Over the past couple of weeks, the Dearborn automaker has been making its executives available -- not only to major media outlets, but also to newspapers and television stations around the country. Bill Ford himself was the scheduled guest on Larry King Live last night. The company is also being more aggressive in trying to get its message out through online social media Web sites like Facebook.
But analyst Jim Hall of 2953 Analytics LLP says the company could do more. He says Ford needs to make consumers feel like they are part of its solution.
"What you do is say, 'We're working through this with your help. Vote for Ford with your dollars,' " he said. "You make the customer one of the winners. And you can do that without taking the mallet to anyone else."
Even with the right marketing message, Ford still needs to contend with the economy. Its market share may be up, but like every other automaker its sales are down sharply, and there is no sign of a recovery anytime soon.
"At a certain point, if customers are just completely stressed out and tapped out, all the messaging in the world isn't going to get them in," Bill Ford said.
Moreover, while Ford may not need government help today, its finances are still a disaster. The company has lost $24 billion since 2005, its stock is trading for just over $3 a share and its bonds are worth pennies on the dollar.
But Ford continues to aggressively restructure its business to match the actual demand for its cars and trucks, to consolidate its global operations and shed what it calls "non-core operations" like Jaguar and Land Rover to concentrate its resources on saving the Blue Oval itself. It is finally getting credit for the strides it has made in quality, safety and reliability. And Ford is about to begin one of the most aggressive product launch cycles in recent automotive history.
Jim Farley, Ford's global sales and marketing chief, says that's the story Ford needs to share with the American people.
"They're all ready to listen and they're all paying attention," he said. "It may not be the best starting point, but Americans love a good underdog."
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