The New...Ford?

The current run-up in energy costs has and will continue to have great repercussions on the manufacturing of cars and trucks both at home and abroad. All three of America's domestic manufacturers have struggled to maintain pace with the more flexible factories and fuel-efficient models of overseas automakers, specifically Japanese automakers. There has and in many cases continues to be great question as to whether GM, Ford and Chrysler can even survive this most recent economic downturn, especially with their reliance upon now-unpopular trucks and SUVs for their largest profit margins.

Many assumed that the best candidate for survival was General Motors with its seemingly unending line of vehicles. The company could eliminate two more divisions (a prospect not unlikely in the coming months and years) and still be two or three deep with models in every class of vehicle. GM's size has enabled it to weather hard times better than its American counterparts, but it still suffers from antiquated manufacturing models and quality control issues, as well as financial woes. Just this morning the company announced a second-quarter net loss of $15.5 billion, or $27.33 per share, compared with a profit of $891 million, or $1.56 per share a year earlier. This is the third-largest loss in the history of General Motors.

On the other hand, Ford Motor Company just took a huge leap forward last week with the announcement that they will totally restructure their line of vehicles, differentiating the Mercury brand more from Ford and Lincoln, and incorporating more of their European models into their American line. Under the leadership of CEO Alan Mulally, the financial situation that Ford is currently in (they recently posted a $8.7 billion loss) may finally be the impetus that drives Ford back to profitability. Not only are European Fords more fuel efficient, they are a higher quality vehicle with top-notch components and they have more of a slant toward the performance enthusiast's driving tastes. Many (including myself) have longed to see the European Focus and other Euro models come to the United States, and it seems we may finally be getting our wish.

What's important here is that Ford is finally abandoning a strategy for designing and manufacturing cars that lost its effectiveness in the early eighties. This new model for Ford will put a premium on flexibility of production and quality in design. The difference will be bold and immediate, and should propel Ford forward in sales and profit. Keep an eye on Ford in the next few years...you're going to see things you've probably never seen before- cars and trucks that you'll really want to drive.

Vehicles Pictured (Top to Bottom): Ford Focus ST (Europe), Ford Kuga (Europe), Ford Verve Concept (US)
Sources: Detroit Free Press, Autoextremist.com, MSNBC.com