Bad Ideas Dept.: Ford Ignores History, Abandons Cars Except For the Mustang

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Ford used to be known as “the better idea people.” Its recent announcement that it will jettison all of its U.S. sedan inventory, keeping the Mustang as its sole coupe, and become a truck and SUV company puts a the final nail in that coffin.

If you’ve followed Ford’s progress over the last few decades, it should be pretty clear that it really doesn’t know what it does anymore. Case in point, in October of 2017, it announced it wasn’t a car company anymore, but a “trusted mobility company.” From its press release:

“Ford was built on the belief that freedom of movement drives human progress,” said Jim Hackett, who became Ford president and CEO on May 22 of 2017. “It’s a belief that has always fueled our passion to create great cars and trucks. And today, it drives our commitment to become the world’s most trusted mobility company, designing smart vehicles for a smart world that help people move more safely, confidently and freely.”

Yesterday, in a call with investors, it announced “Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America.”

Sedans, as you may have noticed, have had a rough go of it over the last few years, as American consumers shift their preferences toward crossover SUVs — tall station wagons, essentially, based on sedan platforms. Ford’s current car lineup other than the Mustang includes the Fiesta, the Focus and the Fusion.

Find a Ford Fusion at BestRide.com

But the idea that sedan sales are dead is ludicrous. Ford sold 354,623 Fusions in the 2017 calendar year, plus another 158,385 Focus models. Those two cars represent almost 3% of all the cars sold in 2017. That’s a pretty big number to watch walk out of your showroom, right into your competition’s retailers.

Follow the stock price and you can sense the desperation, and it also gives you a handy map for when its last big wager on trucks and SUVs went wrong:

That high was in April 1999, when Ford was selling Explorers, Expeditions and Excursions like they were going out of style.

Which they were.

In February of 2000, KHOU-TV in Houston, Texas ran a story about tread separation in the Firestone Wilderness tires that Ford used as standard equipment on the Explorer. In March that year, NHTSA opened an investigation. Six months later, Congress opened an investigation and all hell broke loose.

Find a Used Ford Explorer at BestRide.com

But that wasn’t the entire story. Ford was made horrible, rash, costly ideas an integral part of its business plan in the years when its stock plummeted. Right at the peak of its stock price, it went on a buying spree, picking up brands like Volvo, Jaguar, Aston Martin and Land Rover, moving them into a world headquarters in London, the most expensive place on earth, and schlepping North American operations across the country to a new Headquarters in Irvine, California.

The BUILDING ALONE cost $68 million dollars. It is now the headquarters of Taco Bell. No, we did not make that up.

“Chalupa Central” is located there because the Premier Automotive Group was one of the most legendary failures in the automotive business. By 2006, all of the European brands in PAG — Volvo, Land Rover, Jaguar and Aston Martin — were either sold or on the way to being sold to companies in Germany, China and India.

And this isn’t the only time Ford has made a rash product announcement, only to be left twisting in the wind while other car makers, er, “trusted mobility companies” redouble their efforts toward what they do best.

In 2010, Ford announced it was no longer going to sell the popular Ranger pickup truck. The brilliant minds at Ford had decided that by offering the Fiesta (which it will now kill off) and the Ford Transit Connect, it had the bases covered and the Ranger had outlived its usefulness.

The only problem was that the Transit Connect cost $7,000 more than the Ranger, didn’t have four-wheel drive, and wasn’t appealing at all to pickup drivers. Did any one of your truck-loving neighbors trade their Ranger in for a Transit Connect? Yeah, we didn’t think so.

Three amazing things happened after Ford quit producing the Ranger in 2011:

  1. The last remaining mid-size pickup truck — the Nissan Frontier — received an unprecedented sales boost. In January of 2010, Nissan sold 1955 Frontier pickups. In August of 2016, it nearly cracked 10,000 Frontiers that month. And this is a vehicle that has essentially been untouched since 2006.
  2. Every other manufacturer of midsize pickups (read: Toyota and Chevy/GMC) realized that there was a gaping hole in the market that they could exploit, and did, developing new benchmarks and raking in profit from Americans who liked trucks, but weren’t interested in something full-size.
  3. Used Ranger sales skyrocketed. A four-wheel drive, extended cab Ranger in good condition with relatively low mileage is essentially depreciation-proof right now.

Find a Used Ford Ranger at BestRide.com

Of course, the result is that eight years later, Ford will re-enter the market with an all-new Ranger in 2019. It will also launch an all new Bronco — another vehicle it abandoned in 1993.

Ford noted that there’s no change yet for Lincoln. It invested a ton of money in the rollout for the Continental. Have you ever seen a Continental without a livery company’s information on the rear decklid?

The only car not to be touched in this announcement is the Mustang. Of course, the roof would’ve caved in if Ford announced it was killing one of its most storied nameplates. But the Mustang barely registers in sales volume every month. In its best month in 2017, Ford sold 9,120 Mustangs. Toyota sold 35,648 Camrys. If you’re talking about dollars and cents, keeping a four-passenger sport coupe makes no financial sense at all.

If you’re starting to sense a pattern here, you’re not alone. Ford makes some exceptionally good products, but it really has no idea what business its in right now. A “trusted mobility company” that doesn’t have a full range of automobiles in different sizes? That seems like a recipe for leaving every major city in the United States for the competition.

The good news is that Ford ends up reversing all of these decisions within a decade, anyway. You’ll get a sense of how quickly it can do that when the price of gasoline inevitably jumps in the coming years.

 

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Craig Fitzgerald

Craig Fitzgerald

Writer, editor, lousy guitar player, dad. Content Marketing and Publication Manager at BestRide.com.