Ford Retools Plant – This Time To Make Cars People Want
Yes, this plant — idle since November — will soon be retooled so it can start producing smaller, greener vehicles including an all-electric version of the Ford Focus. Yes, Ford seems better positioned than any of the Big Three to make the pivot from gargantuan Navigators and Expedtions to more economical models that get good mileage without sending a black cloud of pollution everywhere they go. So, yes, Ford deserves a pat on the back for heading in a direction many consumers appreciate. (That bit about consumer appreciation for smaller cars is evident in the many, many vehicles that Japanese and Korean automakers produce and sell in this country. Would that Ford could produce cars of similar quality.)
Ford CEO Alan Mullally says stand by. A new deal in hand with the company's unions will allow Ford to build cars less expensively, less burdened by legacy costs. That will translate into lower sticker prices and a better competitive position in the market place.
But here's the obvious problem with all the hand-clapping and frozen smiles: there is absolutely no guarantee — or even a good sign yet — that the American consumer will now turn to Ford for small cars. Ford has made small cars for years and lost a ton of money on them. Now Mullally assures us that these will be really good cars. I thought they were supposed to be making good cars all along, but I guess I'm old-fashioned. Actually, Ford was making a really good small car and it was selling like hotcakes in Europe and Asia. It's called the Ford Focus. There's a Ford Focus in this country, too, but it bears little resemblance inside or out to the car that is so popular abroad. So Ford has decided — belatedly — to try to bring the successful styling to this country as well. Elementary, you say? Apparently not in the car business.
Ford can make this $550 million investment because it is in comparatively good shape financially. It farsightedly secured a $30 billion line of credit from private investors back in 2006 and the cash has helped to see it through the economic downturn. Chrysler and GM, of course, have been less lucky in their investment strategies to say the least. Mullally now envisions an economic rebound later this year and even profitability for Ford in two years. Wow. Profitability! Considering how far and how fast the auto industry has fallen in this country, that would be some kind of accomplishment. Of course, if the economy does not rebound as rapidly as Mullally hopes, many analysts believe Ford will be forced to line up — hat in hand — for the same kind of financial help from the government that its weaker domestic rivals have already secured.
So it's all well and good for the folks at Ford to be enthusiastic and excited about their company's prospects, but all they have right now is the tenuous hope that — after years of making the wrong moves — they are finally getting it right.