News Column

Ford -- On Track to Take Back Auto Market

November 12, 2010

Holly Ocasio Rizzo

September sales alone for Ford, Lincoln and Mercury jumped to 160,873 vehicles, 46 percent more than a year earlier. The Ford Edge crossover led the pack, up 186 percent from a year earlier with 12,815 sold. Car sales rose 40 percent; trucks, 43 percent; and utility vehicles, 61 percent overall. (The Mercury brand will be phased out by the year's end.)

Ironically, as the figures were released, Ford was making waves at the annual Paris auto show with its Focus ST concept, featuring Recaro seats and a 2.0-liter, four-cylinder EcoBoost turbocharged engine that runs cleaner and generates 10 percent more horsepower than the current ST. The new 2012 Focus is due on the market in early 2011.

Dealers Enjoy Business Boost
U.S. Ford dealers, meanwhile, are enjoying the boost. "It's exciting to sell cars for Ford right now," says Charles Hassoun, general manager at Shamaley Ford in El Paso, Texas, a family-owned dealership ranking second in sales volume in Ford's Southwest Region.

"We're not selling more cars, we're selling fewer, but quality is starting to pay benefits because we're picking up market share," says Tony Griffi n, general manager and partner at Horne Ford in Nogales, Ariz.

In Morrow, Ga., near Atlanta, Allan Vigil, owner of Allan Vigil Ford Lincoln Mercury, says: "The product is far and away better than it has ever been. The quality is better than Toyota or Honda right now."

Dealers feel the effect. "Ford quality is amazing, and I can tell by my warranty dollars going down," says Fernando Varela, owner of All Star Ford-Mercury in Palestine, Texas, about halfway between Dallas and Houston.

"The dealership is the last line between the manufacturer and the consumer," Mr. Hassoun adds. "As such, the better the initial product quality is, the easier life is for the dealership. Consumers have spoken, and Ford is listening." This year culminates a decade of listening hard.

Emphasis on Quality
"We started another quality initiative in the late '90s, but we were doing it one line at a time," says Dennis Snyder, president of Rich Ford in Albuquerque, N.M., and past chairman of Ford's National Dealer Council. Mr. Snyder represented heavily Hispanic New Mexico and Arizona, plus Las Vegas on the council.

"Plants were doing everything at warp speed and were asking dealers to take everything they made. We would have 150 days' supply and it would sit on dealers' lots and not get the maintenance attention it should have. We were just out there jamming product," he says.

Rattles, squeaks, malfunctioning handles and mechanical glitches got handled aft er customers found them. To the customer, quality looked like an aft erthought. The company languished in the automotive industry's quality ratings, and it lost money on warranty repairs.

Under William Clay Ford's chairmanship, the company stepped up its quality initiative, getting everyone involved from the plant fl oor to the top management. In two years, the projects saved Ford more than $675 million worldwide. Ford's Main Cheerleader, Alan Mulally Dealers attribute the gains to Alan Mulally, the former Boeing Co. executive who stepped aboard as CEO in September 2006. "If you met him, you'd think he was a cheerleader," Mr. Snyder says. Adds Mr. Hassoun: "Since Mr. Mulally joined Ford, the company has become more responsive to customer concerns and demands, more responsive to the challenges of environmental responsibility and sustainability, and has listened to its dealers and responded with the level of quality and product lineup you see in Ford showrooms today—all of this while facing one of the largest economic downturns our country has ever seen."

Under the One Ford quality plan, Mr. Mulally married the best of Ford's North American and European styling and engineering. High-tech testing ensured that vehicles got delivered to dealers with increasingly fewer warrantyrepair problems, and those that turn up are reported to headquarters within 24 hours. To replace warranty work, which has declined by 30 percent to 50 percent, the emphasis has shift ed to maintenance with conveniences such as 30-minute oil changes that include brake checks. However, Mr. Mulally's decision that matters most to dealers was leveraging the company's assets to raise capital instead of taking a government financial bailout while continuing to invest in product development.

"From a dealer perspective, it was one of the best decisions Ford could have made," Mr. Snyder says. Mr. Vigil adds: "One thing people don't realize is driving customers to us is that Ford didn't take the bailout. I'm in the community and on the showroom floor every day, and they tell me they gave Ford consideration because of it." However, word about quality improvement is bringing trade-ins of other makes to Ancira Ford in Floresville, Texas, about 25 miles south of San Antonio. "Customers are interested in power and comfort," says Andy Horny, vice president and general manager, "but fuel economy is always on top." About 85 percent of his sales are trucks, and the technology developments mean a lot to his customers. "They use the truck as their office," he says. "They're in it all day."

Ford's high quality and safety ratings, Mr. Snyder says, "mean something to people. Now we're able to satisfy the customer who wants a mom-type car like the Edge that's sporty, has technology and is not a minivan."

Ford's Stable of Models
What besides Edge is flying out of showrooms? Taurus. "It's nothing like the old Taurus," Mr. Hassoun says. "The look, the feel—there's a lot of European influence in it. Alan Mulally brought back the name, and he made sure the car was done right. We get five or six a month, and they sell as quickly as we get them." Among the big attractions: a 3.5-liter 24-valve V-6 turbocharged EcoBoost engine with direct fuel injection, six-speed automatic transmission, an ergonomically designed console and optional warning, remote start, Garmin navigation and a family entertainment system.

Fiesta. "The Fiesta is really exciting, and as soon as they hit the lot, they're gone," says Mr. Griffin in Nogales, Ariz. Advertising for the 2011 model targeted bilingual and Spanish-dominant buyers because the small-car segment has the highest concentration of Hispanic buyers, according to Ford. To capture younger Hispanic buyers, the company used bilingual advertising to tout Fiesta's push-button start, overall design and SYNC, Ford's onboard communications and entertainment system developed in partnership with Microsoft. SYNC provides turn-by-turn navigation, music selection by genre, handsfree calling, audible text messages and traffic alerts, as well as reporting the vehicle's health. "I would have to say one a sensing system to prevent backing into objects, and a sensor that detects vehicles in blind spots. "Fusion is one of our top sellers," Mr. Snyder says.

Focus. "The 2012 Focus will be the new world car, produced in Europe and the United States," Mr. Hassoun says. The new model is due to showrooms in early 2011 in hatchback and sedan models. Both get a new 2.0-liter directinjected four-cylinder engine increasing the torque from the 2011 Focus. The 2012 was developed in Germany and will be built in Spain, France, Russia, China and Fort Wayne, Ind. Electric power steering will replace hydraulic steering, quietness has been improved and a boost in high-strength steel content in the body adds 25 percent more torsional stiff ness to the ride.

F-150. A spruced-up powertrain highlights 2011 in the nation's top-selling truck. "When Ford went to a four-door truck a few years ago, it really made it a family car," Mr. Griffin says. The interior features SYNC and an optional onboard computer running Microsoft Windows and work-oriented soft wear. Under the hood, buyers can get a turbocharged 3.5-liter V-6 EcoBoost engine that produces 365 horsepower—more than the 5.0-liter V-8—and has a towing capacity of 11,300 pounds, more than any other engine in the F-150 lineup. Mr. Griffin, who already sells far more trucks than cars, says the new engine may need a little explanation: "You're going to tell a normal truck guy about the V-6, and he'll look at you like you're crazy."

"Historically, Asian manufacturers stole the market," says Bennie Fowler, Ford's group vice president of global quality and new model launch. "This is our time now. We don't have to take a back seat to anyone anymore.

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