Quantity Is Job 1?

Now it's Ford's turn to feel pain. With General Motors already laying off workers and closing plants, Ford has announced that it will cut up to 30,000 jobs and close fourteen plants in North America by 2012. William Clay Ford, the chairman and CEO of his family's business, hopes that this plan will allow Ford to gain market share and be more competitive, rather than try to align its current manufacturing capacity with shrinking demand for its cars.

Pension and health care costs - costs foreign companies like Toyota don't have to worry about so much due to generous public insurance programs in other countries - are part of the reason for Ford's "restructuring," but another reason is that Ford builds cars no one wants. The current line of passenger cars is uninspiring, bar the odd Mustang or Five Hundred sedan, and its SUV's - including the benchmark Explorer model - have taken a beating in the ten-day sales reports thanks to steadily rising gas prices. Ford's foreign operations are better off, but mainly because of a virtually different line of cars; I've seen some of the peppy, sprightly cars Ford makes and sells in Europe, for example, and wonder why we don't get cars like that here. Again, like GM (think of the Opel line), Ford has the ability to compete against the likes of Toyota in its home market but doesn't put its strength behind that effort. The question has been obvious for decades - if they can compete in Europe, why can't they compete in North America?

Meanwhile, Ford is rumored to be planning to get out of the minivan market. FoMoCo has concluded, apparently, that Chrysler and the Japanese have too much of a hold on that market segment to compete there and believes it's no longer necessary, or even feasible, for any carmaker to have a vehicle in every market segment. It might also be noted that some market segments - remember the mid-size "personal luxury" two-door coupe market dominated by the Oldsmobile Cutlass Supreme and the Chrysler Cordoba? - don't even exist any more. Other market segments that are profitable now could disappear in the future, depending on how tastes evolve.

In fact, Ford could conceivably go out of business in the next twenty years. If that idea sounds unthinkable to you, bear in mind that no one in 1947 envisioned Studebaker - then a car company considered to be on the cutting edge, particularly in styling - going out of business two decades hence. But that's pretty much what happened. :-(