No sticklers for current affairs are we, (spin cycles etc…) but given that it’s my first dedicated 2018 post, I thought I’d confound expectations. Mine, as much as yours.
Earlier this week, Autocar’s reverse-cassandra, [this analogy doesn’t entirely hold water, but bear with me] spoke to Ford Motor Company CEO, Jim Hackett, obtaining assurances that the American car giant has no intention of following General Motors out of the European car market. “I have in my hand a piece of paper…”, Steve Cropley didn’t quite say.
What he did however was to quote the Ford CEO citing Uncle Henry’s “depth of history” in the region and the fact that “Europe has the second biggest GDP”. Warming to his theme, Hackett said, “We’ve made a big commitment in Europe, and it looks as if Brexit is reaching some kind of resumption”. All of which by way of illustration one assumes, of the good Mr. Hackett’s best intentions.
Mind you, that statement regarding Brexit bears unpicking. One can only assume he meant to say (or Cropley intended to Write), resolution. Which either way, given the current state of affairs both at Downing Street and Brussels, suggests either a degree of naivety on the Ford CEO’s part, that he’s rather poorly briefed, or that he knows something we don’t.
Returning to the story however, in what could be seen as something of a swipe at his GM opposite number, Hackett told Cropley that Ford “wants to be a leader”, pointing out that Europe’s early embrace of electric cars and investment in autonomous technologies makes the region more attractive to the US car maker.
Ford wants to be a leader, do they? An interesting choice of words given that if any of the mainstream car giants has shown (comparative) leadership in electric car development, it has been General Motors. Okay, perhaps not to Elon Musk levels, but some commitment is better than (seemingly) none at all. Now one can debate the relative merits of GM’s Opel sell-off last year, but it does set a pretty hefty precedent for US multinationals operating in the region.
Because if Europe remains such an attractive market to Ford, it raises questions as to why GM felt they had nothing more to offer, pulling the drawbridge up entirely? Furthermore, given its current constitution, it’s rather difficult to view any component of Ford’s European range (for all their dynamic competence) as embodying a major commitment or indeed the actions of a leader.
So for all the positive noises being made, there appears little substance to Hackett’s utterances. Saying he ‘doesn’t believe’ Ford should abandon the region is not the same as saying he won’t. And given Ford Europe’s apparently tenuous profitability and the steady encroach into its core market both from ‘low-cost’ rivals, and the so-called ‘prestige’ sector, the idea that Dearborn will invest the $billions required to develop fully electric cars for the European market doesn’t bear much scrutiny either.
One thing that is becoming increasingly apparent is that Steve Cropley’s assertions tend to result in the diametric opposite of what he predicts. It certainly isn’t beyond imagination that given sufficiently challenging business conditions (and they’re not improving), Hackett and his FoMoCo board could conceivably pull the plug within the next five years or less. Frankly, his statement this week should assure no one.
Meanwhile, at the Detroit motor show, FCA’s Sergio Marchionne, asked about rumours of Jeep being spun-off or sold told Automotive News, “We have no intention of breaking it up and giving anything to the Chinese.” Which as we all know in Marchionne-speak is likely to mean just about anything.
Jeep is of course the only reason FCA remains solvent and with the US economy booming and sale of SUV’s reaching even giddier heights than of yore, its easy to see both why a sale might be compelling and equally why he might choose to retain it. Marchionne’s main enemy of course is time, as his tenure at the helm of the creaking FCA flotilla is due to end in roughly a year’s time and he has a legacy to secure.
Back in January, the be-jumpered one told journalists that FCA as a whole is likely to meet mid-year targets to become cash-positive. Confusingly, this doesn’t actually mean they will be debt-free, simply that they would have more cash than debt. It’s always best to clarify I feel.
In a development which caught observers off-guard, he also revealed that the person who will replace Marchionne as FCA chief will be determined by a talent show to be shown exclusively on US cable channel, WKAC later this year, with the decision being put to a public vote. “It seemed to work for Trump, so we don’t see why it shouldn’t work for us” an FCA spokesperson speaking on condition of anonymity told DTW this week. Watch this space, as they used to say.*
Meanwhile, closer to home (much closer in the writer’s case), two seemingly unrelated news items this week relating to JLR plopped on my desktop. The first was Wednesday’s announcement (which elicited little reaction in the mainstream press) that JLR have elected to build a new software engineering centre devoted to advanced electrification and autonomy in the West of Ireland.
Now Ireland isn’t and never was an automotive centre of excellence, so this announcement came with a decent helping of bemusement. Brexit uncertainties I initially thought. Meanwhile, a second, again not well-covered report the same day announcing JLR’s $3 million investment into US self-driving start-up, Voyage, suggested another possible answer.
After all, having an advanced engineering centre within spitting distance of Ireland’s major transatlantic airport (Shannon, since you asked), in an area with a concentration of IT and tech businesses just might make more sense than plonking it in the middle of Warwickshire – especially now. That’s the funny thing about taking back control. Businesses take business decisions.
*I made that up.
Driven To Write 
I am not sure Ford will abandon Europe which point makes GM’s decision to give up even shipping cars to Europe all the more incredible. Ford may gradually close factories which may result in some cars being made elsewhere. And why not? I don’t say this is good new from the DTW standpoint. Ford, as a firm with a remnant of family ownership (or the ethos of such) is more willing to do what it takes to keep marketing in Europe. If Kia and Hyundai and Nissan and Toyota can, so can Ford. This only underlines the idiocy of GM’s decision: sell everything and not market any GM cars in one of the richest tracts on the planet. I still think Ford needs to rethink its strategy in Europe. Once a regionally recognised badge they are now, apart from the Fiesta, just another brand. If they keep on as they are their presence in Europe will be that of importer.
Cash-positive … can have more than one meaning. It could mean that they will be generating cash, rather than just eating it. I think the old saying about UK and US being both linked and divided by two aspects, a large amount of water and usage of the same language might be the cause. I had actually assumed that he meant that they had stopped eating cash ….
As I wrote on another article, I worry about the impact of the new Focus; I think it is going to bomb, or at least require a massive amount of marketing spend support – including dealer incentives – to make it sell. Pictures show a car that is bland in the extreme – it could be a FIAT Tipo, a previous generation Hyundai i30, or a Toyota Auris, and I think it will be trounced by everything else.
I saw those too. What was wrong with Mk1 and Mk2 Foci that required it to morph into the present and planned cars?
That’s a very good question.
It´s not working, is it? The current Focus is respected a bit but not loved or adored as it once was. People still rave about the Mk1 though and they sold masses of them.