All the Trees of the Field Will Clap Their Hands

To the accompaniment of grinding metal, Driven to Write takes a decidedly Eurocentric view of Ford’s recent retrenchment on domestic saloons. 

A visual metaphor. Image credit: autoevolution

Last week’s announcement by Ford to discontinue their entire US market saloon lineup, while a shock to some, was not without some fairly broad hints being laid. In movie parlance, we’ve been hearing the ominous cellos in the background for some time, because the US market mood music on sedans has long been of a less than upbeat tempo.

The American car market has been gravitating to high riding vehicles for decades, for reasons that are as manifold as they are nuanced. Of course it’s massively simplistic to suggest that it’s entirely rooted in a romance for the iconography of America’s pioneer past, but it isn’t the wildest of generalisations to argue that in the all-conquering US pickup truck, we see the latterday equivalent of the horse drawn wagon; in the giant luxury SUV, the Brougham coach.

But looking at it in cooler, less emotive tones, the vast distances and hugely variable (and frequently extreme) climatic conditions across the US continent lend themselves more to heavy-duty vehicles than sedans. Furthermore, a three volume saloon has become an impractical device for modern life, with its inflexible interior layout, fixed capacity boot and emphasis on a narrow purpose – one which has latterly become somewhat blurred in the light of manufacturers’ desire to alter perceptions.

The European perception of the non-luxury US sedan has tended to be something of a hairshirt. Certainly, the Hollywood template appeared to suggest that so-called blue collar saloons were the preserve of those who couldn’t afford anything more indulgent; a matter which could suggest the saloon enjoyed something of an image problem well before sales fell off a cliff. Hence more recent attempts to imbue these vehicles with a more athletic demeanour, severing long-held demarcations and in its own contrary manner, perhaps accelerating the sector’s decline.

Another visual metaphor from 1986. Image credit: Hemmings

Already, rivals, FCA have pledged to abandon sedans in the US, saying the returns no longer justified the investment, further illustrating that Ford’s decision was not taken in a vacuum. Certainly, with Jeep and Ram sales (and profitability) keeping the circling wolves from Sergio Marchionne’s door, we find ourselves in the extraordinary situation where some auto-analysts believe the Blue Oval would find themselves the weaker partner in any putative tie-up.

Ford’s dilemma is rooted in a recent history of well-intended decisions which backfired. Following Jac Nasser’s appointment as CEO in 1999, Dearborn embarked on a series of diversifications which not only proved to be ill-judged, but shifted focus from the core business. Additionally, it became embroiled in a bruising and reputationally damaging lawsuit with Firestone tyres. And while all US carmakers were caught out by the post-2001 downturn, Ford was perhaps more exposed than most.

By mid-decade, chickens were coming home in droves. Nasser had been ousted, and with Bill Ford and Sir Nick Scheele in the respective hot seats ‘The Way Forward’ was pieced together which would be taken up with gusto by incoming CEO, Alan Mullay. This would divest the business of the entire PAG group, joint ventures with the likes of Mazda, its Hertz rental business, the closure of innumerable car plants and the axing of unprofitable car lines.

It’s clear that Ford’s problems got the better of them by the mid-2000s and deep cuts needed to be made to stabilise the business. But not only does the sale of the PAG division appear ill-judged in light of the latterday success of JLR and Volvo, but the subsequent neglect of Lincoln is seeing the Blue Oval in frantic catch up mode as they struggle to plug a gaping hole at the upper reaches of their lineup.

In the immediate post-2008 crash environment, Alan Mulally was hailed as a visionary. He doesn’t look nearly as clever now. But it’s not as simple as that – it never quite is. The cash drain of PAG could well have sunk Ford entirely during the dark days following the post-2008 realignment. Furthermore, both JLR and Volvo have thrived under new management with a very different ethos, not to mention a far more nimble management style. It’s quite uncertain whether Ford was the ideal custodian.

As oil prices shot up earlier this decade and US customers bailed out of fuel guzzling SUVs, Ford (like everyone else) shifted emphasis to more compact offerings (many, repurposed European models), a strategy which paid dividends for a time. But with the subsequent collapse of oil prices, the market reverted to crossovers, SUVs and trucks, catching the Blue Oval on the hop once more. While GM and to an extent, Jeep / Ram had a stronger base in these sectors, Henry has been slower to capitalise.

And yet another from 1960, (with gratuitous Ballerina). Image credit: Read Mullen Motor Co via way of our fathers

The irony of course is that as Ford announce the end of their saloon lines – a statement so vague it could mean just about anything – they have restated their commitment to Lincoln, with plans afoot it seems to create a stand-alone RWD platform at long last, in addition to reinstating the Continental’s signature coach doors. A decision which can only have East Asian ambitions at its root.

How all this is likely to play out is really anyone’s guess. Currently there are significant numbers of Ford owners who do not wish to purchase (or lease) a crossover or similar vehicle and appear unlikely to find a quantum of solace within their friendly Ford dealer come trade-in time. What can the blue oval offer them? A raised up version of what they have been driving? Some form of saloon / crossover hybrid, a la AMC Eagle?

Successful car businesses make long-term plans, yet all are prey to events. Certainly under the current US administration, the proposed easing of CAFE fuel economy regulations will favour US carmakers, but as European and Asian carmakers shift decisively towards hybrids and EVs, are Ford and their compatriots likely to be caught with the wrong offerings when the next economic downturn swings round?

The salient question now occupying the minds of observers and analysts is whether Ford are making an astute move by abandoning mass market saloons or are simply making another one which merely appeared astute at the time. Nobody can be sure. The question is, can Ford?

Author: Eóin Doyle

Co-Founder. Editor. Content Provider.

13 thoughts on “All the Trees of the Field Will Clap Their Hands”

  1. This decision by Ford is astute for Ford and its short term profitability and there lies the nub of the problem; lack of investment and short-termism by US based corporations.
    The saloon car market in the USA is shrinking but it’s still significant, significant enough for Toyota, Honda, Kia, Nissan, Mazda and Hyundai to continue offering up to date and reliable models in this segment and hence dominate it. Ford, like FCA and GM have adopted a policy of defeat and are on a massive campaign of shrinkage which will result in their sudden demise. And of course, nobody has even mentioned the Chinese manufacturers; they might be the butt of jokes now but they are rapidly improving and investing while FCA for example occasionally push out yet another underwhelming product based on the Punto platform.
    P.s. thank goodness Volvo are no longer owned by Ford; they would never have been given the creative freedom, investment and long term plan they currently have thanks to that funny little Chinese company that owns them.

    1. Twenty five years ago Ford ceded the Granada/Scorpio and seem to be calling an end for the Mondeo class. BMW and VW are aiming to take the Focus class as well. Is Ford giving up that next?
      You’d think Ford could find a way to make cars people want in these classes. Other companies can. Look where yielding market sectors led Citroen: from a full range of cars to a stunted mix of hatchbacks in the lower price class.

    2. It’s not the hatchbacks that bother me – from 1989 to 2003, Citroën only sold hatchbacks. But a hatchback is not a hatchback. A liftback or estate is more of a saloon variation and can still have elegant lines and good proportions. The crossovers and SUVs we have today are a different bunch, emphasizing the vertical lines and a massive appearance. As for the C-segment and below (where Citroën today is mainly focused), a hatchback is the natural bodystyle anyway.

    3. Mark: I had hoped the reference to China was implied in the blanket term ‘Asian carmakers’. China is no laughing matter – they are deadly serious about EVs and they will have the US carmaker’s lunch if they do not come to their senses – or the government simply imposes massive tariffs upon them, as they appear to be threatening to do.

      Agreed as regards Volvo. They appeared stifled under the Blue Oval. I would suggest JLR (particularly at the LR / RR end of the product offer) have also benefited markedly from a hands-off style of management from India. Dr. Speth also seems to know his onions, even if his judgement has not always been infallible. But of the two, my money would be on Gothenburg.

  2. I wonder if the dramatic shift in the market has something to do with the decline of the middle class. The average sedan is certainly a symbol of average people. Nowadays, that average American is working 2 jobs and can barely pay for his/her healthcare. I suspect these people started buying second-hand cars. Working class people who are a bit better of, probably get an SUV because that is the trend. And the roads are not getting better…

  3. Another factor worth considering is the contemporary obsession with shareholder value and growth driving this short-termist business model right across the large-scale motor producers. Where once manufacturers were (broadly) content to maintain their position in the market, they have entered a reductive spiral of endless niche filling and attempts to gain market share and dominance.

    It isn’t good for business sustainability in the long-run and it isn’t good for customers either, who are simply presented with a bewildering illusion of choice. But it looks great on the year-end report.

  4. “But looking at it in cooler, less emotive tones, the vast distances and hugely variable (and frequently extreme) climatic conditions across the US continent lend themselves more to heavy-duty vehicles than sedans.”

    Interesting if true. Its been several years since I’ve done a cross-country drive but I have flown across the country and rented cars on arrival. I’m not sure that unitedstatesians drive vast distances. I didn’t see many vehicles from distant states when I was away from home and the ones I saw were cars, not truckish monstrosities. I live near Interstate 95, the east coast’s major north-south highway, and drive it and I-295, which bypasses Philadelphia, fairly often. The travel season is here so I see a fair number of personal vehicles from far away. They’re mainly sedans.

    Although the manufacturers push very expensive pickup trucks with all of the amenities most of the pickups I see are low-end ones piled high with incentives.

    As for weather and all that, a trunk that keeps the weather out seems preferable to an open truck bed.

    1. Fred: I wouldn’t for a moment doubt your immeasurably better insight and yet it would appear, US vehicles do (in European terms at least) huge mileages. Perhaps people’s commutes are longer and even if they are not taken out of the state of registration, the states themselves are often pretty vast.

      It’s interesting you say you see a predominance of saloons. I’ve often wondered, when manufacturers say, “we’re simply reacting to customer demand” they are in fact actively fuelling that demand by sheer force of numbers and heavy-duty marketing. It’s often said that the public gets what the public wants (apologies to Paul Weller), but what is more often the case is that they get what they’re given.

      As an aside, I like that image of a pickup with its flatbed piled high with incentives. A nice metaphor for the state of play, I might suggest?

  5. Eóin,

    You’re right, some US states are enormous. Texas, for example. If I recall correctly the easternmost milepost on Interstate 10 is 880. That’s miles, not kilometers. Texas is severely infested with pickup trucks, which Texans use as more sensible people use cars (sedans).

    I live in what I’m told is a relatively well-to-do suburb. Around here I see many more sedans than pickups. But then Mercedes, BMW, Lexus, Infiniti and even (dare I name them?) Lincoln and Cadillac don’t sell pickups. Nor does VW in its three unitedstatesian incarnations, Audi, Porsche and VW. Our local po’ folks tend not to drive any of these makes, do drive pickups.

    As I’ve said before, I see pickup trucks, working vehicles excepted, and high station wagons, many with four wheel drive, as manifestations of insecurity. I understand there’s a lot of that going around.

    Side comment re four/all wheel drive. We get little snow and ice but many local BMWs and Mercedes have all wheel drive. Makes no sense at all, but there they are.

  6. “But with the subsequent collapse of oil prices, the market reverted to crossovers, SUVs and trucks, catching the Blue Oval on the hop once more.”

    Revert? Really, how so? The Escape, Edge and Explorer crossovers sold and sell very well. And the F150 has been top-selling pickup for decades. C-Maxes never made a dent, nor did Fiesta and the word got around on the disastrous Powershift DCT, so Focus started out strong then underwent a steady decline. The Fusion/Mondeo sold well to begin with but has also steadily declined, right through the oil price bottoming of 2014.

    I just checked annual sales of all these models and see only the decline of “real” car sales in the numbers. But that is also a general trend for all manufacturers.

    I really don’t believe that “customers bailed out of gas-guzzling SUVs earlier this decade” when oil went to $100 a barrel. The sales figures do not support this contention at all. I don’t want to be overly argumentive, I just think you have missed the point entirely as to why Ford is dropping saloons/sedans.

    Once Mullaly departed, other factors coalesced almost at once. EVs and autonomous driving became the big buzz words. In the three years since, Wall Street has decided fuddy-duddy old mechanical manufacturing companies are not cool. Tesla is. Ford gave the distinct impression it wasn’t at the leading edge of this “revolution” and its stock price declined. Not sexy enough. Oh sure, sensing this, Ford has waved its hands about talking the digital mobility game, but it has fallen on deaf ears. Big bold moves such as deleting sedans make the stock market pundits sit up and take notice. Maybe Ford isn’t stodgy after all goes the supposed reasoning. Dumping well over 300,000 sales per year makes no sense in a rational world, but when Tesla has a huge valuation based on being $10 billion in debt but appearing “sexy” to the folks who want stock price increases next week, Ford gets dunned. So it’s off to slashed budgets, delete cars from the range, all to appease the gormless twits who issue unresearched buy/sell recommendations to an equally uneducated institutional investor class. But as commenters on TTAC have pointed out, a 5.4% dividend for the small investor is better than any bank interest rate, and Ford is hardly bankrupt – over a million annual F150 sales (including Canada) shore up the ship.

    Where Ford is suffering bad sales declines is in China. That’s worrying. They are on their third chief there in 6 months. Easily searched. But Ford isn’t in big worldwide sales trouble like Hyundai, with hedge fund artiste Elliott trying to chivvy them along to boost stock prices.

    In a general way, Ford has always been slow in North America to update its car models. Since the Accord and Camry present when the Fusion came out, those other two have dumped their 2012 models, gone through an entire generation of replacements and introduced the next new ones last year. So there’s that. Consumer Reports duns the reliability of Fiestas and Foci, and their readers tend to be the “educated” consumers likely to buy cars for green reasons. Ford isn’t too competitive in cars, they don’t impress the stock market, and China is a mess. The few cars Lincoln makes are a pimple on the sales charts, as are Cadillacs. The MKZ Fusion redo will die with its sire, and the Continental will continue on in the same limited production quantities to (hopefully) amortize design and tooling costs. Then it’ll be the axe no matter what brave/misdirection cues Lincoln management is giving out. Their new crossovers appear very nice (I reserve the term SUV for BOF monsters).

    Every day, I go to this website to get industry news from around the world:
    Helps to dispel fog.

    1. Thanks for that – much interesting information but the icing on the cake is the verb “dun”. Coming across a rare word is as fun as finding a rare plant. The other day we had the word apotheosis appear. It has been a good week, lexicographically speaking.

  7. I don’t understand why Ford would continue to sell cars in the EU, to be honest.

    Ford sells about 500K Focus, Fiesta, and Fusion (Mondeo) cars in the US. Ford sells about 600K anually of the Focus, Fiesta, and Mondeo, in all of the EU, but the trend is towards the lower-profit and smaller Fiesta and Focus. How on earth does this make any sense?

    This is a very short sided move by Ford. Now this means, the cheapest car they’ll sell will be the EcoSport (which is terrible) and the Ecosport 1.0L has a 10MPG differential between it and an automatic 1.0L Focus.

    Not to mention, Canada buys smaller cars in general, and this basically concedes the car market entirely (Canada won’t get the Focus Active)

    Shame. Ford has made some nippy small cars.

  8. As another American, I have to echo some of Fred’s comments; the author’s third paragraph gives us way too much credit for making potentially rational car-buying decisions. That’s the great irony in this whole situation–Ford feels compelled to discontinue all their sedans (and cede hundreds of thousands of formerly-loyal customers to the competition) in response to perceived demand–demand which is almost entirely a product of several decades Big Three marketing efforts to make truck-like cars fashionable and all other cars unfashionable. (That’s a gross oversimplification on my part, but probably the most succinct way to summarize the current state of consumer demand in the USA car market.)

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