Five Possible Pitfalls for Ford Reported on Edmunds' AutoObserver.com by Pulitzer Prize Winner
SANTA MONICA, Calif. — April 29, 2010 — Ford is in a good position within the auto industry but Paul Ingrassia, Pulitzer Prize-winning writer identifies five possible pitfalls that could cause Ford to stumble. Ingrassia is the newest contributor to Edmunds.com, the premier online resource for automotive information.
"History shows, after all, that when automobile manufacturers are at the peak of prosperity, they also can be surprisingly vulnerable," wrote Ingrassia in his report at AutoObserver.com. "It would be foolish to predict that things will start unraveling in Dearborn, because the company is doing a lot of things right. But the car business can be volatile, and Ford faces some significant challenges despite its recent success."
Here are five issues with which the company must grapple in the months and years ahead:
Hubris. Success often leads to arrogance and failure. Recent barbs directed at General Motors indicate that Ford executives remain preoccupied with its domestic competitors as opposed to Hyundai, Honda and Toyota.
Labor. Last November, Ford workers rejected contract amendments that President Barack Obama's auto task force insisted the union accept at Chrysler and GM in return for federal bailout dollars. As a result, Ford suffers an operational disadvantage, not just versus Chrysler and GM, but more importantly against the Japanese, German and Korean transplant factories that are not unionized.
Lincoln. The luxury marque is the weak link in Ford's product strategy, trailing Cadillac in sales by 30 percent and lagging even further behind Lexus, BMW and Mercedes-Benz. The brand's relatively new nomenclature is confusing, its styling can be bizarre and its competition is intense.
Debt. The company has $31 billion in debt, nearly twice as much debt as GM had at year-end, thanks to its government-funded bankruptcy. Ford has been able to sell new stock and use the proceeds to pay down debt, but the debt burden will remain a drag for some time.
Succession. Alan Mulally, the CEO who has crafted Ford's comeback, turns 65 on August 4. Mulally says he has "no plans" to leave Ford, and rumors that he will return to Boeing are almost certainly just that. The bet here is that Mulally will stay at Ford two or three more years, cementing the turnaround and his place in American corporate history, and providing additional time to groom potential successors.
Ingrassia's article on Edmunds' AutoObserver.com titled Ford: Now That It's Going Right — What Could Go Wrong is available at http://www.autoobserver.com/2010/04/ford-now-that-its-going-right---what-could-go-wrong.html.
About Edmunds Inc. (http://www.edmunds.com/about/)
Edmunds Inc. publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Its most popular feature, the Edmunds.com True Market Value®, is relied upon by millions of people seeking current transaction prices for new and used vehicles. Edmunds.com was named "Best Car Research Site" by Forbes ASAP, has been selected by consumers as the "Most Useful Web Site" according to every J.D. Power and Associates New Autoshopper.com Study(SM), was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated "#1" in Keynote's study of third-party automotive Web sites. Inside Line launched in 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in 2006 and is an automotive social networking Web site. AutoObserver.com launched in 2007 and provides insightful automotive industry commentary and analysis. Edmunds Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.