Whatever Happened to Ford Motor Company?
Henry Ford published this purpose statement in 1907:
“I will build a motor car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one-and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.”
So what happened? If you remember the Edsel, which premiered in 1957, you’ll remember it did not survive. Today you can only find Edsels in collector car shows.
Two things happened to the “Big Three” U.S. car companies:
1. They forgot. They forgot the late 70s, early 80s, when big cars were going to the junk heap in favor of smaller more fuel-efficient foreign cars. As the big three scrambled to re-tool, their markets got sucked away by Toyota and others. After a few years, they started making mini-vans, then SUVs, both of which were gas guzzlers. When the gas prices topped $4 in 2007 and early 2008, they lost market share.
2. They got too big. Big companies, like big ships, can’t turn quickly. It takes them a long time to make course corrections.
3. They gave in to the unions. Don’t get me wrong. I blame the unions for increasing their demands each bargaining round. The unions made it impossible for the Big Three to trim down and make changes. So they lost again to younger, non-union companies that were faster and more easily adaptable.
What is Ford Doing?
With their stock down significantly (from over $15 a share in 2004 to $1.55 recently), Ford is concentrating
on Millenials. They recently announced that they are targeting Millenial buyers with the new Ford Fiesta. Wasn’t there a Fiesta many years ago?
I guess the automakers are abandoning Baby Boomers and targeting the next generation of car buyers. Maybe the Millenials will take their hands off their text messaging while they are driving Fiestas long enough to notice”God’s great open spaces.” One can only hope.
Images source: Newscom