Why Ford looked outside for help

PlanoA4 submitted on 08/03/2006 Official AutoSpies Timestamp: 9:37 AM
from: www.detnews.com

Tags: Ford

Ford

Why Ford looked outside for help

Ford Motor Co. hired a former Goldman Sachs executive, Kenneth Leet, to study the company's operations and advise Chairman and CEO Bill Ford Jr. on possible steps to improve performance, including selling assets and forming partnerships with other automakers. Some questions and answers about the move:

Q .Why is Ford doing this now?

A .Two reasons. The Dearborn automaker is under pressure to do something after its extremely disappointing second-quarter performance. Ford reported a $123 million loss last week -- and revised that on Wednesday to a wider, $246 million quarterly loss.

Ford's "Way Forward" recovery effort is widely viewed as trailing crosstown rival General Motors Corp.'s turnaround, which appears to be gaining traction.

In addition, GM is studying a three-way alliance with France's Renault SA and Nissan Motor Co. of Japan. That could potentially create a behemoth with a 24 percent global market share, dwarfing Ford.

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MercBasher - 8/3/2006 10:44:45 AM

+1 Boost

Pity Toyota doesn't use a month of cashflow and buy a controlling interest in Ford then it could:
a.) overnight become a major player in trucks in the US
b.) eliminate all Ford cars in the US except the Fusion and Mustang
c.) eliminate investment in the majority of Ford's new product development portfolio
d.) sell off some of Ford's plants to Nissan - so that Nissan doesn't need an alliance with GM
e.) Get Bill Ford's mug out of the limelight

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ZORADUNTOV - 8/3/2006 11:32:34 AM

+1 Boost

...MercBasher is right on the money...

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courtstone - 8/3/2006 11:39:33 AM

+1 Boost

But Toyota is already in the position they want to be in, they are making ground QUICKLY! Aquiring Ford now would be like how MB took on Chrysler...they are not gaining much of anything right now. What did the DaimlerChrysler merge do for MB?

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woood - 8/4/2006 11:14:07 PM

+1 Boost

I agree with courtstone partially, and I think Ford has to rethink their position in the industry and their business practices and revolve around the line, "Ford, a worldclass American Company who is the #2 Carmaker in the world. Sales race now would just mean giving huge discounts to sell current inventory. I think a little of back to basics is a good strategy.

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