Thursday, September 29, 2005

Ford down but not out

On my personal blog I mentioned that Honda and Toyota stocks have been going up recently. On the other hand Ford stock has not faired so well. Today Ford was down, and thats with major cost cutting announcements.
Ford is cutting jobs in North America after its auto business in the region posted losses in three of the past four quarters. Bill Ford's new plan will mark his second restructuring effort in less than four year for the Dearborn, Michigan-based automaker. Ford Motor's shares have declined 33 percent this year, and its net income fell 31 percent in the first half.

While cost cutting will help, cutting costs alone will not get them back to being the worlds second largest car company (a title they recently lost to Toyota). They need to sell cars in America that Americans want to buy, and right now Americans seem to want to buy Toyotas.

Ford does have the problem of not wanting to alienate the customers that are happy with the typical American Ford car. So in two previous posts to this blog ( one & two ), I have given my idea for planting the seeds of a turn around. Ford either needs to move the Mercury brand into a position slightly upscale of Mazda with sportier and more stylish cars. Or create a new brand, like Honda did with Acura, to appeal to a different market segment.
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