October 5^th, 2004

Between Bouts of Honesty, Ford Hedges its Bets for '05

One hybrid, one (maybe two?) throwback(s); one crossover, one traditional sedan, and one holdout to retain fleet share

2005 Ford Escape Hybrid

One hybrid... Ford's '05 Escape makes Ford one of just two companies building full hybrids, and currently the only one with a hybrid SUV

2003 Ford Mustang Concept 2005 Ford Mustang 2004 Ford Shelby Cobra Concept (now defunct)

One (maybe two?) all-new throwback (s)... Ford's Mustang snorts and looks like it was 1965. There's also the Shelby GR-1 Concept, replacing the earlier Shelby Cobra Concept in Design Head J Mays' power trilogy. Like the Cobra, the GR-1 is GT-based, giving it a good chance of being built

Ford Five Hundred

One crossover and one traditional sedan... for the 2005 model year come the FWD/ AWD, P2-based Ford Five Hundred and Freestyle. Ford wanted both a new sedan, and a car-based SUV (in addition to the Escape) which leant more to the emerging crossover market. Taurus wagon - effectively replaced by Freestyle - will be dropped. Both Ford's car sales and its resale values should get a boost from this new pair. Ford hopes to move about 125,000 Five Hundreds per year

... and one holdout to retain market share. '00 Taurus goes on. The Chicago assembly plant will build the Five Hundred, Montego, and Freestyle, while the Atlanta plant continues with the Taurus. Ford is cagey about calling the Five Hundred a Taurus replacement, but they're not being too honest here. The truth is that Ford hopes the Five Hundred will give Americans more of the space they want until the smaller Fusion comes along next year. Meanwhile, Taurus will soon exist largely for fleet sales which would otherwise hurt the Five Hundred's status. Many analysts and shareholders might breathe a sigh of relief at the new strategy, but they're not being honest, either. There could have been a very different end to this story (see article: 'Farewell to the Taurus').

Still building America's best-selling vehicle... and last year's new F-150 is joined by a new '05 F-Series Super Duty, boasting a towing capacity of 17,000 lbs.

The long shadow of the straightforward, often brutally honest Henry Ford still appears over Dearborn, as if to remind the company both of its place in life, and that there is glory in that mandate.

Ford and honest transportation were once synonymous, a universally-praised relationship before Henry uncharacteristically lost the plot, developed a fixation on his Model T, and refused to change it - even in the face of Alfred Sloan's rapidly-developing design studios (courtesy of the famed Harley Earl).

As Ford - the last of the Big Three to build concepts - became drawn into the world of ever more outlandish dream cars and extravagant yearly design changes, Toyota studied its production lines and gradually built similarly mainstream cars with better quality, and yet more of the options that the mainstream market wanted.

The first gas crisis hit in 1973, and the second in 1979. You know the rest of the story.

Ford and racing were also once synonymous.

Few road cars have exemplified the desire to go as fast as possible, and damn the practical considerations, as did the original AC Cobra. Nearly forty years ago, one Carroll Shelby persuaded Ford to drop a 427 V8 into the British AC Ace, creating a legend that, as Jason Barlow wrote for Top Gear, March 2004, has "mythic status (which) seems to gather momentum with each passing year."

Recently, however, Ford has found itself investing billions in others' brands. It is decidedly not present on the other end of the Atlantic, then, quite in the way Shelby had intended.

• Ford has forced its once-innovative Taurus to commit hara-kiri even while Ford affiliate Mazda fields the most dynamically enthusiastic car currently in the Camcord segment;
   

• donated a Lincoln platform for the Jaguar S-Type, only to remove Lincoln from Jaguar status (see article: 'Lincoln Languishes as PAG Plunders'),
   

• and plugged Volvo without a thought as to Mercury.

The class-leading flag at Ford is currently flown only by the Focus (whose U.S. version will inexplicably not be replaced by the second-generation due now in Europe), and by the F-150 - a truck.

Retrospection is in order, and 2005 will see Ford attempting a return to its roots. Indeed, there is a certain honesty at  Ford of late, perhaps fitting of its working-class beginnings. It is supported visually by Design Head J Mays' favoring of simpler themes in his designs, and of throwback, Living Legend cars that hark back to simpler times.

Mind you, one has to be careful about describing Ford as honest. Most seriously, there are currently rumblings about the closure of the Wixom plant in Michigan for political reasons. We'll return to this later. More humorously, the company last year lied about its towing capacity in order to secure a lead over Nissan's much-ballyhooed Titan (as we described, somewhat tongue-in-cheek, in Bear in Review 2003/4!)

Speaking of which, Ford of course continues to utterly dominate the full-size pickup segment. The F-150 has gone from strength to strength, September having been the thirteenth month of year-on-year improvement for America's best-selling vehicle.

Yet Ford has chosen to launch a new F-Series Super Duty despite the excellent performance of the previous model. Ford's Senior Sales Analyst George Pipas told us recently that it was "the mark of a leader" to continue to innovate.

Well done, guys. Certainly, F-150 is best-in-class, if not quite our type of vehicle.

Growingly, it is hardly the type of vehicle that the progressives (opinion leaders, in industry-speak) aspire to, either. Despite a stellar performance by the F-150, Ford sales in September were down 4% for the month, which tended to follow year-to-date performance. More to the point, market share has dropped from 20.5% at this time last year, to 19% in September '04.

In the wake of the Firestone debacle, and of CEO Bill Ford's public and renewed commitment to both his company's core business and to its impact on the environment, Ford has had to re-evaluate its contribution to a market that its genially simple badge has always purported to serve: the mainstream. Honest transportation.

F-150 may be America's best-selling vehicle for twenty-five years running, but Ford knows full well that this is a double-edged sword. As The Detroit News put it recently, "there’s the comparatively poor fuel economy of Ford’s U.S. fleet, a favorite target of environmental activists who can’t be bothered with most industry nuance.

"To wit, a company that produces some 900,000 full-size pickups every year and hundreds of thousands of SUVs will have lower fleet fuel economy than a foreign automaker ramping up truck and SUV production." ('Bill Ford: Time to sell more cars,' The Detroit News, September 29^th, 2004).

In the face of somewhat misguided (but vocal) opposition to its best-sellers, then, Ford has been re-evaluating its place in life. It helps, of course, that the Japanese have finally caught-on to the SUV craze. They missed the minivan movement in the '80s, and the truck trend in the '90s, but their first large pickup trucks and mammoth SUVs are starting to appear.

Why would it surprise anyone, therefore, that the company whose Ford Explorer - together with Jeep's evergreen Cherokee - sparked the Sport Utility Vehicle craze fifteen years ago now translates those simple, rugged cues to a new car-based crossover, named Freestyle? The traditional American sport utility vehicle, as Ford sees it, may be changing - and Ford will be the first American company to capitalize... hedging its bets, of course, against the Explorer and Escape.

The Escape provides two further hedging attempts of its own: Mercury's Mariner, and the much-ballyhooed Escape Hybrid.

The Mercury Mariner, an Escape clone that looks surprisingly fresh, has been launched and gives Lincoln/ Mercury dealers an entry-level SUV. Mercury may be in a state of limbo, but the dealer organizational structure keeps it alive as a viable alternative for customers sticker-shocked by Lincoln's price tags; Mariner finally acknowledges this. Mariner will get its own hybrid version in 2006. Expect to see a Mercury version of the Freestyle Crossover, too - likely to be shown at next January's 2005 North American International Auto Show in Detroit.

Escape is convinced that hybrids will remain the territory of the true believers unless they can be brought to cars that the mainstream wants to drive. So Ford is hedging its bets: the Escape is the hybrid, not the Focus. Not for Ford the enclosed trappings of Toyota's Prius and Honda's Civic Hybrid; the Escape purports to offer better gas mileage (36mph city, 31mpg hwy) while requiring virtually no compromises of the driver - save for $3,000 over the 4x2 model, and another $1,000 for the 4x4.

One can almost picture old Henry - appearing much like Buick's Harley Earl - in the background of an Escape commercial talking about building what the people want to drive.

Ford and Toyota are currently the only two companies in the world that make full hybrids. Undeniably, Ford has beat the Toyota/ Lexus hybrid SUV duo to the punch with a vehicle that can be bought now.

Speaking of Toyota, and of honesty, it is high time that the media acknowledge that mistakes were made in their initial reporting of Ford's hybrid efforts. "All the technology and the systems in the Escape hybrid were designed and developed by Ford. Full stop," Mary Ann Wright, Director of Ford Sustainable Mobility Technologies & Hybrid Programs, told Autoline Detroit's John McElroy.

"It's true that Toyota came to us several years ago and offered us 350 of their patents," she continued.

"Our patent attorneys and my engineers went through it and at the end of the day we  said that there's 21 of these patents that are close enough to what we're doing that we'll agree to license them so that there are no questions or accusations."

Toyota has recently confirmed this side of the story - not before "they left us hanging for a while," noted Wright, not without bristling a little (Autoline Detroit, August 29^th, 2004).

About the furthest thing from the technology and peripheral responsibility of the Escape Hybrid is the all-new 2005 Mustang, yet the famous icon will sit alongside it in Ford showrooms.

Every trade has its heroes - its icons - but few are as reverent toward theirs as is the automotive industry. The romance wrapped-up in the notion of personal mobility is one reason, and the variety of cultures, brands, and egos that make up its products - and that attempt to win hearts and minds over to their way of thinking - is another...

... but no one element is perhaps as responsible for the idolatry granted to this industry's luminaries as the desire to race.

Some leagues improve the breed more than others, which have often been too far removed to do so. The slack has simply been taken up by PR departments. Once in a while, though, there comes a car which needs no slack; simultaneously both medium and message, and an embodiment of Marshall McLuhan's theory (revered in many circles of media study) that "the medium is the message."

Ford hopes the new Mustang and upcoming Shelby GR-1 - after the GT, the remaining two pieces of what J Mays has called his power trilogy - fall into this category.

A man whose name is synonymous with racing across the United States, Shelby - like his product counterpart Bob Lutz - has worked with all three of the Detroit manufacturers. Both Shelby and Lutz are known for their passion for automobiles; both have been responsible for exploits which have only grown more stunning with passing years, and neither could be accused of not speaking their mind. When their paths crossed in 1987, we got the tumultuous hissing tantrum known as the Dodge Viper, an embodiment of traditional, American, good ol' boy horsepower in a body that gave Dodge's horns a potency most brand managers can only dream of. Lutz owns one, along with a Cobra replica. That alone speaks volumes about why the Cobra needed to be resurrected.

From the Viper team, Chris Theodore has gone on to become head of Ford's Advanced Product Creation center. In January 2003, the task of designing a resurrected Cobra was given to Richard Hutting, whose models were brought to life with Ford GT parts and massaged by Shelby.

For Shelby, the short development time - which undercuts the Ford GT's 15 months by two thirds - was ideal. "It took five or six weeks to engineer it, another five or six to build it," muses Theodore. "We drove the bare chassis soon after. It was like a 600bhp go-kart."

"We had a ball. Carroll still likes his donuts. You should see him go" (Top Gear, March 2004).

In the charmingly optimistic manner reminiscent of Ferrari, Ford estimated a 267mph top speed, which of course will drop when aerodynamic considerations have been factored. The 6.4-liter V10 puts out 604bhp @ 6,750rpm, 501lb-ft @ 5,500rpm, and was said to propel the aluminum spaceframe from 0-60mph in under 4 seconds.

Shown at Detroit 2004, the Shelby Cobra Concept was too rakish for the many who remembered how the original's arches softly enveloped its wheels. Undeterred, Ford recently showed the Shelby GR-1 Concept - this one, mechanically much the same as the Cobra Concept, will probably be built.

Not as quickly as the still-more-iconic Mustang, however, which begins Job One as we write this. We first saw the new 'Stang at Detroit 2003. J Mays' Mustang Concept had it all: heritage, aggression, and - by and large - the popular vote to see Ford put it into production.

That front fascia had so much character: the simple, round lights couched in organic frames; that evocative grille, and the lines across the fog lamps which began a styling theme carried throughout the car (see the line across the door down the flanks, and the cut in the taillights).

The aggressive, inward-sloping front fascia was (and is) a distinctive touch. It was last seen on older BMWs and Yugos, we think, and we don't mean that in a bad way - today, it comes across as an aggressive, if aerodynamically questionable, styling quirk in a sea of blobular imitators.

The jewel-like taillights were evocative, and perfect on red concept convertible displayed at the show.

The critics argued that, in terms of design, it did not advance the breed, and relied too heavily on past cues. Damn the critics. We, for one, think it is almost fitting that what will undoubtedly be the most capable Mustang yet returns visually to its roots - one might almost perceive that the Mustang, forty years on, is repeating its glorious history but with more sophistication than was possible in 1965.

Consider it a rebirth, if you will. So the Mustang will be launched in November, looking much as it did in 1965, and likely making Lee Iacocca (who has yet to remark on the car, as far as we know) proud.

The resemblance does not stop there; as in '65, there is reason to want the base models again. The base V6 'Stang is much less of an embarrassment than the old 3.8-liter model was, Ford having finally admitted that all too many will opt for the V6 convertible (when it inevitably appears next year) over a V8 GT Coupé.

Ford Design Head J Mays retains an obsession with simple shapes: fixed-radii circles and waterlines parallel to the ground, a taste we suspect he honed on the Audi TT and VW New Beetle. Some might suggest it has been taken too far, what with the almost Germanic, minor differentiation between the GT and base Mustang, and the peripherally low-effort flanks of the new car.

We're not enamored of the spoiler; it looks tacked-on (because it is), and the concept did it much better.

That said, there is an undeniable honesty to the Mustang - and, indeed, to the new  Five Hundred sedan, which is similarly simple in form and detailing. It is a pity that the two are not related, as they would have been at the Mustang's launch forty years ago.

Even as the new pony looks and snorts much like the first one did, its chassis comes to you courtesy not of the Ford mainstream chassis that once underpinned such cars, but of the DEW98 platform used by the upmarket Lincoln LS and Jaguar S-Type.

Perhaps the simple fact that Ford would hardly again put a Mustang on the chassis of one of its mainstreamers today illustrates how difficult a time those mainstreamers have had since the Mustang first appeared.

Mind you, Ford once tried to replace the Mustang with the front-wheel-drive Probe. Suffice to say that purists threatened to burn the very building where the decision was conceived.

Ford is taking another crack at the mainstreamer market, this time with both front-wheel-drive and all-wheel-drive.

Traditional American sedans have power, presence, and space. Five Hundred manages about half of those qualifications - indeed, driving it, one might wish for a little of the Mustang's muscle. The 203bhp Duratec is a familiar unit, and for the first time gets a 6-speed transmission to work with - along with a CVT. Both are geared for fuel economy rather than power, and 30mpg on the highway is a real possibility with a light foot. Ford calls it a "smart powertrain combination" because of the fuel economy gain; we say it's a convenient way of avoiding the horsepower race until an upcoming engine and transmission family is ready. Five Hundred's automatic is currently sourced from Japanese supplier Aisin-Warner, which is likely a hard pill to swallow for what purports to be a traditional American sedan. American automatic 'boxes have long been best-in-class.

We would not have minded a little of the Mustang's presence, either. Much like with the Chrysler 300 (see article: 'Hunfight at the OK Corral'), we see a very rigid, German interpretation of the large American sedan here - albeit without the interest of the 300's brash detailing. Nonetheless, it is clean and ultimately more homogenous than the Japanese competition. Things fit, unlike with, say, Nissan's Maxima (which also takes the Passat's roof, but mates it to one of the most disjointed bodies ever conceived - see article: 'What were they thinking?')

Mercury Montego's additional dress-up over this basic honesty thus gives it a certain mass-market cachet, hardly the stuff of brand-building dreams - but until someone comes up with a better way to manage the brand, a dressed-up-Ford is what Mercury is.

That aside, this car has two cards to play: a chassis that is more capable than expected, and more space than anything in its class.

We get optional 18-inch Pirelli tires - and we like the way the car handles on them. A touch on the heavy side for its power, certainly, but surefooted and predictable with even some throttle-steerability toward the limit. The ride remains pleasant, and the car feels more neutral than it first appears it might be.

There's an all-wheel-drive model, too, offering a layout still relatively new to the mainstream segment. This one is a Haldex-clutch system straight from Volvo, easily-integrated into what it is a Volvo P2 platform (as used in the S80 and XC90).

Five Hundred is 3 inches longer than a Taurus, and a foot shorter than a Crown Victoria. As you might imagine, the Crown Victoria's packaging has been substantially improved upon. The Five Hundred actually treats its rear passengers better, and offers a 21 cubic foot trunk to boot. Even the passenger seat folds flat - a unique touch in this segment. Up front, seating is four inches higher than a typical sedan's, and so Ford will be playing on what it refers to as Command Seating.

Again, to be totally honest, others have been seating drivers higher for a while - if more in smaller cars (such as Ford's own Focus) than in the Five Hundred's class.

National advertising for the Five Hundred will start in about ten days. The keyword for the Five Hundred, Freestyle, and Montego is low volume. Well, lower volume. Ford's fleet mix has declined from 18% in July to 16.9% in September, so you see where the strategy is going. The idea, of course, is to produce higher residuals and thus better lease deals. Automotive Lease Guide has already estimated the Five Hundred's resale value as 48% after three years, and 50% for the Freestyle.

These figures, which banks will use to finance your new Ford, compare extremely favorably with the Taurus' paltry 30%, and are just a few points lower than the Accord's 52%.

We promised you a look at the potential Wixom plant closing, and the movement of its Lincoln LS and Town Car lines to Atlanta. None have made more insightful comments than Autoline Detroit's John McElroy.

Thus we close with a political hedge.

"Automakers need to hold on to as much political clout as possible... any time an automaker has a plant in a state, it can usually count on the support of two senators, at least one congressman, and a governor," suggested McElroy recently.

With Michigan support generally reliable, Ford may well feel it can afford to move south and shore-up a base there.

To which we must suggest that Toyota (that name seems to come up awfully frequently) has quietly been building its own base in Michigan. Ford would be well-advised to place its political bets as carefully as it has its products'.