Ford Motor Co. plans to terminate the cheapest models of its Jaguar sports car and is in the process of giving its newly released Five Hundred sedan a facelift, according to published reports.
The moves are the latest attempts by the nation's No. 2 auto manufacturer to reverse its financial problems. Two weeks ago the company reiterated its earlier guidance that first-quarter earnings would come in well below year-earlier results, although it would make a profit. That guidance update put it below current analysts' forecasts, which were lowered following the announcement.
Meanwhile, the Wall Street Journal reported that Ford is already looking at design changes for the Five Hundred sedan, which first hit showrooms in October. The newspaper said changes would be meant to spice up its styling and interior, which the newspaper said have been criticized as too bland.
Auto manufacturers normally wait four or five years to redesign an automobile after its introduction. The Journal reports the newly designed Five Hundred would arrive in dealer showrooms in the middle of 2007, less than three years after the debut.
But the newspaper said Ford is making the more immediate moves as it faces disappointing sales. The newspaper said its average monthly volume during the last four months would give the company an annual sales pace of about 83,000 vehicles for the Five Hundred, or about 17 percent below its 100,000 sales target.
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A few days ago, I posted a diary on the autmakers problems. They are probably going to get worse before they get better.
If this was a small company, I would be concerned. However, Ford employs 324,000 employees. As these headlines continue in the downsizing vein, these workers are going to lose their jobs.
I think an adequate comparison of Ford's current situation is the steel industry in the 1990s. Steel was what I would call an old world business. Employment was for life, wages and benefits were good, and global competition didn't drag US wages down to the bottom. However, most of these old economy companies are getting slowly bled to death by globalization and its effects on competition.
I want to make this point. I am still and probably always will be for free trade, low tariffs and a continued development of international economic interdependence. The primary reason is peace. People usually don't go to war with a business partner when everybody is making money. There may be intense negotiation to deal with problems etc... but no one kills each other.
The problem is change causes pain for all the economies involved. The automakers and airlines problems are an example of that.