The world auto industry provides an amazing example of the power of competitive capitalism to provide consumers with dramatically improved value for their dollar. Unless, of course, you're the CEO of an auto company that has not been a winner in this race, or even keeping up with most others.
In a June 2005 column, "Car Wars," I wrote that "General Motors and Ford have always been global companies whose corporate headquarters happen to be in the United States. Daimler-Chrysler is a global company whose headquarters happens to be in Germany." A Toyota Camry or Honda Accord has a much higher domestic content (80 percent) than a Chevy Tahoe (67 percent) or Ford Mustang (60 percent).
Last summer, it was GM's difficulties that made the headlines. This summer was Ford's turn on the public pillory, as rating agencies dumped the company's bonds even deeper into the junk pile and Toyota outsold Ford in July.
Everyone has been offering unwanted advice to Ford's new CEO, Alan Mulally. A few weeks ago, the former CEO of Land Rover and Mazda, Charlie Hughes, co-authored a powerful Wall Street Journal piece with William Jeanes of Car and Driver magazine. They proposed that Ford sell Land Rover and Mazda, as well as Aston Martin, leaving just three venerable brands -- Ford, Volvo and Jaguar -- which date back to 1903, 1927 and 1922, respectively.
I don't see how Ford could sell Mazda, since the Ford Focus and Fusion are heavily dependent on Mazda's excellent underpinnings, including engines. But there need not be seven Mazda models or Ford clones of every Mazda. Hughes and Jeanes would shut down both Lincoln and Mercury, which sell expensively repackaged Fords.
Most important, when it comes to luxury and sport, Hughes and Jeanes would let Jaguar be Jaguar. That is certainly true of the awesome new XKR, for example, but not the middling Ford-based X-type (an embarrassment that should be ended). An Aug. 26 Wall Street Journal article about Ford contained a misleading graph labeled "Sore Spot: New models such as the XK haven't helped Jaguar sales in recent years." But that graph ended with June, before the first XK was sold.
The new model that really matters will be the redesigned S-Type for 2008, which will be positively gorgeous.
Just as Jaguar's iconic brand can compete with the best from Germany and Japan -- much better than Lincoln could ever hope to -- improved Volvos could likewise fill in the middle range once intended for Mercury. Aside from my caveat about Mazda, Hughes and Jeanes offered a bold and brilliant plan.
My own free advice is less ambitious, about such mundane matters as advertising, warranties, styling and rapid response to reported product flaws.
When it comes to advertising, the goal must be to sell cars, not public relations imagery. Ford began wasting millions of ad dollars in June with endless reruns of a cloying TV lecture by former CEO Bill Ford about the alleged corporate virtue of producing 250,000 more flexible fuel vehicles to "help save you money at the pump." That ad made no effort to persuade anyone to buy a single unnamed and undescribed vehicle.
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