“The company will not invest in next generations of traditional Ford sedans for North America,” Ford President and CEO Jim Hackett announced today in releasing the company’s first-quarter earnings that expand the breadth of cost-cutting in many areas, including the paring of the car lineup. That means no next-gen Fiesta, Fusion or Taurus for the U.S.
The North American car lineup for the Ford brand will be reduced to two vehicles: the Mustang and a new Focus Active slightly raised hatch coming to the U.S. next year that will already have been on sale in Europe. The fate of platform-sharing Lincoln cars was not divulged.
One of the sole survivors: the Mustang expands with a hybrid version coming as well as the Shelby GT500. The other survivor, the next-generation Focus Active, will be imported from China.
Production of the Fiesta for North America ends in May 2019 but the subcompact car will still be available in other markets.
Workers in Chicago will stop building the full-size Taurus in March 2019, including the Police Interceptor Sedan. Ford will continue to sell the Police Interceptor Utility, based on the Explorer, which accounts for 80 percent of police fleet sales. China continues to sell the Taurus but it is a newer version that was never introduced in the U.S. And the full-size Lincoln Continental “remains an important part of the Lincoln lineup and is experiencing record sales in China,” a Ford spokesman says, adding the company does not comment on speculation about future plans.
The Fusion, which received an update for the 2019 model year, will continue production in Hermosillo, Mexico, for a few years before the plant is retooled for another product that Ford has not yet identified. And other markets will continue to offer the mid-size Fusion, or Mondeo as it is badged in Europe. Reuters has previously reported that the next-generation Lincoln MKZ mid-size sedan will be built in China to serve that market. It would be one of five Lincoln products that will be built locally for China’s consumers, most of them utility vehicles. Currently all Lincolns are built in the U.S. and exported to China.
Jim Farley, president of global markets, said in the future Ford will continue to offer a diverse passenger car business but not with traditional sedan silhouettes. The new-look vehicles will offer more utility. We envision more tall hatches and crossovers with car-design cues.
Ford is also making a big push for further electrification. There will be hybrids or plug-in hybrid versions of just about everything in the vehicle lineup including the F-150 pickup, Mustang, Bronco, Explorer and Escape.
The first pure electric vehicle, a Mustang-styled performance SUV, comes to market in 2020, and Ford is pledging 16 battery electric vehicles by 2022. Ford has also said it expects to be the No. 1 producer of hybrids by 2021.
Since taking over the top job almost a year ago, Hackett has been working on a cost-cutting and restructuring plan but raised the ire of investors by refusing to go into much detail of the six efficiency initiatives that are the crux of his plan. More information will be provided to investors at an event scheduled for Sept. 26.
But Hackett now is targeting an additional $11.5 billion in cost cutting by 2020—on top of $14 billion previously announced that chops $4 billion from the engineering budget. The new plan reduces capital spending to $29 billion over the next three years, meaning $5 billion less spent on developing new products such as cars that are not selling as well as profitable trucks and SUVs.
At a recent product lineup preview, Ford outlined plans to focus on utility vehicles and trucks, hinting at the extinction of the car lineup as we know it. By 2020, Ford will have replaced 75 percent of its lineup and added four new nameplates, all of them trucks and SUVs, reducing cars to just 14 percent of the lineup.
SUVs coming include the next-generation Ford Explorer which will share the new platform from the Lincoln Aviator, which debuted in concept form at the New York auto show and will include a plug-in hybrid option. The Explorer will also be offered as a hybrid and have an ST performance variant.
The next Escape will also bring back a hybrid. And the front-drive platform will spawn a similar-sized off-road compact SUV. The SUV lineup also grows with the Ford Bronco galloping back into the stable in 2020.
On the truck side, the F-150 had added a diesel engine and a hybrid version comes in 2020. A new Super Duty is also in the works for 2020. The return of the midsize Ranger pickup is next year and a Raptor version can’t be far behind.
Platforms will be replaced by five vehicle architectures: front-wheel drive unibody, rear-drive unibody, commercial van unibody, body-on-frame, and battery electric vehicles. Cost cutting is also helped by speeding up product development.
General Motors is seen as the more stable, and successful of the Detroit-based automakers, led by Mary Barra, a strong CEO not afraid to take drastic actions for the health of the company.
Fiat Chrysler is less predictable but has a transparency that Wall Street appreciates. As CEO Sergio Marchionne winds down in anticipation of retirement, FCA will release a new five-year business and product plan on June 1 that will reveal the continued course the company will take in his absence. This will be the third such plan Marchionne has released.
In releasing first-quarter earnings, Ford exceeded Wall Street expectations, but profits and market share are down in North America and the company’s struggles continue internationally with losses in Asia Pacific, South America, and the Middle East and Africa.
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