Spin doctors have no cure for poor planning

All things considered, Ford must be well pleased with the muted fallout from its decision to end vehicle assembly at Dagenham. There will be a net loss of around 1,400 jobs and no Fords will be made in Britain for the first time since 1911. And yet, thanks to some judicious leaks, the company managed […]

All things considered, Ford must be well pleased with the muted fallout from its decision to end vehicle assembly at Dagenham. There will be a net loss of around 1,400 jobs and no Fords will be made in Britain for the first time since 1911.

And yet, thanks to some judicious leaks, the company managed to put a positive spin on the coverage by simultaneously announcing Dagenham is to be turned into a diesel engine-building `centre of excellence’. It was great public relations – which masked many years of management failure.

Ford sold about 1.65 million vehicles in Europe last year, but says it was burdened by the cost of facilities capable of producing 2.2 million units. By its own admission, it has had an over-capacity problem for well over a decade. In fact, it is more like two decades, which makes it a mystery why the company has taken so long to take action.

Ford’s internal problems, though, are of no concern to consumers, who are interested only in products. And the statistics show fewer and fewer of them are tempted by Fords. Generally buoyant demand in western Europe in recent years has helped to mask the problem, but the brand’s falling market share is now at an historic low of under 9%. And its share of the pivotal German market has been particularly hard-hit.

Neither has Ford grabbed as much business as its rivals in the recently liberated markets of central Europe. The Focus aside, Ford’s model line-up looks tired. The scenario is similar with diesels. With European diesel car demand rocketing towards one third of total demand, Ford finds itself with a narrow range of engines which are technically outclassed. But thanks to joint ventures with Peugeot-Citroen, modern, high-speed diesels are on the way, including small displacement units and V6s and V8s. Ford clearly got its product planning wrong as well as its sales expectations.

All the talk of over-capacity is too glib. It is an issue, as Phoenix, Saab and Volvo know, but it is not a huge problem for most mass-market car makers in Europe.

For Honda, Nissan and Toyota, the problem is one of not enough, rather than too much – all are adding capacity. Audi, BMW, Mercedes-Benz and Porsche production lines are bursting at the seams. Renault and Peugeot-Citroen are working three shifts and some Saturdays in many factories to meet demand. Other high-volume makers like Fiat, General Motors and the Volkswagen Group have good capacity utilisation in spite of establishing more factories in recent years.

The reality is that Europe’s over-capacity problem has for years been mainly a Ford problem. Idle factories, dowdy products and a falling market share merely point to planning inadequacies by Ford managements.

Europe chairman Nick Scheele and president David Thursfield, who are belatedly addressing the problems, are too polite to acknowledge this. But then, one of those responsible is now their big boss in Dearborn – Ford president Jac Nasser.

Richard Feast is editor-at-large for Automotive World

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