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Ford defends plan to shareholders: ‘We're simply reinventing the American car’

Ford's top executives took heat from shareholders over their plan to do away with sedans as we know them in Ford's North American lineup, as the company held its annual meeting Thursday. Critics said the plan to shelve the Fiesta, Focus and Taurus, reduce the Focus to one crossover model, and concentrate on high-margin trucks and SUVs was a shortsighted abandonment of entire market segments of affordable vehicles. "This doesn't mean we intend to lose those customers," Ford CEO Jim Hackett said. "We want to give them what they're telling us they really want. We're simply reinventing the American car." Ford has said SUVs/crossovers and pickups will constitute 90 percent of its North American lineup by 2020. And though only the Mustang and new Focus Active will remain, it plans to add new vehicles going forward that offer better fuel economy and utility, including EVs and hybrids. Hackett characterized the shift not as an abandonment of traditional cars but as a transformation of them. "We don't want anyone to think we're leaving anything," Hackett said. "We're just moving to a modern version. This is an exciting new generation of vehicles coming from Ford." It was Hackett's first annual meeting as CEO, and for the second year it was conducted online rather than in person. The change to Ford's lineup is part of Hackett's overall plan to cut $25.2 billion in costs by the year 2022. Executive Chairman Bill Ford Jr. blamed the negative reaction to the lineup plan on media coverage. "I wish the coverage had been a little different," he said. "If you got beyond the headline, you'll see we're adding to our product lineup and by 2020 we'll have the freshest showroom in the industry. The headlines look like Ford's retreating. In fact, nothing could be further from the truth." While Ford was clear about its plans for the Blue Oval, it has been less clear about the Lincoln brand. Hackett on Thursday said only that the Lincoln Continental, re-introduced just two years ago, would continue "through its life cycle" — but it has been such a slow seller that rumor has Ford killing the Continental again after that, and Hackett made no mention of a new generation. Presumably the MKZ sedan will go away when its twin the Ford Fusion does, but although Ford has outlined end dates for other models, the Fusion's departure is open-ended. The stock price has been a frustration for investors for years and has fallen 12 percent since the first of the year.

Ford F-150 extended cab struggles in IIHS small overlap test

Update: Ford issued a statement to Autoblog to clarify the results of the test and dispute the IIHS repair cost estimates. A quote from a Ford representative has been added to the story. See the full statement below the IIHS press release. Of all the vehicles undergoing crash tests this year, few will be as closely watched as the new 2015 Ford F-150. That's not only because it remains the top-selling vehicle in America year after year, but also because it features an aluminum body instead of steel. While the F-150 performed well in the Insurance Institute for Highway Safety test, one factor prompted the institute to undertake a second round of testing that uncovered a problem. Like most full-size pickups, the F-150 is available in several cab styles: the regular two-door, the extended SuperCab and the four-door SuperCrew. The IIHS typically takes the most popular version of a particular model for testing, and in the Ford truck's case that meant the SuperCrew. The F-150 performed well in all the tests the IIHS put it through, including the small overlap test in which the vehicle is driven 40 miles per hour into a five-foot-tall barrier impacting the front left corner of the vehicle. Its overall performance in the tests earned the F-150 a Top Safety Pick rating, missing out on the higher Top Safety Pick + rating only because it doesn't have an automatic braking system. But how do the other versions of Ford's best-seller hold up? Given that even less popular versions of the F-150 still sell more than many other vehicles on the market, the IIHS put an extended cab through the same battery of tests. It performed comparably except in one area: the small overlap test. In that case, the extended cab model's steering column was pushed eight inches into the cabin (dangerously close to the crash test dummy's chest), the dummy's head missed the airbag almost entirely and hit the instrument panel, and the dummy's legs would risk sustaining "moderate" injuries. The reason for the disparity is that "Ford added structural elements to the crew cab's front frame to earn a good small overlap rating and a Top Safety Pick award but didn't do the same for the extended cab," according to the Institute's chief research officer David Zuby. "That shortchanges buyers who might pick the extended cab thinking it offers the same protection in this type of crash as the crew cab.

November U.S. new car sales mixed as automakers deepen discounts

DETROIT — Major automakers posted mixed U.S. November new vehicle sales on Friday and predicted a competitive December as they rushed to sell vehicles and boost their numbers before 2017 ends. Automakers are trying to sell down 2017 model-year vehicles, offering high discounts to consumers as the year-end nears. In 2016, the industry reported record annual sales of 17.55 million units. According to consultancies J.D. Power and LMC, discounts have been above 10 percent of the average transaction price for 16 of the past 17 months, a level experts say is unhealthy and unsustainable. The November sales results come as the National Automobile Dealers Association said on Friday it expects new vehicle sales to decline to 16.7 million units in 2018, after dropping to 17.1 million for the full year in 2017. If that forecast comes true, the race to move new vehicles off dealers' lots will only intensify next year. Brandon Mason, a director at PwC's automotive practice, said a worrying trend for the industry was a rising number of subprime loans. He said subprime levels are at just over 20 percent of originations, against more than 30 percent prior to the Great Recession, but recent increases remain a concern. "That's a bit of a red flag," Mason said. "It's something to keep an eye on as we move into 2018." November results by automaker: General Motors: Sales fell 2.9 percent, with sales to consumers flat against the same month in 2016. Much of the decrease was driven by lower fleet sales. GM said strong SUV and crossover sales pushed its average transaction price for the month above $37,000 for the first time. The level of unsold cars, which has been a concern for analysts and the industry, rose slightly to 83 days' supply, from 80 days at the end of October. "More vehicles are sold in December than any other month, and we are very well positioned because we have momentum in so many segments, but especially in crossovers," said Kurt McNeil, U.S. vice president of sales operations. Fiat Chrysler Automobiles: Fleet sales are low-margin, and FCA in particular has targeted a significant reduction in this type of sale in 2017. It posted a 4 percent overall decrease in sales for November, but fleet sales were down 25 percent while sales to consumers were up 2 percent on the year. Ford: The No. 2 U.S. automaker reported a 6.7 percent increase for the month, with fleet sales up nearly 26 percent and retail sales 1.3 percent higher than in November 2016.