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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.

Weekly Recap: Toyota, Mazda team up to 'make cars better'

Toyota and Mazda are teaming for a noble purpose: to "make cars better." That's how the two Japanese automakers termed their partnership, which was announced this week. So what does this actually mean? The companies said they will set up a joint committee to look for areas of cooperation and named safety and the environment as issues they plan to tackle. From a product perspective, it's believed that Toyota is interested in Mazda's Skyactive engine portfolio. In turn, Mazda has its eye on Toyota's fuel-cell and plug-in hybrid technology. While more specifics were not confirmed, the companies said the "agreement will go beyond the traditional framework of cooperation," and it has the potential to be a long-range partnership. "The main purpose of this initiative is to enhance the appeal of our cars," Toyota president Akio Toyoda said at the announcement. Previously, Mazda has licensed Toyota's hybrid tech and assembled compact cars for Toyota in Mexico. Akio Toyoda said these projects "triggered" the automakers to explore further collaboration. Dave Sullivan, product analysis manager for AutoPacific, said the tie-up echoes Daimler's wide-ranging work with the Renault-Nissan alliance. "This could be a well-groomed match due to each having very unique skill sets," he said. OTHER NEWS & NOTES Volvo selects South Carolina for US factory Volvo confirmed this week that it will build its first US factory in South Carolina, with construction set to begin this fall. The company first revealed plans in March, though it didn't announce a site. The plant will have initial annual production of 100,000 units, though the vehicle or vehicles to be assembled were not specified. The factory, located near Charleston, will open in 2018 and ultimately employ 4,000 people. The facility will help Volvo continue its growth strategy, which includes strengthening its presence in the US market, where it wants to sell more than 100,000 cars per year. "Building a plant in the US is a reflection of Volvo Cars' commitment to the US and the key role the US plays in our growth objectives," Lex Kerssemakers, senior vice president, Americas, said in a statement. Ford GT spied on the road The 2017 Ford GT was spotted testing around the Blue Oval's headquarters in Dearborn, MI, this week. The raw body panels were exposed, and they lacked paint or camouflage. It's the first time the GT has been captured on the street after a spring of auto show reveals.

Lincoln dealers to build standalone dealerships separate from Ford

Way back in 2011, Ford Motor Credit Co. established Lincoln Automotive Financial Services as part of what Automotive News called "a campaign to set the Lincoln brand apart." Lincoln's been on a wild, public ride in the seven years since, which included a near-death experience in 2013 under former Ford CEO Alan Mulally. But Ford's luxury brand has rebounded and is ready to take another shot at setting itself apart. Automaker execs have asked dealers with twinned Ford- Lincoln dealerships in 30 major U.S. markets to build standalone stores. According to company data, the move isn't a gamble — dealers with standalone showrooms sell more vehicles. Lincoln's standalone dealerships in the 30 major U.S. markets that account for 70 percent of luxury segment sales increased 48 percent from 2014 to 2017, compared to an overall Lincoln brand sales increase of 18 percent. After a former Ford-Lincoln dealer in Minneapolis opened a devoted Lincoln store this January, sales have climbed 60 percent so far this year. Dealers in Orange County, California, and Atlanta, Georgia have seen sales double since opening exclusive Lincoln storefronts. The sales manager at the Atlanta dealer said, "Customers have pulled up and said, 'This is how it should be.'" Robert Parker, Lincoln's head of marketing, said, "Customers expect the environment to be equal to the product. They want to buy a luxury product in a luxury environment." That issue repeatedly comes up when a mass-market brand launches a luxury product; observers have lately wondered how much the issue affects sales of Hyundai's Genesis brand. Out of 845 Lincoln showrooms nationwide, there are 150 Lincoln dealers in those 30 major U.S. markets. So far, 72 dealers have made or are working to make the standalone switch on their own. Lincoln is asking the remaining 78 shops to follow suit, to agree to a new facility by July 2019 and to have the store finished by July 2021. Only the showrooms would need to be exclusive, service and other back-end departments can remain in Ford-branded complexes. Wielding the carrot, Lincoln will help dealers with relocating, and pay more for every car sold. Wielding the stick, Lincoln said that come Q2 2019, it won't let twinned dealers sell Black Label trims if they don't already. Over the next couple of years, Lincoln will complete the revamp of its lineup. Said marketing honco Parker, "The next phase of the transformation is critical.