Lincoln needs a farewell address, not a new marketing plan

[RichardJensen]

Your logic fails me Jensen

 

It's quite simple: If the argument that $1B is insufficient to build a "proper" Lincoln, then here should be evidence elsewhere to support that.

 

You cannot ignore the success of the MKZ thus far (14 day turn rate, 7 days for the hybrid), and say, "but it won't work because they're not spending enough money, based on this context-free report I read."

[silvrsvt]

It's quite simple: If the argument that $1B is insufficient to build a "proper" Lincoln, then here should be evidence elsewhere to support that.

 

You cannot ignore the success of the MKZ thus far (14 day turn rate, 7 days for the hybrid), and say, "but it won't work because they're not spending enough money, based on this context-free report I read."

 

 

As for the days on the lot for the MKZ....there is prob some pent up demand for them coupled with shortages. Lets see if its still selling like this 6 months from now....but early signs are encouraging.

[ZanatWork]

Richard...I'm curious...why is it that I'm supposed to have a detailed biz for everything I state? I understand that you're going to go to this approach every time you don't like a point (or the poster), but the fact that no other mod on any other car board I've seen pushes for something like a detailed cost/expense projection summary on an idea. Not one, just where you are.

You also tried to make the past irrelevant, which was bizarre.

Lincoln has awful perception, cataloged consistently...right down to the very negative "alarmingly Lincoln-like" description of Honda Civic controls in the May issue of Car and Driver.

Here's somthing: if you, every single time you make a point, back it with internal Ford (or the appropriate carmaker's) documents and YouTube videos of board/design crew discussions outlining and confirming it...you then have some business to ask it of others.

Until then, every single post you make about costs, business cases, and the like is obviously completely irrelevant and you should just not bother. That's the message you send me and others when you don't agree with our point.

So, how's this: you either provide posters with the gigabytes of internal Ford information required to expound on our points, and to defend yours...or just quit being a jerk about these things. Seriously. You know that you don't have that data, and that it's likely we don't...so why do you ask for it? Oh, yeah...because it's you're way of killing a point you don't like.

It's a cowardly tactic, and furthermore ridiculously out of place on this level of board. If the requirements were a BA in business with a specialty in product development to post here...you'd begin to have some relevance with your quips. As those requirements do not exist here, perhaps find another way to state your disagreement. It's really annoying, and frankly pretty chickens**t.

Nothing makes "business sense" without reference to opportunity cost. Where is your discussion of the opportunity cost of building a coupe?

[akirby]

The fact that you think references to business cases and opportunity cost to explain why decisions are made or not made about which vehicles to produce and how is irrelevant makes you totally irrelevant and ignorant.

 

What YOU think sells cars (image, high performance, comparison wins, social media requests) is NOT what sells cars as evidenced by the best selling luxury vehicles (ES, RX, Caddy SRX, etc. etc.) which we've pointed out repeatedly and which you continue to ignore. You don't need access to internal documents to see what sells and what doesn't.

[FordBuyer]

FB,

You have to define what is a successful "Licoln Recovery" in your mind. And, with the reported $1B investment, is it realistic? To me, with that money, if Ford can bring Licoln back to "Tier Two" luxury brand, it would be a resounding success. That would mean Lincoln will have achieved tremendous growth (30+% annually, from current low base), and is relevant again.

As with you, I too think MKC will become Lincoln's volume leader. That kind of impact will be huge: adding more sales than MKZ month after month, it's success will define how successful Licoln will be.

I'm hoping, by this time next year, MKZ+MKC sales could be around 8000/month, with the rest 4 providing ~4000/m.

 

Like many on here, I do see a path to middling second tier IF Lincoln comes up with competitive MKC, new MKX, and MKExplorer. And if MKC is offered in hybrid form also. If you look at sales of last generation MKZ, the only reason it sold in 3,000/month range was because of 1200-1500 hybrid sales/month added to it. Kudos to Ford offering it in hybrid form also. Lexus understands that luxury buyers want great fuel mileage along with great technology that comes with it. So yeah, MKC could sell in that range with hybrid model too. Also assuming economy stays strong, and luxury sales continue to increase. Lots of IFS, but certainly doable assuming again Lincoln does a great job with new models, and spends hundreds of millions on marketing since Lincoln needs it with so few newer models on road anymore. And it also means Lincoln blowing hole in that $1 billion budget Ford gave them. To appeal to more than just Ford salaried retirees, Lincoln needs to get other's attention with some special offerings.

[Extreme4x4]

Hmmm...I didn't know that you could get an Escape up to $40K even in a Titanium model. That certainly makes it more challenging for Lincoln to come up with MKC model that will cost over $10,000 more in most cases with exact same drivetrain. That is why I would think it would be important to offer it with 2.7L V6 or hybrid form to differentiate it more and justify the much higher price. If it means putting big whole in your development budget, so be be it. At least you really tried and went for broke. Beats being too damned conservative, playing it too safe, and failing in the end as smart customers see through your ruse.

 

Please show me the MKC engine line-up................... or, you are talking out of your ass again. This is a mistake that you continually make.

 

I find it interesting that the MKC has now become a middling effort that will only sell because it is in a popular class, but won't sell really well because it is................. or isn't.................. what you feel that a Lincoln needs to be (a BMW copy). All of this based on a production vehicle that we have not seen, and specs that we are not privy to. In other words, based on your imaginative musings.

 

Some of you sure have an easy time spending Fords money. Lets throw billions at a flagship vehicle that will never make money, on the obscure chance that it will bring enough interest to the brand, to make it close to being worthwhile. Also, lets do so while our full line-up is not ready, so they have few interesting vehicles to actually buy. Why should they do that?? So some people who would never buy one anyway, can brag about it on an internet forum, and so fickle magazine reviewers will gush about how fantastic................. and overpriced it is.

 

BTW, financial information about GM and Cadillac has always come from wescoent, who was privy to that information. No, it isn't a youtube video, but instead is better. Someone who has actually worked with the real numbers, and not the happy, happy, joy, joy, lets reallocate costs to other divisions numbers so the board doesn't shut down Cadillac for being the money pit that it is, numbers. What Cadillacs sell?? For the most part, it is the lower price models. Why do they sell?? Because they are a cheap Cadillac that is not a bad car. How many $60-80K Cadillacs do they sell?? Not many, short of the V-series to enthusiasts, and Escalades.

 

This is what some want Ford to copy. Why?? Since when has a copy ever sold as well as the real thing??

 

Once again, maybe we should wait more than a couple of weeks, to see how things transpire. Maybe we should see the MKC, and its specs, before we declare it is a middling effort that will only sell because it is in a popular segment. Maybe, we should see what else Lincoln has up its sleeves, before decrying its death. Finally, maybe we should have an open mind to understand that what we personally want in a vehicle has nothing to do with whether that vehicle will sell, have a ROI, and add to stockholder value. In other words, understanding that our whims may not be fiscally prudent.

[ZanatWork]

...and the poster that just can't stand me...stays on my thread. Hypcrisy, thy name is akirby.

My point, simply, is that if Richard is going to demand a biz case complete with costs, etc...then he and BoN should make the same available, and he should never, ever shoot down an idea without being backed by the same.

Also, you can't separate the personal from the point. At all. By calling me "totally irrelevant and ignorant", you don't take issue with my posts (smart, because I've shown you to be the fool repeatedly), but you claim that my existence is irrelevant and that I'm ignorant...both points that my family, friends, like-minded posters, and scores of fellow musicians can easily prove to be untrue. Also, the "ignorant" bit, with all I've cited in terms of Ford's history, lineup, managerial changes, and even the writing I've done for the site previously, falls on its face like all your attempts to hack at me.

I also cite sales constantly, but you ignore them because they make my points. In this thread, I cite the MKZ's sales inferiority to the ES...I guess you missed that.

You miss a ton of things. You're not good at this, and should just stop. Why are you on one of "my" threads, again, if you are just going to be made to look foolish one more time?

The fact that you think references to business cases and opportunity cost to explain why decisions are made or not made about which vehicles to produce and how is irrelevant makes you totally irrelevant and ignorant.

 

What YOU think sells cars (image, high performance, comparison wins, social media requests) is NOT what sells cars as evidenced by the best selling luxury vehicles (ES, RX, Caddy SRX, etc. etc.) which we've pointed out repeatedly and which you continue to ignore. You don't need access to internal documents to see what sells and what doesn't.

[akirby]

scores of fellow musicians

 

Well that certainly explains a lot.

[FordBuyer]

Well that certainly explains a lot.

 

 

So exactly what does that explain Mr. Kirby? Will be interesting to see how you bullshit your way out of that box you willingly entered. Now go spin Kirby.

[akirby]

So exactly what does that explain Mr. Kirby? Will be interesting to see how you bullshit your way out of that box you willingly entered. Now go spin Kirby.

 

It explains why he doesn't seem to understand how to run a business. Are you a musician too?

[jpd80]

To be fair, the selection of products and the cost involved in the expected features of the vehicle has to be taken into account

and compared with other vehicle choices are made. None of us has the luxury of that baseline data but we can make the

reasonable assumption that using an existing platform as opposed to a new dedicated platform will usually guarantee

lower investment cost that also leads to an earlier return on investment.

Edited April 14, 2013 by jpd80

[RichardJensen]

You're done, FB.

[RichardJensen]

Richard...I'm curious...why is it that I'm supposed to have a detailed biz for everything I state?

 

Because you said this:

 

then it makes all the business sense in the world

 

If you're going to say that something makes sense from a business perspective, you should be prepared to offer that business perspective.

 

In your case, you are asserting that Ford offer a luxury coupe as, basically, an advertising gimmick. If so, why would this be a more effective use of Ford's capital than a conventional ad campaign coupled with greater investment in individual product differentiation?

 

And if you are going to argue that Ford should spend as much as they would spend anyway, and then exceed that by their investment in a loss-leading halo car, then can you furnish any similar instances where such a vehicle enhanced the sale of other products?

 

For instance, did the SC400 boost sales of mainstream Lexus products? Did the G37 increase sales of other Infiniti products? Has the CTS coupe bolstered sales of the XTS and SRX?

Edited April 14, 2013 by RichardJensen

[Edstock]

It explains why he doesn't seem to understand how to run a business. Are you a musician too?

 

 

What is the difference between a dead chicken in the middle of the road and a dead bass trombone player in the middle of the road?

 

The chicken was on its way to a gig.

[papilgee4evaeva]

For instance, did the SC400 boost sales of mainstream Lexus products? Did the G37 increase sales of other Infiniti products? Has the CTS coupe bolstered sales of the XTS and SRX?

 

The purpose of the G37 coupe and convertible was to match lineups with the 3 Series, not to provide a halo effect over the brand. Infiniti pretty much wanted to be the Japanese BMW, and just having a sedan in the entry-level market wasn't gonna cut it.

 

One could argue that the STi and Evo bolstered sales of the Impreza and Lancer, respectively. But a good counterargument would be something like "Subaru and Mitsubishi aren't luxury brands" or "luxury brands are their own halo."

[RichardJensen]

The purpose of the G37 coupe and convertible was to match lineups with the 3 Series, not to provide a halo effect over the brand. Infiniti pretty much wanted to be the Japanese BMW, and just having a sedan in the entry-level market wasn't gonna cut it.

 

One could argue that the STi and Evo bolstered sales of the Impreza and Lancer, respectively. But a good counterargument would be something like "Subaru and Mitsubishi aren't luxury brands" or "luxury brands are their own halo."

 

Exactly. The G37 wasn't expected to bolster sales elsewhere.

 

Also the STi is a reasonable example of a halo product enhancing the perceived value of that particular model--but hardly the whole dang brand.

[RichardJensen]

Finally, I want to say something in favor of 'business cases'.

 

Some individuals like to pooh-pooh business cases.

 

I'm not one of those people.

 

When you are making decisions involving the expenditure of hundreds of millions of dollars at a corporation that employs hundreds of thousands of people (with hundreds of thousands of additional people depending on your corporation for pensions), then it is completely irresponsible to make decisions without regard to 'business cases'.

 

It's not romantic, and it's not glamorous, and certainly, it means delays and compromises.

 

But the alternative is, for a company like Ford, extremely unpalatable.

 

Ford, with strict discipline and very conservative assumptions, rebuilt their business. GM, with profligacy and optimistic assumptions, spent a fortune on Cadillac instead of Chevrolet, Saturn instead of Chevrolet, Hummer instead of Chevrolet and Buick instead of Chevrolet.

 

Then they went bankrupt, and got rid of Saturn, Pontiac and Hummer---but not enough has changed. They persist in assuming that their entry level brand cannot deliver sufficient profits, and so they continue to prop up artificial distinctions between Chevrolet and Buick, thinking that preserving that distinction will be more profitable than erasing it.

 

They also invest far more in Cadillac than Ford invests in Lincoln. Again, based on their assumption that Cadillac can deliver far more profits than it is capable of delivering.

 

The result is that GM's profits are significantly lower than Ford's on substantially higher revenue, thus resulting in dramatically lower margins.

 

---

 

And I assure you, this is because GM is not being responsibly managed, as compared to Ford.

 

GM was given any number of advantages over Ford, on the basis of their bankruptcy reorganization.

 

They have capitalized on none of them.

 

---

 

Again, to bring this back around to the original point: You must manage a corporation of this size with close attention to the bottom line. This doesn't mean that you should not be creative, or innovative, but it is incredibly irresponsible to 'gamble', as GM has done time and time again.

 

---

 

Essentially, and here's the difference between Ford & GM.

 

Ford's primary source of profit and revenue is the Ford brand.

 

GM's primary source of profit and revenue is the Chevrolet brand

 

Ford has cultivated, reinvested in, and assiduously added value to the Ford brand, even if that has meant neglecting Lincoln over the past six years.

 

GM has neglected the Chevrolet brand.

 

Can you see the difference here?

 

It is irresponsible for a company that, in a nutshell, feeds, clothes, and shelters hundreds of thousands of people not to take care of the aspects of its business that makes this possible.

 

---

 

So yes, please, let's have much more boring Ford activities regarding Lincoln! Let them continue to gradually launch products better than their predecessors and treat the division as an investment that is expected to pay returns, rather than as a hobby farm in which executives can play.

[BORG]

Finally, I want to say something in favor of 'business cases'.

 

Some individuals like to pooh-pooh business cases.

 

I'm not one of those people.

 

When you are making decisions involving the expenditure of hundreds of millions of dollars at a corporation that employs hundreds of thousands of people (with hundreds of thousands of additional people depending on your corporation for pensions), then it is completely irresponsible to make decisions without regard to 'business cases'.

 

It's not romantic, and it's not glamorous, and certainly, it means delays and compromises.

 

But the alternative is, for a company like Ford, extremely unpalatable.

 

Ford, with strict discipline and very conservative assumptions, rebuilt their business. GM, with profligacy and optimistic assumptions, spent a fortune on Cadillac instead of Chevrolet, Saturn instead of Chevrolet, Hummer instead of Chevrolet and Buick instead of Chevrolet.

 

Then they went bankrupt, and got rid of Saturn, Pontiac and Hummer---but not enough has changed. They persist in assuming that their entry level brand cannot deliver sufficient profits, and so they continue to prop up artificial distinctions between Chevrolet and Buick, thinking that preserving that distinction will be more profitable than erasing it.

 

They also invest far more in Cadillac than Ford invests in Lincoln. Again, based on their assumption that Cadillac can deliver far more profits than it is capable of delivering.

 

The result is that GM's profits are significantly lower than Ford's on substantially higher revenue, thus resulting in dramatically lower margins.

 

---

 

And I assure you, this is because GM is not being responsibly managed, as compared to Ford.

 

GM was given any number of advantages over Ford, on the basis of their bankruptcy reorganization.

 

They have capitalized on none of them.

 

---

 

Again, to bring this back around to the original point: You must manage a corporation of this size with close attention to the bottom line. This doesn't mean that you should not be creative, or innovative, but it is incredibly irresponsible to 'gamble', as GM has done time and time again.

 

---

 

Essentially, and here's the difference between Ford & GM.

 

Ford's primary source of profit and revenue is the Ford brand.

 

GM's primary source of profit and revenue is the Chevrolet brand

 

Ford has cultivated, reinvested in, and assiduously added value to the Ford brand, even if that has meant neglecting Lincoln over the past six years.

 

GM has neglected the Chevrolet brand.

 

Can you see the difference here?

 

It is irresponsible for a company that, in a nutshell, feeds, clothes, and shelters hundreds of thousands of people not to take care of the aspects of its business that makes this possible.

 

---

 

So yes, please, let's have much more boring Ford activities regarding Lincoln! Let them continue to gradually launch products better than their predecessors and treat the division as an investment that is expected to pay returns, rather than as a hobby farm in which executives can play.

This is why I still come here.

[Anthony]

You cannot ignore the success of the MKZ thus far (14 day turn rate, 7 days for the hybrid),

 

 

Every time you post that, it reminds me of this quote:

 

 

 

The average Caliber is taking 10 days to leave the dealer lot, and the number is not going up even though the car is in its fifth month on sale.

 

 

I keed I keed

 

[jpd80]

Essentially, and here's the difference between Ford & GM.

 

Ford's primary source of profit and revenue is the Ford brand.

 

GM's primary source of profit and revenue is the Chevrolet brand

 

Ford has cultivated, reinvested in, and assiduously added value to the Ford brand, even if that has meant neglecting Lincoln over the past six years.

 

GM has neglected the Chevrolet brand.

 

Can you see the difference here?

 

It is irresponsible for a company that, in a nutshell, feeds, clothes, and shelters hundreds of thousands of people not to take care of the aspects of its business that makes this possible.

Here's the kicker for me,

These days, Ford & Lincoln combined monthly sales are now much closer to GM grouped brands

Ford's margins in that market continues to be 10% or better even with fleet sales at 32%

Even with 27% fleet sales, GM is still stuck at 7.4% return, even with increased Buick and Cadillac sales..

While I give credit to GM for being disciplined with fleet sales, I can't help thinking that's why inventory is bulging.

 

I would much rather see a thriving Ford brand with consequential subdued Lincoln sales as collateral damge

than putting Lincoln ahead of the essential priorities of leveraging the entire Ford brand and its products.

 

Could you imagine the outrage if Ford cancelled the 2010 upgrades on F150 because it wanted to deliver a new RWD/AWD series of Lincolns

Yet when GM does it, they get a free pass and accolades by ll and sundry...

Edited April 15, 2013 by jpd80

[akirby]

What Richard said. And let me add the following.

 

I've worked on several 7, 8 and 9 figure business cases and been involved in budget planning for a fortune 100 company. Some people don't realize that there are always more projects with positive ROI than the company has funding for. There might be enough funding for 100 projects but there are 150 or 200 on the list. There is only so much capital available so you have to prioritize the projects based on cost of investment, speed of ROI and strategic importance.

 

There might be 4 new vehicle projects asking for funding, all with positive ROI but only enough funding for 2.

 

It's never as simple as "can we sell it at a profit?". If Ford was irresponsible like GM then they'd just build whatever made them happy and screw the business case. Just like the Solstice/Sky and XLR. There was never a valid business case for those products. How much did GM waste on those alone?

 

The other factor is that you can usually come up with a positive ROI for a single project. E.g. individual projects for 3 new vehicles all built on different platforms. Looked at individually you could approve each one and be assured that you're doing the right thing. But a smart company looks at those 3 projects and thinks "what if we do them all on the same platform?" and it turns out the ROI for that is 10x the ROI from doing them individually. GM is doing projects the first way. Ford seems to be doing more of the latter.

 

If you don't understand all this then you don't understand why companies make the decisions they make.

[Hugh]

Amateurs discuss Tactics, Professionals discuss Logistics.

[RichardJensen]

And, in case someone tl;drs my previous post, here's the summary in one sentence:

 

Ford's first responsibility is its employees, not enthusiasts.

 

---

 

If pleasing one ensures steady work for the other, then by all means, go for it. If not, then not.

[RichardJensen]

Every time you post that, it reminds me of this quote:

 

I liked the Caliber. I still think it's a nice looking vehicle. Chrysler *may* have overestimated demand for it, though..................

[Fgts]

I go out on a limb here and say I wouldn't keep looking at GMs past mistakes and say Ford is that great and cares about workers (The Mercury dealer "promise", the Atlanta plant lie and shutdown to name a few) nor customers ( the 90s Taurus tranny/headgasket situation, Pinto) or make good decisions ( 90s concede the car-market to the Asians over SUVs, PAG).

 

Granted Ford made great decisions and vehicles just because someone goes another route dont mean it's a bad choice. If someone can make a car or platform that not only make money but its what people want whats wrong with that?. Can't just look at one companys way and say "this is how its done", god forbid that every carmaker is run like Toyota (but at least you can get a rwd/sedan and coupe from them.).

Edited April 15, 2013 by Fgts