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April 28, 2008

Exhaust Note #9: Kerkorian is Back

Tracinda Corporation Buying Into Ford Motor Company
Kirk Kerkorian, the incredibly wealthy 90-year-old investor and businessman, has long been well known among auto-industry watchers. He was first involved with Chrysler, back in the days when Lee Iacocca was turning things around. Later, his takeover attempt also sparked the notion of merging the company with another, which ultimately led to the creation of DaimlerChrysler. There are few today, other some who retired well off the deal, who would say that was a merger that was beneficial for either company, equals or not.

After eventually getting out of the Chrysler business, Tracinda bought enough of General Motors to get a seat on the board. Company man Jerry York held that seat and pushed for a GM-Renault-Nissan tie-up. Bound by duty to stockholders to explore the option instead of dismissing it outright, Rick Wagoner and GM staff worked with Renault-Nissan for a few months to prove what we all seemed to know in the first place: A Renault-GM tie-up didn't make much sense. Kerkorian's Tracinda sold off its GM stake and went home. The end of that story, right?

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Well, yes and no. Whether by the "third time's a charm" or "try, try again" schools of thought, Tracinda has been accumulating shares of Ford Motor Company since April 2, 2008, and offered today to buy more. And by more we mean enough to give Tracinda 5.6% of FoMoCo. But what does Tracinda really want? Does the company want take over a Detroit car company, no matter which? It does seem that Kerkorian is obsessed with making a major, direct impact on the automotive industry. His efforts so far have succeeded in shaking things up, often when it can be most disruptive, but not in improving the business overall.

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April 23, 2008

2008 Bullitt Mustang – Twisted Steel & Sex Appeal

There are only a few actors that I really remember from my childhood. W.C. Fields, Humphrey Bogart, Jimmy Stewart, John Wayne, and of course, ‘Mr. Cool’, Steve McQueen. I remember watching Steve in the first film ever produced with a truly spectacular car chase scene (aside from the Charger loosing something like 9 hub caps). I would crouch back in my seat as Lalo Schiffrin's soundtrack built up the pre-chase tension, and adrenaline pumped through my veins as the driver of the Charger buckled up for safety (not that it would do him any good in the end - ed.) and then punches it through the intersection. From then on it was flat out, white knuckles, and gritting teeth. It was the first time during a movie I thought I could actually smell the oil, and rubber, and hear the unrestricted exhaust.

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There have only been a few movies since then that have even come close. The French Connection (not quite), Ronin (almost), and The Transporter (lacked realism). Nothing has surpassed the cool factor of Lieutenant Frank Bullitt in his 1968 Mustang GT 390 as he punches it through the streets of San Francisco double clutching each shift and chasing down that black ’68 Dodge Charger.

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April 21, 2008

2009 Ford Flex: Head Turning Crossover

We've seen the Ford Flex on numerous occasions over the past two years - auto shows, press events, etc and have been pretty impressed with the style and the package of Ford's upcoming Crossover SUV. The Flex is a seven-passenger Crossover based on the Ford Taurus/Taurus X/Sable platform which itself is based on the Volvo S80. So, what makes the Flex different from the Taurus X that has the same DNA?

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Flex Has Personality Taurus X Lacks

First, the Flex has style. It looks like a huge Mini Clubman and I don't intend that as an insult. Rumor has it that the initial theme for the styling of the Flex was developed by the Land Rover studios in England and then Ford opted to use the concept as its Ford Fairlane concept vehicle that received positive reviews at its first viewing at the North American International Auto Show in Detroit.

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The interior is very well done and has excellent ingress/egress. The relatively stiff A-Pillar and gives a large front door with a generous opening. The rear doors are large making for very easy ingress/egress. Ford says the rear seat has five inches more knee room than an Expedition. The 3rd row seat folds flat into the floor, but it is not as slick as that on the Expedition and Navigator which has power assist. The seats are comfortable giving good support.

Flex is one of the first vehicles to benefit from Ford's new DNA for door closing sounds, engine sound, material feel, etc. These minor touches give the Flex a very upscale feel even though it is tough to get its price over $40,000. Base price is under $30,000 and there is a logical walk upwards from the base (still well-equipped) vehicle to the range topping Limited.

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Public Will Warm Up to Flex

Walking around the Flex display at Fabulous Fords Forever this past weekend at Knott's Berry Farm, I kibitzed as folks crawled over the Flex. They seemed genuinely surprised at the interior roominess of the vehicle and the size of the rear seat. They appeared to like the styling even though it is a bit polarizing (love-hate). One woman wondered if this was the "next minivan". Another thought it was bigger than her Suburban. In any event, Flex elicited mostly positive reactions and should sell very well when it is launched inlate summer.


April 14, 2008

Ford: Drive One

Break the Cycle of Apathy

Ford Division had its national dealer meeting in Las Vegas during the week of April 7 with more than 3,000 dealers in attendance. The Bellagio Hotel was over-flowing with Ford logos, banners and geegaws. At the same time, Ford was selling dealers on its new advertising campaign "Ford: Drive One". With "Drive One" as its platform, Ford is trying to create a 750,000-strong army of advocates to get consumers to reconsider its vehicles. Ford wants to break the "Cycle of Apathy" that appears to surround consideration of their products.

Ford figures if it can jazz up employees, retirees, dealers and dealership employees that word about Ford's quality gains and new products will spread virally through the North American auto market.. This is in addition to Ford's huge customer base and number of Ford enthusiasts that can be brought into the campaign, person-to-person outreach is the backbone of Ford's multimillion-dollar "Drive One" campaign, which started this month. As Jim Farley, Ford's Group Vice President of Marketing and Communications said, "There are thousands of enthusiasts with Ford Oval tattoos. I can count those with Toyota tattoos on one hand." The key is to get them working together to stimulate consideration for the Ford brand.

Ford started in early April briefing employees and retirees on the plan. Last week, Ford told its dealers about the new campaign in sessions in Las Vegas.

Unlike the "Bold Moves" campaign in 2006, Ford promises that Drive One will be around for years. Time will tell how long Ford management continues the Drive One message. Too often, when new management gets in place, the first thing to change is the advertising theme. (After all, what was the first thing Jim Farley did? Change the ad themes).

Dealers Involved in Developing Drive One Strategy and Implementation

Ford included members of their dealer council in the development of the new Drive One strategy. During many meetings in Dearborn in January and numerous conference calls and countless emails, the strategy evolved that results in Drive One. On a broader base, Ford surveyed more than 700 dealers as it developed the campaign. When including regional and local advertising by dealers, Ford says it annually spends $1.5 billion on advertising in the United States including Tier 1 through Tier 3 advertising. In the case of Drive One, Ford says they have buy in from not only Tier 2 advertisers (regional), but also Tier 3 (individual dealers).

The biggest difference at this dealer meeting is that Ford executives really listened to what dealers had to say, said Jeff Robberson of Robberson Ford-Lincoln-Mercury in Bend, Ore.

Engineers at the Dealer Show

For the first time ever at a dealer show, Ford brought in more than 60 company engineers to share specifics of the automaker's technological and product accomplishments with the people who are trying to sell vehicles. Many of the engineers had never met a dealer before in their career. This is typical of the isolation product engineers often operate in at a major auto company in the USA. (Asian and European manufacturers are much more likely to be giving their engineers hands-on, face-to-face experience with dealers and consumers).

Farley gave the example of an engineer demonstrating Ford's soybean-based seat foam that provides about 5% of the oil content in the seat foams in several Ford vehicles today. She got more than 100 requests for samples from dealers. Many of the dealers are in farming communities but never knew that Ford was using material grown by their prospective customers. Now that they know, the dealers can market that connection more directly to local consumers.

Employees... and Face-to-Face, Town-to-Town

Ford employees are appearing in advertisements and Internet videos. The campaign is focused on telling people about Ford's accomplishments in four areas: QGSS - Quality, Green, Safe and Smart.

While the employees will be touting QGSS, Ford is also using a spinoff of its 2007 research based ad theme where a Ford vehicle is put in the hands of a person for a week who presently drives a competitor and reacts to the Ford. In the Drive One scenario, Ford gives a Ford vehicle to a person driving a competitive product for a week. At the end of the week, the initial driver passes the vehicle to a friend so they can experience it as well. During the hand-off, Ford captures the transaction on video and uses it in their ads. Initially, Southern California and Atlanta are the areas used for the trials. Additional cities will be added as time goes on and even some individual dealers are thinking about doing this on their own.

Ford's Press Release on Drive One is found below the fold:

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March 14, 2008

Will Ford Ditch the V8 in the Mustang?

As CAFE standards continue to tighten their grip on auto manufacturers, decisions about next generation vehicles are becoming more complicated. While the Japanese are embracing alternative power, fuels, and materials, in the U.S., there are some basics that must be considered.

Case in point: The popular Ford Mustang. The 2020 CAFE rules, expected to start showing up in 2013 or so, will make the current engine lineup in the more powerful Mustang vehicles, ah... um... problematic. On the surface, an engine diet and workout program might give life to the car from an engineering point of view, but what about the perception of the public?

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February 18, 2008

Exhaust Note #3: Help! I’m so distracted!

It’s a fact of life that we are all “connected” more than ever today. We gab on our cellphones constantly, we check our messages both in front of computers and on the go on our smartphones, and we have more choices than ever over how we are entertained. For the most part, these are all positive changes in our lives and a clear sign of progress.

We live, however, in one of those “in-between” times when society hasn’t yet figured out how to merge progress with basic safety. You know, like back when automotive engineers figured out how to make cars go really fast but hadn’t yet invented the 3-point seatbelt. To what am I referring? I’m talking about being able to use all of these devices that keep us connected safely while driving.

This is a topic that’s been talked about time and time again over the last decade. Initially, people talked about people distracted as they talk on their cellphones, but since then, it’s gotten a lot worse. Now, people scroll through reams of playlists on their iPods (yes, I’m guilty as charged) as they read their email and text messages on their phones (and many try to write messages too). All this, while talking on their handsets while negotiating traffic filled with similarly distracted drivers? Oh dear.

Manufacturers have been trying for years to find ways to reduce this distraction, with mixed results. Among the most ambitious and comprehensive systems that attempt to reach the Holy Grail of connectivity and safety is Ford’s new SYNC, co-developed with Microsoft. It’s available on most Ford, Mercury, and Lincoln products – even the lowly Focus. So, it’s available to everyone, not just those rich guys who can afford all the gadgets.

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February 15, 2008

Fiesta Revival: Ford Confirms Name of Global Small Car

We reported on the Verve hatchback and sedan concepts that Ford showed at the Frankfurt and Detroit auto shows during the 2007-08 show season, and now we bring the news that Ford has confirmed the production name: Fiesta! The official reveal of the European three- and five-door hatchback versions is in Geneva in March. When the U.S. sees the car in 2010, it will be in sedan form much like the Detroit 2008 Verve concept.

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Ford is evaluating offering the hatchback in the States as well. Hatchbacks have been gaining in popularity in the States, but this market so far still buys far more sedans than any other car shape. The hatchback would be a nice addition to the U.S. Fiesta range, but the sedan is a must.

Fiesta is a cutesy name, but Ford already owns it. It has equity all over the world, and little, if any, negative baggage in the States. Yeah, there was once a Fiesta sold here, but who really remembers it? For the U.S. market, a bad choice would have been reviving Aspire or Festiva names. The success of this product in the States will depend on the product itself, not whether it's named Verve or Fiesta.

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February 06, 2008

Ford Transit Connect - Does Ford Realize How Cool This Thing Really Is?

Aimed at Small Businesses Feeling the Strain from High Fuel Prices
Now here’s an idea whose time has come. Today at the Chicago Auto Show, Ford unveiled its new Ford Transit Connect, a small European cargo van that has the potential to fill what could be perceived as a pretty big gap in the marketplace. If you’re a business owner that needs to haul stuff around, you have two main choices: a full-size van or a pickup truck. Both of these vehicle types represent capability and toughness, no doubt. However, they also use plenty of fuel, and are in many cases too much vehicle relative to their usage. For instance, does a flower delivery service really need 10,000-pound towing capability? Does an IT specialist really need 4,000 pounds of payload capacity? As fuel prices keep creeping up, many businesses are finding that their cost of doing business is going up significantly, and having too much vehicle for the job at hand is increasingly like throwing money away.

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Enter the Transit Connect. This compact car-based van is reminiscent of the Dodge Sprinter, but shrunk down to about the footprint of a Ford Focus. Thus, it’s tall, boxy, and utilitarian. But it’s also kind of funky and cool, with an honesty about its styling that makes it unexpectedly desirable. This type of vehicle has been tremendously popular overseas for decades – these small work vans are economical, easy to maneuver, and have tremendous volume inside their small exteriors.

Continue reading "Ford Transit Connect - Does Ford Realize How Cool This Thing Really Is?" »


February 05, 2008

Ford Edge Sport - Adds Dimension to Edge

The Ford Edge Premium Mid-Size Crossover SUV adds a new Sport model for the 2009 model year. Normally, we would criticize the Sport because its features include only upsized wheels, a body kit and some interior tweaks. It does not include an uplevel engine... just its standard 3.5L V6 which is no slouch, but we're lusting for the 3.7L V6 (Lincoln only, we understand) or the 3.5L Twin Turbo EcoBoost V6. Anything to give the Edge truly sporting credentials.

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Still, the Sport model does add a dimension that Edge has lacked. If I were selecting an Edge, this would be the model I would choose. Probably with 20s rather than DUBs.

The Ford Press Release is below the fold...

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January 23, 2008

Invisible Explorer

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Say it isn’t so! I sincerely hope that I’m wrong on this one, or at least over-reacting. Ford’s initial Press conference at the 2008 North American International Auto Show left me wondering, “”What about the Explorer?” Ford began the Sunday with Bill Ford, Mark Fields, Country music superstar Toby Keith, and enough fireworks and decibels to put a chill up your spine. We were shown the newly-redesigned F-150, the Verve Concept, and a herd of Mustangs. We saw the Explorer America Concept, or at least I think we did. It came on and off the stage faster than Charles Manson at a parole hearing. The pitch went something like this. “Unit body, 2.0 liter Ecoboost Engine, Adios!” I found this especially disheartening, because the vehicle looked so great. A forward-looking design that keeps real truck cues. Not another tall wagon!

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January 13, 2008

Ford Verve Previews 2010 Small Car - North American International Auto Show

Ford Targets Millenials with Verve
Ford will re-enter the small-car segment in the States, one they haven't really played in here since the not-missed Ford Aspire (often referred to as the Ford "Despair"). If the Verve concepts are anything to go by, Ford is preparing a car that people actually may want to own. Ford of Europe has done well with its small cars, including the current Fiesta. But small cars have been notoriously unprofitable when built in the States where small cars are sold on (low) price alone. In Europe, they are more fully-featured and can command profitable prices. In today's climate, it is time to take another go at small cars here, and Ford's take will arrive for the 2010 model year.

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2008 Ford Verve Concept

At this year's 2008 North American International Auto Show, we are actually seeing the third Verve concept. The first Verve concept was a three-door hatchback introduced in Frankfurt in September 2007. The first sedan was introduced in China in November. This January, NAIAS is home to the introduction of another sedan, much like the China car. Ford's show stand will also feature the three-door. Europe is mad for hatchbacks and the three-door is a no-brainer there. By the same token, the sedan is a given for the States. Depending on Stateside reaction to the three-door, Ford may offer it alongside the sedan. It's uncertain if it will wear the Verve name, but at least it is a good option.

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2007 Ford Verve Guangzhou Concept


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2007 Ford Verve Concept

And if you're unsure who Millenials are, this is the group aged 13-28 - most call this age cohort Generation Y. Ford says 11,000 of them get their first driver's license every day, and for most the first car is a small car. Giving this one styling cues that can appeal to kids who've never known a world without cell phones and adults who have forgotten such a world might allow Ford to meet the goal of making target customers from both groups happy.

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January 09, 2008

2009 Ford Glass Roof Mustang – No not Fastback… ‘Glassback’

The first Mustangs rolled off the assembly line and into American hearts and driveways mid-way-through 1964. Introduced to the public at the New York World’s Fair in April with a price tag of $2300 Ford sold more than 417,000 in its first year. Needless to say, it was a success right off the bat. It was the right package at the right price and it was on it’s way to becoming an American icon.

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Since then, nearly 9 million Mustangs have been sold and today the Mustang has remained one of Ford’s bright spots in their lineup. With retro styling and variants like the Bullitt, Warrior in Pink, Shelby GT500 and GT500KR (not to mention the rumored Boss or Mach 1 on the way) the Mustang remains very popular. With these ‘halo’ variants and long history and heritage the image and Mustang name still resonate with the young and old alike.

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Ford Explorer America - North American International Auto Show

Explorer America – A Sustainable Showcase

To help explain its vehicle sustainability strategy, Ford has created the Explorer America concept for the 2008 North American International Auto Show. Actually, the Explorer America tips Ford's hand about the next generation Explorer due in 2010. Shifting from a body-on-frame traditional SUV to a unit body crossover SUV, Ford shows they firmly believe that crossovers are where the SUV market is headed.

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The key here is the style and the package Ford is showing. Still a Premium Mid-Size SUV, Explorer America picks up more adventuresome styling than any Explorer before. It has overstated wheels and tires, large wheel openings, a tough and rugged appearance and a lowered roof line. Hopefully, the lowered roofline will be raised by production because spaciousness and headroom are things that SUV-buyers covet.

On the driver side, Explorer America has two conventional sedan-style doors. On the passenger side, Explorer America has a conventional front door and a sliding rear door like a minivan. Sometimes, automakers use center-opening or sliding doors on concept vehicles to allow them to showcase the interior better, so it is not known if the slider would make it to production. Anyway, it is an interesting approach.

Showcase for EcoBoost 4-Cylinder Turbo Powertrain

From Ford's early January press release....

The Explorer America concept delivers an approximately 20 to 30 percent fuel-economy improvement – depending on engine selection – while providing room for six and their gear, along with moderate towing and off-roading capabilities.

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A powertrain lineup includes a 4-cylinder 2-liter engine with EcoBoost technology delivering 275 hp and 280 lb.-ft. of torque or, as a premium engine, a 3.5-liter V-6 delivering about 340 hp. Depending on engine selection, fuel-efficiency will improve by 20 to 30 percent versus today’s V-6 Explorer.

Migration from current body-on-frame to unibody construction, reducing weight and delivering superior driving dynamics

A fuel-efficient 6-speed transmission with auto shift control, allowing the driver to select and hold a lower gear with just the turn of a dial when conditions warrant it

A weight reduction of 150 pounds for the V-6 version thanks to its downsized – yet superior performing – engine, as well as more lightweight materials, suspension and chassis components
Fuel-saving electric power assisted steering (EPAS) and other engine actions that deliver a fuel savings benefit of about 5 percent. Between 80 to 90 percent of Ford, Lincoln and Mercury vehicles will have EPAS by 2012

Aerodynamic and other parasitic improvements that add up to a 5 percent fuel economy gain
The production model of the Explorer changed the landscape when it arrived on the scene in 1990 as a 1991 model, delivering an experience as unique as the owners who would eventually shape the design of the Explorer America concept.

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Today’s Explorer leads the mid-size SUV segment in sales. Since its introduction 18 years ago, Explorer has sold more than 6.5 million vehicles.


Ford Announces EcoBoost Powertrains

In past discussions with Derrick Kuzak, Ford's product development czar, he has stressed that Ford would be making their cars and trucks much more efficient by reducing their weight and using higher technology engines. One of the first examples of that strategy was when Ford dropped the V8 engine from the powertrain plan for the upcoming Lincoln MKS sedan and will use a twin turbo V6 as its high performance powerplant.

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While we can't fathom a Lincoln flagship without a V8, the proof is in how it drives and what the durability and reliability of a turbo powertrain turns out to be. In AutoPacific and VehicleVoice Internet research car buyers generally opt for displacement (larger) and less engine technology (non-turbo, for instance). The old adage that "there is no replacement for displacement" generally holds true. But we can't ignore the issues of Global Warming (if it exists) or higher gas prices or impending CAFE rules that force new technology.

Ford has laid out its powertrain philosophy in an early January press release shown below the fold...

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November 23, 2007

Jaguar/Land Rover Sale - Rumors Heat Up That Tata Will be Buyer

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The rumors are heating up that the buyer of Jaguar and Land Rover is close to being finalized. The front runner appears to be the huge Indian conglomerate Tata and its automotive arm Tata Motors. Others involved in the due diligence process thought to be less advantageous to Jaguar Land Rover for various reasons. The two private equity firms - Apollo and One Equity Partners (led by former Ford CEO Jacques Nasser) - are thought to be a bit too aggressive to have the best interests of the Jaguar and Land Rover brands and their workers at heart. Profit, profit, profit is the name of the game among the private equity sharks. A second car company that is interested in JLR is Mahindra & Mahindra another Indian manufacturer specializing in SUVs and 4x4 vehicles. M&M may be a good fit with Land Rover, but Jaguar is well out of their experience zone.

So, Tata may be the winner when the dust settles adding JLR to its recent acquisitions of Tetley Tea and Corus Steel.

A November 23 Economist article is below the fold with more details.

Continue reading "Jaguar/Land Rover Sale - Rumors Heat Up That Tata Will be Buyer" »


October 10, 2007

Ford Taurus Has Not (Yet) Gained Traction

Ford has not solved the equation of the Ford Taurus (nee Ford Five Hundred from 2005 through 2007). Launched in late 2004 as a 2005 model, the Ford Five Hundred lacked the head-turning style and powertrain selection of the Chrysler 300 introduced at about the same time. Where the 300 is a risky styling tour-de-force, the Five Hundred erred on the side of milquetoast conservatism. Here, it is evident that even the mature large car market rewards expressive stylign much more than styling that blends in.

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Five Hundred Was Basically a Good Car - Timing/Competition was Unfortunate

Not that the Five Hundred was a bad car. It wasn't bad, it was just boring. In AutoPacific's Ideal Vehicle Award research the Five Hundred (along its stablemate Mercury Montego [now the Mercury Sable]) scored near theh top of the industry because of its outstanding seating package, visibility, cargo room and ergonomics. While its powertrain did not set any records, the anemic 203HP 3.0L V6 was adequate for the gray-haired buyers selecting a Five Hundred or Montego.

Launch and Leave Marketing Did Five Hundred No Favors

Adding insult to injury, Ford's marketing strategy left the Five Hundred high and dry after its introduction period. Launch and leave advertising for an all new car launched into a hotly contested market has proven to be the kiss of death. And for Five Hundred it practically was. Ford watched as Chrysler garnered kudos with its 300/Magnum/Charger while the Five Hundred/Montego/Freestyle struggled to keep Ford's Chicago Assembly Plant working on two shifts.

Major Change After Three Years - Five Hundred Becomes Taurus

Resource constraints prevented Ford from rushing forward changes it knew were necessary. It was decided to adopt a major freshening after three years on the market. Five Hundred gets fresh front end styling adopting Ford's three bar grille theme. The engine is now a 3.5L V6 getting 260HP mated to a 6-speed automatic transmission. The interior is upgraded and chassis is much more sporting. Oh, yeah, and the name has been changed from Five Hundred to Taurus. This decision was quickly reached by Alan Mulally when he concluded Taurus was too valuable a name to send to the scrap heap. (Frankly, it should have been Taurus 500 to bring the relationship closer together. Maybe the badges were too expensive).

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Could it Be Taurus is Now Great?

In fact, during a conversation with a crusty old journalist at a competitor's press event, he claimed the best car he had driven for the 2008 season was the new Ford Taurus. Jaws dropped, but he would not back down. He claims the Taurus is right up there with the best.

Well, unfortunately, freshening the styling, upgrading the powertrain and chassis and throwing Ford's not insubstantial marketing muscle at the Taurus (stressing Taurus 5-Star safety ratings) has not resulted in greatly improved sales. In fact, compared with September 2006 sales of the Five Hundred, Taurus sales for 2008 are down by about 40%. Of course, if you include a few hundred left over 2007 models the number approaches down 30% or so.

So, something drastic is happening. And drastic is NOT GOOD. To date, Ford's product and marketing have not taken off. Taurus is a much better car than the Five Hundred of a few months ago. Maybe Ford has moved too late with too little in a marketplace that no longer has room for error?