Ford surviving on the Edge

Kai Ryssdal Oct 18, 2006

KAI RYSSDAL: You can’t build cars without parts. But you can’t get parts if your supplier’s not happy with its end of the bargain. That’s a lesson the Ford Motor Company learned Friday night. One of its suppliers turned off the tap over a pricing dispute. It only lasted one shift, but it cost Ford about 400 finished cars in that eight hours.

The automaker eventually coughed up the asking price for carpeting and plastic instrument panels. But it’s a pretty good indicator of how tightly strung things are at the country’s second-largest car company. It lost a billion and a half dollars the first six months of the year. And company executives say they’ll eventually wind up with just 15 percent of the U.S. car market.

Ford does still have a few tricks up its sleeve, though Los Angeles Times car critic Dan Neil’s gotten his hands on one of them. Hey Dan.

DAN NEIL: Nice to be here, Kai.

RYSSDAL: You’ve been out driving this car, it’s called the Ford Edge. It’s a CUV?

NEIL: That’s right. It’s a Crossover Utility Vehicle. Get used to it. It’s the next big thing. Ford says that this will be the biggest vehicle segment in the market by the end of the decade.

RYSSDAL: Alright, so the Edge is in this market. What is the Edge and why is it important?

NEIL: It’s kind of a tall station wagon. It has some of the elements of a station wagon, like the storage and the seating. It’s a five-seat vehicle with storage in the back. It’s got big wheels. It sits up tall. But it’s lighter and more maneuverable than a conventional, body-on-frame SUV.

RYSSDAL: And incredibly popular, this whole CUV concept.

NEIL: Yeah, apparently so. This is the fastest growing vehicle segment in the market and, as I said, Ford has pinned its hopes on this vehicle because the crossover segment — which, by the way it’s late getting to — is growing so fast it’ll be the biggest vehicle segment in the market.

RYSSDAL: Doesn’t that tell you a little something, though, that it’s late getting to the CUV segment?

NEIL: Well, you know, you could argue that they were perfecting it before they actually brought it to market. Or you could say that they were late on the trigger. Both, I think, are true.

RYSSDAL: We have talked — not you and I but other automotive specialists on this program —

NEIL: You’ve been seeing other automotive specialists? . . . I’m sorry to hear that . . .

RYSSDAL: I have. I’m so sorry. I know. . . . We’ve talked about the troubles of General Motors and Ford. Everybody knows about GM, but Ford, perhaps, is in worse shape, you think?

NEIL: Ford doesn’t have as much road to run off of as General Motors. And they’ve been through a lot. They’ve been dealing with this over-capacity issue in kind of fits and starts. And now they’re . . . have initiated what they call The Way Forward, which is, of course, the way out for a lot of employees. They’re going to lay off something like 30,000 U.S. autoworkers and close nine plants. So we’re looking at a much smaller company.

RYSSDAL: You and other sages of the trade are thinking that the Edge is a key moment for Ford. What’s the company saying? Are they up-front with what it means?

NEIL: Oh, yeah. Mark Fields, who’s the president of the Americas for Ford, has said, “This is the most important product we’ll launch this year.” And certainly it’s that, and maybe the most important product they’ll launch in the next couple of years because it will herald the renaissance of Ford if there is to be one. Everything’s in place, right? You know, the cost-containment is there. The design is there. It’s the right vehicle at the right time.

RYSSDAL: We’ve been down this road with Ford before. I refer you to the Taurus, which was supposed to be the be-all and end-all and ended up, you know, a rent-a-car, basically.

NEIL: Well, the first Taurus was amazing. The second Taurus was undone, perhaps, by its design. It was also undone by the fact that the market got a lot more competitive between 1986 and 1996 when they rolled out the second generation.

RYSSDAL: It’s not like it’s going to get less competitive now, though, for the Edge.

NEIL: No, this is the problem with the Edge. And it’s not with the Edge, per se. The Edge is a fine product, very nicely put together. It looks good, runs good. The competition is fierce. When you compare the top-line Edge with the top-line Acura RDX, for example — which is a similar SUV, crossover-type vehicle — it’s a tough comparison. And so, what’s really going to carry the Edge is its styling. And that might carry the vehicle even if the point-by-point, dollar-for-dollar comparison isn’t quite as strong.

RYSSDAL: Dan Neil writes on cars for the Los Angeles Times. He stops by here, you know, occasionally.

NEIL: Well, you know, when you’re not talking to other automotive authorities.

RYSSDAL: I know. You weren’t supposed to find out. Dan, good to talk to you.

NEIL: Alright, talk to you later, Kai. Bye.

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