Ford chief seeks help from Toyota

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By Micheline Maynard International Herald Tribune
December 27, 2006
(Detroit) The new chief executive of Ford Motor, which is struggling to bounce back from one of the worst crises in its history, met last week in
Tokyo with the chairman of Toyota Motor, which is poised to become the world's biggest auto maker next year.
Ford's chief executive, Alan Mulally, and Mark Fields, the head of Ford operations for the Americas, attended the meeting last week with Toyota's chairman, Fujio Cho, and other top Toyota executives, senior officers at both companies said Tuesday, speaking on the condition of anonymity.
Toyota issued a statement Wednesday describing the meeting as a courtesy call, but did not say what was discussed.
"We held talks at the request of Ford," the president of Toyota, Katsuaki Watanabe, said in Nagoya, according to Bloomberg News, citing Kyodo News.
Toyota and Ford officials, as well as the Japanese news media that first reported on the meeting, indicated that the talks had focused on developing environmentally friendly technology, like hybrid-electric and hydrogen fuel systems, as well as on ways that Toyota could help Ford improve its manufacturing efficiency.
The meeting of Mulally, Fields and Cho follows talks held this summer between General Motors, Renault of France and Nissan of Japan.
But Ford and Toyota are not believed to have discussed anything that resembled the joint purchasing or car- production ideas that were the subject of GM's talks with Renault and Nissan, which ended in October without any agreement.
Ford and Toyota have an association that stretches back to the 1950s, when Ford allowed managers from Toyota, which was trying to regroup after World War II, to study the operations at its giant Rouge complex in Dearborn, Michigan.
The visits helped Taichi Ohno develop the Toyota production system, which emphasizes driving out waste, fostering worker involvement and making continuous improvements on the factory floor.
Toyota also came to Ford in the 1980s when it was looking for an American partner with which to open its first plant in the United States.
The two companies held brief discussions that could have led to a joint Ford- Toyota venture to build a version of the midsize Camry for each company. Instead, Toyota entered into a joint venture with GM that recently celebrated its 20th anniversary.
Now, Toyota and Ford may work together again as Ford tries to regroup from a third-quarter loss of $5.8 billion in North America.
Cho, who worked under Ohno and ran Toyota's plant in Georgetown, Kentucky, before becoming its chief executive and subsequently its chairman, is concerned about the financial problems facing Ford, an executive at Toyota said.
"If he can do anything to help them out of this, he would like to," the executive said.
Analysts have said that Ford probably had little to offer Toyota in terms of cash or know-how, though Toyota could be seeking access to Ford's hybrid technology. Rather, they said, Toyota was probably hoping to deflect criticism from Washington as it seeks to overtake GM.
"If it forges a relationship with Ford, Toyota is probably hoping it will be seen as a goodwill move," said Chester Dawson, author of "Lexus: The Relentless Pursuit." He added, "Toyota is wary of inciting trade friction."
James Womack, co-author of "The Machine That Changed The World," which examines Japanese automakers' American plants, said, "Toyota has nothing to gain, either politically or in the market, by letting Ford fail fast."
Toyota, the world leader in hybrid- electric cars, already licenses hybrid technology to Ford, which sells a hybrid version of the Ford Escape, a small sport utility vehicle.
Ford has its own hybrid program, but it cut back on hybrid development this year when it decided to place more emphasis on developing flexible fuel vehicles that can run on gasoline and another type of fuel, like ethanol.
Ford buys parts for its hybrid vehicles from Aisin Seiki, a supplier that is partly owned by Toyota and part of its global network of parts-making companies. Ford and Aisin have had disputes over the number of parts Aisin was willing to make available for Ford vehicles.
Mulally is a student of the Toyota production system and used a form of it on assembly lines at the Boeing, where he was head of the commercial airplanes division before joining Ford in September.
Mulally and Fields flew from the United States to Japan and returned immediately afterward, people with direct knowledge of their trip said Tuesday. During an interview Friday, Mulally gave no hint that he had made the trip, which is a round-trip flight lasting about 24 hours.
The long journey reflects the value Mulally places on Ford's relationship with Toyota, according to a company officer with knowledge of his views. Only a year ago, Bill Ford Jr., then Ford's chief executive, sounded a more competitive note.
"My goal is to fight Toyota and everybody else and come out on top," Ford said during an interview with Time magazine, adding: "I'm not ceding anything to Toyota. They're an excellent company, and they're a terrific competitor, but I look forward to taking them on."
Yet another $.02 worth from a proud owner of a 1970 Mustang Mach 1 @ http://community.webshots.com/album/18644819fHAehGJAjt
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Goes to show you that our Government isnt looking out for the best interest of our country and rather the worlds opinion of us, sigh. Imagine if we impose the same tactics to Japan they do on our products.
Nick

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In the long run protecting our markets through tariffs etc. will do us no good. Our economic model isn't built to work this way. If we penalize imports then the domestic makers will just find a way to exploit it without improving the quality of their vehicles. Then the consumer suffers and the domestics dig themselves a deeper hole to crawl out from. Besides, Toyota is not selling their vehicles for less than Ford's or GM's counterparts. Most cases they are MORE expensive. People buy them anyway.
IMO, the main problem facing Ford and GM is the perception of the public regarding their products. I don't think their vehicles are all that worse, or any worse for that matter, than the Japanese imports. The import companies have run circles around them from a marketing aspect. After the Mustang, what does Ford have to get anyone excited about their lineup? I can't think of any right off hand.
Here's another reason I think Ford has hit a marketing wall... they have abandoned vehicle names like the Taurus, Escort, Thunderbird etc. Now do you think Toyota would decide to kill off the Camry or Celica? Heck no they wouldn't. They understand the effect those long time model names have on selling their cars. Ford just tosses their car names into the garbage every 3-4 years and starts from scratch. IMO, it is beyond stupid to do this and is costing them heavily in market share.
Nicholas Anthony wrote:

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I disagree as there is competition from within that would improve the market. The real reason we slipped was do to OPEC and oil. American manufacturers had to come up with something more fuel efficient, smaller, and better emissions. I dont recall hearing complaints of American cars in the 60's or early 70's. It was only until we were forced to do something we were not familiar with and had to adapt to something the Japanese and many European makers already had been doing.

I agree they need to improve their image or if they try to re-invent it do it in a way that you dont lose your base customers by what you are touching on next paragraph.

Amen! How can you expect loyalty if you keep changing your identity? The Ford Taurus had an awesome reputation and was a top seller. Why get rid of the nameplate when it is doing well? Also if you are going to bring a 4 door car based on the Mustang do us all a favor use it under a Mercury name so they can get some recognition. Perhaps bring back a name like the Cougar that everyone loved. Great alternative if people are sick of seeing so many Mustangs or if they expect a family and need more room.
Nick
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Nicholas Anthony wrote:

The problem is that the domestics aren't making cars that the public wants in their driveways. If the Japanese can make desirable cars then why can't Ford and GM? Protecting their markets will not force them to make better cars. In fact, it will have the opposite effect. There won't be any pressure on them to make better vehicles.
Detroit had no real competition in the 50s, 60s and 70s so how would any of us know to complain? We had only one point of reference... theirs. Now we have a choice and many of us are choosing the imports.

Ford and GM need to concentrate on making good vehicles. Ford has spent too much money buying other brands (Volvo, Aston-Martin, Jaguar etc.) and not nearly enough on vehicle development within the Ford/Lincoln/Mercury moniker. Their are now buying hybrid technology from Toyota! They should be developing their own technology and selling to others.

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GM sell more cars than any import brand, they just do not have the same name on the grill.
mike
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1) You should learn to stop top-posting.
2) You should learn to not compare apples and oranges. You should be saying "Chevy sells more than any import brand" or "GM sells more than any import maker." A company (GM) and brand (Chevy) are not the same thing.
3) How many brands does GM have to use to do this? Lots: Chevy, Pontiac, Caddy, Saab, Hummer, Buick, Saturn and GMC.
4) Who is expected to be the biggest car maker in the world next year? Toyota.
Jeff
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Referencing below. Please dont post a statement from one person and leave my name on it as if I was the person who said it. I know its easy to lose track of who said what but in some circumstances wearing the black eye or taking the credit for someone elses statement can be the least desireable. I do feel that the domestics are making nice cars. Its just that when you are spending so much money you want something with a good reputation and that is something American manufacturers haven't had for some time.
Nick
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That may be your opinion but the fact is in the US both GM and Ford outsell any import. I was buying imports based on what people were saying, as well. I soon learned that the several Lexus I bought were no better than the domestics I had been buying, they just cost me more to buy. I now buy domestics again.
mike

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Thats not my opinion that is my reasoning why foreign cars are doing so well because of reputation which usually takes time to change. Mike can you show me a link to back your statement that GM and Ford outsell imports in the US? Thanks.
Nick

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Mike,
If you look at the new automobile sales market share for the last 30 years, you will see a very disturbing (unless you are a Japanese car manufacture) trend. The imports have been making a constant market share climb at the cost to the last two remaining domestic (Ford & GM) car makers.
Who is selling a few hundred more cars each year is just a footnote in the real story of the growing import dominance of the US new automobile sales market.
If you seriously can't see the disturbing decline of the domestic car makers grip on the US market, you need to open your eyes.
Nobody

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That may be your opinion but the fact is as of today, in the US both GM and Ford, outsell any import. That may change but for now that is the fact, whether you agree or not
mike

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You are confused, again. You remind me of a cousin, back in late forties. He was sure Studebaker outsold Chevy because I owed on , he owned one, and most of the cars he saw were Studebakers. His small town had one dealer, which was just down the street from where he lived, that sold Studebaker and Cadillac ;)
There are twelve month is a year. Total annual sales figures for 2006 have GM, Ford, Toyota, Chrysler in that order
.

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Again I ask what color is the sky in your world? LOL
mike

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AS of today? Or over the last year? Which is it Mike? You can't keep changing your statements, You are arguing two totally different positions.
No matter how you twist it Ford and GM's market share are declining and Toyota's is steadily rising. You changing your argument while trying to dispute that makes you look silly.

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Really, when did I ever dispute the fact Toyota is gaining market share and both GM and Ford are losing in the ever growing US market? Who wins the football game, the team with the most points in a quarter or the one with the most points at the end of the game? For the 2006 model year it is GM, Ford, Toyota, Chrysler. Therefore as I stated GM and Ford, outsell any import. in the US, silly you. ;)
mike

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