Ford sales still fall short of goals
The document, titled "Report Card: North America May 2007" and obtained by The Detroit News, shows that, in the first quarter of the year, 60 percent of Ford employees were "looking forward to the future as Ford employees." That was up four percentage points from the company's last quarterly survey of employee morale.
However, the poll found that less than 45 percent of Ford workers believe the automaker's "Way Forward" turnaround plan will succeed. Ford's poor performance on the retail sales front suggests their concerns may be justified.
According to the document, Ford's April retail market share in the United States dropped to just 9.7 percent -- nearly a full percentage point lower than the company had projected and far from its full-year goal of 10.5 percent to 11 percent. Ford blamed the decline on "the weak housing market and higher fuel prices." Truck and sport utility vehicle sales were particularly hard-hit.
Those numbers aren't likely to reverse anytime soon, said Jesse Toprak, chief economist for Edmunds.com. Edmunds, which uses information on consumer demand, sales forecasts and future product plans to predict automaker market share, sees Ford continuing to slide in the near future because it remains too reliant on the cooling segments of large trucks and sport utility vehicles.
"At least they're realizing they cannot keep going blindly after market share," Toprak said. "Their overall strategy of how to approach the U.S. market has to change. You can make money with less market share."
Ford has managed to keep its share of the retail market relatively stable, company spokesman Jim Cain said. Ford also has moved to create a portfolio that offers as many cars and crossovers as trucks and large SUVs -- a move that should help make the automaker less vulnerable to gas and housing issues.
"We have launched a raft of new fuel-efficient products," Cain said. "It takes time to turn a ship."
Also according to the report card, Ford missed its material cost reduction target for the month.
"Material cost reductions through April were 5 percent below forecast," the report card states, blaming the shortfall on ongoing weakness among Ford suppliers. "Some negotiations have been extended due to continued distress in the supply base."
On the plus side, Ford said it continues to make progress on selling off the former Visteon Corp. facilities it took back as part of a 2005 bailout of its former parts subsidiary. Ford lost $12.6 billion last year.
The Dearborn automaker is in the midst of a sweeping restructuring plan that aims to restore the automaker to profitability by 2009. Successful new products and a focused recovery plan are boosting employee morale, Ford spokesman Oscar Suris said.
"The trend will continue," he said, "if we keep doing our jobs."