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Focus Active Cancelled!

19K views 79 replies 23 participants last post by  Logans Run 
#1 · (Edited)
Ford announced internally that it has pulled the plug on the US Ford Focus Active due to tariffs. A press release will go out. Development has stopped entirely, there are no plans to assemble Focus locally.

Ford is reassuring employees that Ford is the least vulnerable to continued tariff pressures and that Ford doesn't see a need for economy cars going forward because of SUV electrification.

It's a shame, I thought the Focus Active looked sharp and it's one less vehicle for a company that doesn't have many new vehicles to launch. Obviously this means more customer attrition than predicted.
 
#2 ·
https://www.at.ford.com/en/homepage/...8/8/focus.html


DEARBORN – In light of the negative financial impact of new tariffs on vehicles imported from China, Ford will not be bringing the Focus Active crossover to North America.

Despite the change, Ford remains committed to growing its product lineup – including introducing all-new trucks, utilities, hybrids and fully electric vehicles – and returning operating margins to 10 percent in North America.

Ford’s future North American lineup will better deliver the attributes consumers indicate they value most – including higher ride height, more space, greater versatility and improved fuel economy ratings.

In 2019, the all-new Ford Ranger returns to the midsize truck segment and a new F-Series Super Duty debuts. New performance models are on the way for Ford Edge and Explorer, and off-road SUVs – like the upcoming Ford Bronco – will play a prominent role.

An all-in push on hybrid-electrics will bring new capability and features to customers of high-volume, profitable vehicles like Ford F-150, Mustang, Explorer and Escape.

By 2020, Ford will have replaced more than 75 percent of its current portfolio. By 2023, the company will have more nameplates in the U.S. than it does today.

Five all-new flexible vehicle architectures will help reduce engineering time and development costs, while supporting distinct vehicles and silhouettes for distinct customers. Cross-architecture modules will help further reduce component costs and improve quality and reuse – from sunroofs to steering columns.

In addition, Ford Motor Company continues to employ more U.S. hourly workers and build more vehicles in the United States than any other automaker, plus it is the No. 1 exporter of vehicles from the United States.
 
#7 ·
So is this a "flip of the switch" model if/when tariffs are reduced/go away?
 
#9 · (Edited)
They have stopped development on the Focus Active for the US and reassigned/pocketed those assets. So no, Focus Active is off the books permanently. It's also unlikely that the tariff situation will be resolved to Ford's satisfaction, and they certainly can't invest further with this uncertainty anyway.

It's also probable Ford will have to further cut product plans once NAFTA 2 is finalized since they may have to reduce their Mexican output.

Either way, Ford is facing extremely stiff headwinds and uncertainty, they will have to be very flexible and just ramp up the cost cutting to balance out the tariffs.

There are always solutions out there, I could even see Ford partnering with another Automaker to make products for them, especially economy products. We may just have to move Ford into a more innovative outsourcing model, especially as the market contracts for all automakers and building cars in the US becomes more expensive and new car ownership falls out of reach.
 
#55 ·
They have stopped development on the Focus Active for the US and reassigned/pocketed those assets. So no, Focus Active is off the books permanently. It's also unlikely that the tariff situation will be resolved to Ford's satisfaction, and they certainly can't invest further with this uncertainty anyway.

It's also probable Ford will have to further cut product plans once NAFTA 2 is finalized since they may have to reduce their Mexican output.

Either way, Ford is facing extremely stiff headwinds and uncertainty, they will have to be very flexible and just ramp up the cost-cutting to balance out the tariffs.

There are always solutions out there, I could even see Ford partnering with another Automaker to make products for them, especially economy products. We may just have to move Ford into a more innovative outsourcing model, especially as the market contracts for all automakers and building cars in the US becomes more expensive and new car ownership falls out of reach.

flexibility and Agility have never been a Strength of Ford Motor Company.
 
#11 ·
Hate to say it, but I was right about Hackett.
When I listened to Fields, literally every week in his video blogs to employees, I heard confidence, direction, strategy and complete knowledge of product and it's competition. When I listen to Hackett, I still only hear a bunch of TED talk nonsense, rarely ever bringing up product.
He may not last as long as we think.
 
#16 · (Edited)
Trump’s policy is making very difficult to sell cars (and trucks, utilities,Crossovers, SUVs...) in USA at an affordable (or at least, competitive) prices. He forced to reduce the production and import from Mexico. Put tariffs on the China imports. Is near to put new tariffs on vehicles from Europe. The unique opportunity is to made autos in USA. This will provoque a higher production’s costs for Ford, and vehicles more expensive for the Ford’s customers.

Today, Ford is in a worst shape than yesterday. The demise of the Focus is a hard hit to the automaker’s plan.

If you have Ford’s shares, is time to sell it. Until the new CEO will be announced, the shares will fall even more.



P.S.: seeing how the situation is worsening, the next Hackett’s cut will be the Lincoln entire division and the Mustang. I imagine the investors are pressing him to do this. Other cuts on the table? Close operations in SouthAmerica and Europe.
 
#17 ·
Demise of the unprofitable Focus is not a hard hit to Ford's plan.

I have no problem dropping the Lincoln brand. Lincoln has no purpose after the Town Car died. (Mercury lost its purpose with the death of the Grand Marquis.) The F series is Ford's luxury car.

I predict 10 years now Ford will just have F series and derivatives, Transit, Explorer, Bronco, Ranger, Mustang, and a few electric cars to keep the granolas happy. I predict the Rav4 and CRV will do to Escape what the Camry, Accord, Corolla, and Civic did to the Focus and Fusion.
 
#18 ·
Is not a hit to Ford’s plan? Really? Ford was counting with the Focus Active to have something to offer to those customers that don’t want SUVs/Crossovers (is a hatchback on tilts) and to have something to offer to those customers that want a vehicle cheaper than the Escape but not so little as the EcoSport.

About the Lincoln brand... every automaker needs a luxury brand, because there are the money and profits... will be a big mistake if Ford do it. Anyway, if Hackett continue 6 months more as Ford CEO, Ford will be reduced to a local automaker limited to USA and China.
 
#19 ·
Well this was expected, since the only reason Ford was to offer the 'Active' was to increase the price of a Focus and sell it in the US at a higher margin, but the 25% tax took that away and more...so it was a no go from that point.

Now I will repeat what I have said before. Sedans, hatch backs, 5-doors are not unprofitable, it is just Ford's design and limited production that has made it so for Ford. Other automakers are more successful and more profitable with a focus on shared platforms, higher low/mid price volume, and frequent new models. But Ford tried lower volume(even closing production capacity), attempting to move up market with higher pricing/trim levels and running older models too long, and getting their customer feedback from Europe or China.

Ford's better option would have been to create that 'team' that actually talked to American consumers and make BETTER sedans/hatch models, improve production capacity to costs down and volume up, margins up, with a renew schedule to match the competition.

Even though automakers are now launching more crossovers and SUVs, the tide is already turning with consumers, who are rediscovering the drive-ability and cost(purchase price/maintenance/fuel/insurance) savings of switching back to a sedan since they never needed the 'hauling' capacity of a suv in the first place. SUV/crossover sales will still outpace cars in some segments, but the transition back to sedans is also accelerating, with consumers not buying 'another' big midsize/large SUV expensive when they don't need it. The luxury car automakers understand this, and is why we are getting a several new small/midsize luxury performance sedans, that are near the price point of the consumer brand mid/large suv pricing, but luxury performance and much more fun to drive.

Ford is getting so many warning signs that their current 'plan' is not going to work out well, that a reverse of course as it relates to sedans should be coming any day now. And they may use the cancellation of the 'Active' as a broad excuse to continue sedans in the US.

Ford still has an opportunity to change course. They have done it last minute over and again, just as they are doing now with the 'Active'. Local production is necessary, and just maybe they need to focus more on building automobile manufacturing facilities, instead of more old buildings for office space, for employees they may not need if they keep down the current path.

Just looking at the rest of the automobile industry leaders, and the paths they are choosing with their products and are doing well sales and profit wise, it makes one wonder why Ford thinks they need to try and change the momentum of the entire industry and customer preferences at a time when they need to benefit from that same momentum.
 
#20 ·
Bloggin,
do you think that if Ford reversed it's course of eliminating low to zero margin products, and instead continued forward investing millions to upgrade and attempt to gain some margin......that they would be better off? I am not talking sales volumes, that is easy, and they have been doing that for some time. But rather, increasing margins/profits.

I can't see a bright future in that direction. Not with all the headwinds coming in every direction.
 
#25 ·
That's the distortion....it's ONLY Ford that is talking about sedans, hatchbacks, 5-doors that are 'unprofitable' or zero margin as you mentioned. ONLY Ford. But it is that way for Ford because they did not plan long term for sedan/hatch success in the US, like they do for F-150(high volume, high fleet/commercial sales, economies of scale, higher margin on higher trim levels). Ford needs a long term sedan/hatch/car plan that they did not have, which is why 'cars' crashed and burned for ONLY Ford from a volume/profit/margin perspective. And no....sales volume is not easy when you did not invest early on in production capacity. Again...long term planning.

At this point, I think Ford's best option is to go all in on EV sedans/5-door models. This is the new future of the 'car' especially for commuters, and since Ford is out of the ICE car business in NA. While at the same time Lincoln needs a flagship EV sedan that all other sedans from Lincoln to Ford will trickle down tech from. This gets Ford in a higher volume EV segment on the luxury and consumer side. It's about investing in the future and getting volume up to become profitable, and not sitting back and waiting for the competition to build the EV segment and play catch up.

But clearly the charge more per unit to increase margins at low volume is not a good plan long term. The reality is that there are over 500,000 'car' sales that Ford will be giving up to the competition offering what the consumer is asking for, while Ford is trying to offer an 'image upgrade' at a premium price.
 
#24 ·
Focus Active was never intended as a Crosstrek competitor, it 's just a Focus HB
with slightly higher ride height and plastic wheel arches.


Ecosport and ICE Fusion are the two products Ford will use to fill the gap.
Those are the two easiest product levers to pull.
 
#27 ·
That's not going to work out based on this fact...

"Many Ford owners surveyed said they'll likely buy their next vehicle from one of Ford's rivals. Among Ford sedan owners, half said they would switch to a new or used car from another automaker for their next vehicle. Only 10 percent said they would get a new crossover or SUV from Ford; 5 percent said they'll get a Ford Mustang and 3 percent said they will drive a new Ford pickup."

I know, it's funny how we like surveys that tell us what we want to hear, but want to discount the survey outcome that tell us the opposite. But with half the sedan owners going to the competition for another sedan and just 10% thinking of spending more on an SUV/Crossover...Hackett's plan is falling apart before it even starts.

And again, it is ONLY ONLY ONLY FORD that seems to struggle with profitability with 'cars', and that's an issue Ford needs to fix, instead of sending their car customers to their competition.

GM actually points this out directly..

"As other people are making noise about leaving the car business or thrifting back their portfolio, there's still business to be had there. It's just going about the business in a smart fashion."

Essentially GM is calling Ford management stupid. Ford just need to get smart, and not just quit. Don't drop out of Calculus because your old study plan is not working and your grade is low and you got half a semester left. Get help, learn to think differently, work smarter and pass the class.
 
#31 ·
Regardless of what business you're in, you need to have a variety of products to satisfy as many customers as you can. If you sell only extra large t-shirts, you probably won't be in business very long. The customer will go to the supplier that offers more choices and at price points they like.

Losing any customer to the competition is bad. If they go somewhere else to buy what they couldn't get from Ford, and have a good experience, they won't return. If they decide they don't want cars anymore, they will most likely buy their next vehicle from the same company. Sometimes you need a lost leader to keep customers coming in the door knowing that when they do decide to upgrade to a CUV, SUV, etc, they will most likely stick with you.

Having worked for Ford for 20 years I have shaken my head many times on some of the decisions they have made, but in the end I supported them because I trusted that they knew more than I regarding the business and were making the best decisions for the company. What I don't understand is how only Ford seems to be plagued by the tariffs while the competition seems to be unfazed.
 
#36 ·
And maybe that's part of the problem, Ford lets the models hang around too many years before renewing them, and when they do, the designs are based on input from other markets like Europe and China.....and not NA. Both GM models should be EVs or be replaced by EVs by 2022-2023. Ford will be on their next CEO trying to get themselves back into the car business by then as well.
 
#34 ·
GM may be calling Ford management "stupid" but they have not proved themselves to be much smarter. Yes, Opel became a lost cause due to poor management. Perhaps Ford-of-Europe gained some attention for having the same name as the parent company. This matters to Ford (family) shareholders. Opel had been with GM since before WWII (its assets having been expropriated by the Reich, temporarily thanks to Allied forces) so shame on them for letting their European franchise crumble.

GM may be right about the sedan decision but they're having their own trouble getting their goose out of the pot. That doesn't exonerate Ford for bad decisions made in Dearborn. Perhaps the negativity heard form Ford rank & file comes from the fact that they are consumers. The people making decisions at headquarters are not consumers.

In any OTC business, the consumer is always right.
 
#35 ·
Outside of F Series, very few vehicles at Ford make profit beyond covering
manufacturing and development costs. This becomes apparent when we look
at every other division outside North America. When vehicles form those
ROW locations do not include a lot of high series trims, profit evaporates.
 
#39 ·
"The move will actually make little difference on Ford's profits because the company was expecting to sell fewer than 50,000 of the vehicles in the U.S, anyway"

But looking at the sales expectations, Ford only expected to sell about 5k monthly of the premium priced Focus.
 
#43 · (Edited)
BTW, Here is some insight from a poster at BON. Focus Active may have missed the mark anyway for the reasons I think some of us have openly speculated about. Ultimately it was too expensive for a pseudo SUV without AWD that was obviously a compact hatchback anyway.

I would like to have seen it, but Ford has too many vehicles in that price range anyway.

Ran into someone I used to work with at the company Ford uses for some consumer studies. The tariff was just the final straw for the active in the US, it BOMBED in the consumer clinics. Biggest problems were that the price point was high, (PP was going to be 21k-26k) style didnt work with the sub 40 consumer Ford was targeting, lack of AWD was also a big concern. Being assembled in China actually didnt have much impact in the clinics, though they conducted in coastal cities.

The tariff threat was the final straw, that it wasnt going to sell would have been much worse.
 
#47 · (Edited)
Ford is not that late really, right now only flagship luxury marques are debuting desirable BEVs, which are still very expensive. And none of them are making Teslas and few of them deliver on the range needed. Ford may be the first to have a desirable no-comrpromise crossover BEV that isn't completley out of reach for its customers. Ford is also electrifying just about everything they have, adding EV torque alongside gas in every conceivable engine from I4 to V8 + FWD, RWD, and AWD. I don't see anybody even close to doing this. I don't know how many times I have to keep touting this, it's going to be transformative...even if it isn't that flashy. If you love electrification, there is no company making a bigger commitment to putting the tech into more hands than Ford. Chevy managed to create a bunch of EV non starters, repeatedly. They are fascinating early adopter examples, but nobody wants them because they aren't the right products. I honestly respect Ford's careful scheming here, everything is timed to new technologies and products that required a corporate-wide justification for investment. All of the pieces needed to align to make this technology scale. When it's this important, Ford usually waits to get it right and nobody looks back.

As for GM's experience...it's not the right experience and they wasted money in the process. Even now that Ford has largely gone on EV hiatus, they sold more Hybrids than anybody besides Toyota.

I do believe GM will get the BEV story right fairly quickly once the industry norms become clear, but they are not even remotely close to Ford's vast Hybrid strategy.

I think for me as a potential BEV customer, I will still likely chose Tesla over Ford because of the Supercharger network. Ford and others are still a long way from that type of infrastructure and they know it which is something they have to sort out. Which is why Ford is smart to make performance Hybrids a big part of their strategy while they solve the barriers for BEV customers.
 
#48 ·
This reminds me of what happened about 15 years ago here in Australia.



Ford designed the Territory as an alternative, large SUV, to the plethora of 4WDs available. Cost was around $600m. It was an instant winner and remained so til the demise of all production in 2016.

At that time GM Holden decided to do the same with it's Holden Commodore wagon and called it the Adventra after they basically did a "Focus Active" on it at a cost of $265m. They added cladding, raised it and included AWD. It failed within a few years.
 
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