Pierce Brosnan
Adrian Dennis  /  AFP - Getty Images
British actor and former James Bond Pierce Brosnan poses on an Aston Martin at Pinewood Studios in London. Ford said Thursday it is looking to sell the prestigious sports car nameplate.
By Roland Jones Business news editor
updated 9/1/2006 3:37:10 PM ET 2006-09-01T19:37:10

It’s not a day Agent 007 would like to have seen. Ford said Thursday it is looking at the future of the Aston Martin brand and may sell it off. The prestigious British sports car maker was immortalized by the fictional superspy James Bond, who famously drove the Aston Martin DB5 as he battled evil megalomaniacs in “Goldfinger,” “Thunderball” and “Tomorrow Never Dies.”

News of the storied British brand’s possible sale is just one of many developments creating a buzz around Ford, the nation's oldest and second-biggest car company. Ford has rarely been out of the headlines lately as it focuses on its turnaround plans, with reports swirling that the company is considering going private, or possibly angling for a role in the Renault-Nissan alliance led by industry guru Carlos Ghosn.

A significant development came last week when Citigroup executive and former Treasury Secretary Robert E. Rubin said he is leaving Ford’s board, citing potential conflicts of interest with his employer. The news raised the prospect that the struggling automaker is preparing to do a deal that involves the giant banking company, perhaps including the sale of its consumer finance unit, Ford Motor Credit.

Big changes do appear to be coming down the highway. To deal with mounting losses and a dwindling U.S. market share, Ford has said it plans to cut U.S. auto production by 21 percent this year and is expected to announce more changes soon that would go beyond those detailed in its “Way Forward” recovery plan, delivered in January. Those plans called for the closure of 14 plants and 30,000 job cuts by 2012.

But larger issues remain for Ford, critics of the company say. These include whether the company should take itself private and whether it should sell or close ailing brands like Jaguar and Lincoln Mercury. The company also is suffering from an exodus of top executives and managers as well as tumbling sales of bread-and-butter vehicles like the F-Series pickup truck.

“Ford is good at cutting costs, but it’s not very good at selling product, and that’s what brings in the money,” said Rebecca Lindland, an automotive analyst at consultancy Global Insight.

“The company needs to get people into their showrooms," she said. "The baby boomers are the ones who rode Nissan, Toyota and Honda to where they are today, and there are lots of them who have never darkened the door of a domestic automaker’s showroom. That is why we don’t anticipate many big changes for the domestic automakers like Ford for decades. Baby boomers are in their peak buying years.”

Changes at Ford should be drastic ones, said Daniel Gorrell a vice president at research and consulting firm Strategic Vision in San Diego.

“[Ford is] caught up the general malaise of domestic automobile industry,” said Gorrell. “It’s under siege [from Asian automakers], and it hasn’t really demonstrated an ability to get over its problems. The business environment is very difficult for them now, and their mix of products no longer reflects what consumers are looking for.”

The North American automotive industry is certainly facing some formidable challenges, including the prospect of a slower U.S. economy, high fuel prices and rising costs for raw materials like steel and aluminum. The Big Three U.S. automakers also are facing the challenge of high health care and pension costs as well as potentially thorny union contract negotiations.

“These situations are not necessarily new, but all the planets have aligned over the last quarter or two, so that every U.S. automakers is looking at their own plans to right-size their business and their liabilities in the future,” said Michael Robinet, an automotive analyst at CSM Worldwide.

Ford is also struggling with its own unique set of problems. One is that sales of its highly profitable line of pickup trucks are tumbling amid persistently high gasoline prices. In August sales of the the F-Series pickup truck — long the country’s best-selling vehicle — fell 15 percent from the year before. Overall truck sales were down 21 percent for the month.

Another problem for Ford is an exodus of top managers, notes Gorrell. Senior managers and executives are looking to leave the company, if not the industry, according to a recent report in The Wall Street Journal, which cited industry recruiters.

Leadership also may be a problem Ford is trying to address. News that Ford President and CEO Bill Ford has approached Nissan-Renault chief Carlos Ghosn about joining their global alliance if a proposed deal with General Motors falls through suggests the company is seeking an infusion of strong leadership.

“Demand has fallen away from their usual moneymakers — large trucks. All the investment they put in that area didn’t pay off, and now they are in a pinch,” Gorrell said. “And now it could be suggested that Ford doesn’t have a strong leader at the helm. Maybe Ford is looking for an outsider who can come in and make the tough calls — a hired gun may be absolutely necessary.”

A partnership between the Renault-Nissan alliance and Ford would make more sense and deliver more synergy benefits than a Renault-Nissan tie-up with GM, according to some analysts.

“A deal with Ford would make far more sense than one with General Motors,” said Patrice Solaro, a Kepler Equities analyst. “Not only are the synergies between Ford and Nissan on the North American market larger, but in Europe a deal with Ford would also generate more opportunities than with GM.”

Rod Lache, an analyst at Deutsche Bank, also said a deal with Ford would create more value.

“We believe Ford’s purchasing is relatively inefficient — an area where Renault-Nissan has substantial expertise. There could also be benefits should investment-grade partners get involved in co-ownership of the Ford Credit business,” he added.

Rebecca Lindland at Global Insight believes good product will be the key driver of Ford’s success in the future. Current offerings have become “over focus-grouped.” A classic example is the Ford 500, she said. “Any offending characteristic was smoothed out to the point where all you got was vanilla.”

What Ford needs now is a design focus and a personality, Lindland added.

“One of the things we are so concerned about at Ford is the design direction. Where is it going, and who is leading the charge? What is a Ford car? The company needs to get some kind of theme, or personality. Chrysler was able to do it with the 300 and Ford had it with the Mustang and the F-Series, but they have stumbled badly since then, and people don’t know what a Ford car stands for,” she said.

The Associated Press and Reuters contributed to this report.


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