DU members from Detroit area.

[Blue_true]

Any insight on Ford's decision to exit car manufacturing (as I understand the company's announcement)? Ford will make a crossover, but that market is already saturated with established players that have been doing crossovers for years.

Ford will essentially become a truck and SUV manufacturing company, if I understand the announcement right. What are your thoughts? I guess that works if gas prices don't skyrocket and if Fordsucceeds in it's goal of making more hybrid trucks and totally electric trucks.

Any ideas on what Ford's announcement will do to auto industry employment around Detroit?

[MichMan]

1. They are responding to customer preferences

One statement of yours surprised me. Ford is one of the established crossover manufacturers; they are not new to that segment.

A crossover is a SUV type body style built on a car platform instead of a truck platform. One thing to keep in mind is that many of the small crossovers have similar MPG ratings as the cars they are based on. So much of the criticism here on DU over this decision assumes that all Crossovers and SUV are large full size trucks and that just isn't true.

Crossovers, SUV and Trucks are around 70% of sales industry wide. Many industry experts are predicting that will keep growing. Consumers just aren't very interested in buying sedans these days. The key take away to me is that they are responding to customer preference in body styles from sedans to crossovers. This happens all the time; 20 years ago Minivans were the hottest segment and fell out of favor. Take the concept of a minivan, change the body to look like an SUV and voila, you have a crossover.

People involved in the industry understand the massive expense of running assembly plants to partial capacity. If a particular vehicle isn't selling, it costs a tremendous amount of money to have the assembly plant that builds it only running one shift or being idled for weeks at a time. If customers were lined up buying small fuel efficieent cars they would keep building as many as they could. Doesn't make any sense to continue to crank out vehicles that customers aren't interested in buying.

[GeorgeGist]

2. We used to call crossovers ...

station wagons.

[Blue_true]

3. Thanks for the local perspective.

Where I live Ford doesn't seem to have crossovers, I see lots of them from other manufacturers.

One constant concern that I have is car sales fluctuate with gas prices. Trucks and SUVs were big in the nineties, I think, then gas prices skyrocketed and their sales fell through the floor. How will Ford survive such a cycle, try to dominate crossovers? Drastically drop prices on what it does sell?

Lastly, how will Ford's move affect local employment?

[MichMan]

4. Crossovers are based on cars with different styling

True, if fuel prices go up substantially, the sales of the larger trucks and SUV would drop, however the sales of smaller car based crossovers would increase.

I'm not clear what the people criticizing this decision expect Ford to do? Continue cranking out sedans that customers aren't interested in buying to fill up lots with unsold cars, or to produce what their customer prefer to buy?

I think part of the problem is one of perception by people not paying atttention to the industry. Just because a vehicle looks like an SUV, doesn't mean it automatically gets terrible mileage. The crossovers are built on the same platforms as the cars they are based on , provide similar mileage, but just have different styling. The family car evolved from the Station wagon into the Minivan and now to the Crossover.

Perfect example is the 2018 Ford Edge with very similar mileage to the 2018 Ford Fusion or the 2018 EcoSport with a 1.0 litre turbocharged 4 cylinder


https://www.ford.com/suvs-crossovers/ecosport/?fmccmp=lp-suvs-mid-hp-ecosport

Very little to no effect on Michigan employment. While there are some assembly plants in Michigan, most of the employees working directly for the Big 3 work in R & D, Engineering, Sales & Marketing and Administrative functions. There are a significant number of parts suppliers throughout the state with many more employees than work for the car companies.