Posts tagged ‘global economy’


Ford to stop selling passenger cars in the US and Canada, save for Mustang and Focus Active

26.04.2018


The Ford Focus Active: by the turn of the decade, this will be the only four-door passenger car Ford will sell in the US and Canada

In a surprise move, Ford has announced that it will cease selling passenger cars in the US and Canada by the early 2020s, excepting the Mustang and the Focus Active.
   The announcement was actually for ‘North America’ but as Ford of México does a reasonable trade on Figos and Fiestas, it’s hard to see the policy be uniform right across the continent.
   It’s a cost-cutting exercise, designed to save $25,500 million in five years, and trucks and SUVs simply make more money for them. Small cars mean small profits. In fact, car sales lag those of the F-series, Escape and Explorer in the US. Shares have risen on the news.
   That means Americans and Canadians will say goodbye to the Fiesta, Fusion (the four-door sedan counterpart to the Mondeo) and Taurus, the last of which is already superseded in China. If you liked the cooking RS and STs, then too bad. Lincolns are losing money for Ford, too, so maybe the Continental will vanish—given the Fusion is history, the MKZ will follow. That doesn’t leave much in the Lincoln line-up.
   My initial reaction was that the economies of scale would worsen: if you’re not developing for a global market, will development costs be successfully amortized in the same period? We have, however, seen the Japanese do reasonably well with products strictly for the North American market, e.g. certain Acuras and Hondas that are sold only in their neck of the woods. We also know most of the costs of the car are in the platform and architecture, and Ford has shown decent adaptability, particularly with the C519 Focus (the recently released Mk IV).
   Ford says the cuts will come from sales and marketing, engineering and product development, as well as material costs, manufacturing and IT, in that order, according to Automotive News.
   The fact that product development and engineering rank so highly there is worrying to me.
   They’re bandying the word efficiency about a lot, and that always has me worried. That’s the word you used to hear from corporate raiders like Slater Walker. Things can look efficient while they’re being weakened.
   CEO Jim Hackett says he’s feeding the healthy parts of the business, ‘and deal decisively with the parts that destroy value.’
   While it’s true that the crossover, SUV and truck markets are strong, as they are in many parts of the world, I can’t help but think that Ford isn’t preparing itself for tougher future scenarios.
   Energy crises can come unpredictably, for one. Ford was late to the downsizing game in the 1970s because it saw the dollar signs with big cars. By 1977, GM had stolen a real march on Ford. By the turn of the decade, Chrysler was back from the brink with fuel-efficient cars while Ford sailed into the red.
   Chrysler found itself too truck- and SUV-heavy with the recession of the late 2000s, and its entry-level nameplate Plymouth had already vanished, thanks to mismanagement by Daimler earlier in the century.
   While there’s not always a need for a full line—AMC taught us that extending yourself too far isn’t always wise—I wonder if Ford is leaving itself vulnerable.
   Crossovers like the Escape, which might outsell the Fusion, are being beaten in the market-place by the likes of the Toyota RAV4, so it’s not as though Ford is that strong in all the markets it wishes to remain in.
   GM, having pulled out of Europe and Russia, might be in better shape because of its position in China. Ford trails GM when it comes to its Chinese footprint, although it will remain in Europe.
   Ford’s Jim Farley says the company is looking at new types of vehicles that are spacious, versatile and economical, which hopefully will fill the gap should economic surprises surface. Because you need something cheap to hook buyers and get them to the brand. That’s not going to happen if Focus Active is the smallest car in the line-up.
   Ford is likely to have these on global platforms. But that signals to me a real need to remain strong in R&D. Failing that, Ford is looking to partner up with someone, and it may already have an idea who that is.
   I am speculating here, since I don’t have any figures outlining what proportion of revenue is devoted to that area.
   Nevertheless, this sounds like an appeasement of Wall Street.
   That leaves one concern over nameplates. Ford has successfully introduced nameplates over the years because the product was right: Cortina, Mustang, Escort, Capri, Fiesta and Focus among them. But it has also failed by killing nameplates and replacing them with ones that had no real goodwill, such as Five Hundred and Freestyle.
   Whatever Ford has in mind, I hope for their sake that the new product is compelling, as much as the Mustang and Fiesta were when they appeared on the market. Both emerged in the wake of economic recessions, with Ford innovating because it had to.
   In this century, Alan Mulally’s time at Ford had a measured, sensible approach, where you could understand the future. There are question marks over what Hackett has planned, and usually we have some clue what these new products will be four years out. All I know of is that the Ranger will make it to the US again, boosting truck sales, but that’s hardly an innovation. That’s just filling a market niche with familiar product.
   Will Ford do Brasil come up with something that can be sold in both North and South America? Perhaps the next-generation Ecosport?
   There are lessons in history that shouldn’t be ignored, and Ford has one of the most interesting pasts of any car maker. There is, however, a feeling from the announcement that this heralds a time of retrenchment, as its profits fall globally, and net income in the US rising for the first quarter in part due to a lower tax rate.
   Remember, Isuzu also once thought it was a good idea to stop selling passenger cars and focus on SUVs and trucks. And they’re no longer around in North America.

Tags: , , , , , , , , , , , , , , , , , , , , , , ,
Posted in business, cars, China, globalization, marketing, USA | 1 Comment »


Does TPPA redux protect Big Tech?

25.01.2018


SumOfUs/Creative Commons

Prof Jane Kelsey, in her critique of the still-secret Comprehensive and Progressive Agreement on Trans-Pacific Partnership (formerly the Trans-Pacific Partnership Agreement [TPPA]) notes in The Spinoff:

The most crucial area of the TPPA that has not received enough attention is the novel chapter on electronic commerce—basically, a set of rules that will cement the oligopoly of Big Tech for the indefinite future, allowing them to hold data offshore subject to the privacy and security laws of the country hosting the server, or not to disclose source codes, preventing effective scrutiny of anti-competitive or discriminatory practices. Other rules say offshore service providers don’t need to have a presence inside the country, thus undermining tax, consumer protection and labour laws, and governments can’t require locally established firms to use local content or services.

   If this new government is as digitally illiterate as the previous one, then we are in some serious trouble.
   I’m all for free trade but not at the expense of my own country’s interests, or at the expense of real competition, and the Green Party’s position (I assume in part operating out of caution due to the opaqueness of the negotiations) is understandable.
   Protecting a partly corrupt oligopoly is dangerous territory in a century that will rely more heavily on digital commerce.
   While there may be some valid IP reasons to protect source code, these need to be revealed in legal proceedings if it came to that—and one hopes there are provisions for dispute settlement that can lift the veil. But we don’t really know just how revised those dispute settlement procedures are. Let’s hope that Labour’s earlier stated position on this will hold.
   Google has already found itself in trouble for anticompetitive and discriminatory practices in Europe, and if observations over the last decade count for anything, it’s that they’ll stop at nothing to try it on. Are we giving them a free ride now?
   Despite Prof Kelsey’s concerns, I can accept that parties need not have a presence within a nation or be compelled to use local content or services. But the level of tax avoidance exhibited by Google, Facebook, Apple et al is staggering, and one hopes that our new government won’t bend over quite as easily. (While I realize the US isn’t part of this agreement, remember that big firms have subsidiaries in signatory countries through which they operate, and earlier trade agreements have shown just how they have taken on governments.)
   She claims that the technology minister, the Hon Clare Curran, has no information on the ecommerce chapter’s analysis—and if she doesn’t have it, then what are we signing up to?
   However, Labour’s inability to be transparent—something they criticized the previous government on—is a weak point after a generally favourable start to 2018. The Leader of the Opposition is right to call the government out on this when his comment was sought: basically, they were tough on us when we were in government, so we hope they’ll live up to their own standards. Right now, it doesn’t look like it. I suspect Kelsey is now the National Party fan’s best friend after being vilified for years. Bit like when Nicky Hager (whom one very respected MP in the last Labour government called a right-wing conspiracy theorist) wrote Seeds of Distrust.
   And the solutions that Kelsey proposes are so simple and elegant that it’s daft they weren’t followed, since they are consistent with the Labour brand. I know, trade agreements can stay confidential at this stage and this isn’t unprecedented. But that’s not what Labour said it wanted. At least these suggestions would have shown some consistency with Labour’s previous positions, and given some assurance that it’s in charge.

What should a Labour-led government have done differently? First, it should have commissioned the revised independent economic assessment and health impact analyses it called for in opposition. Second, it should have shown a political backbone, like the Canadian government that also inherited the deal. Canada played hardball and successful demanded side-letters to alter its obligations relating to investment and auto-parts. Not great, but something. New Zealand should have demanded similar side-letters excluding it from ISDS as a pre-requisite for continued participation. Third, it should have sought the suspension of the UPOV 1991 obligation, which has serious Treaty implications, and engaged with Māori to strengthen the Treaty of Waitangi exception, as the Waitangi Tribunal advised. Fourth, it should have withdrawn its agreement to the secrecy pact.

   I once joked that National and Labour were basically the same, plus or minus 10 per cent. On days like this, I wonder if I was right.

Tags: , , , , , , , , , , , , , , , , , , , , , ,
Posted in business, globalization, New Zealand, politics, technology | 1 Comment »


Organizing this planet in the 21st century

03.04.2016

As he has done so many other times since we encountered each other in 2001, Simon Anholt has articulated my thoughts on governance and politics much better than I can through his ventures. I think this puts a very good context on why I ran my mayoral campaigns the way I did, and for that matter, a good deal of my own businesses. The ideas here are in line with what we believe at Medinge Group, too—more on that in an upcoming post. We live in a connected, globalized planet—and the sooner our leaders wake up to this fact, and the positive potential it brings, the better.
   How can we better organize ourselves as seven thousand million people? My belief has been: if we can start at a city level, we can bring about change.

   Head to Simon’s website at good.country to find out more.

Tags: , , , , , , , , , , , , , ,
Posted in culture, globalization, internet, politics, Wellington | No Comments »


Campaign update: videos three to five

22.08.2013

I have been posting these on the videos’ page as they became public, but maybe I should have added them to this blog, too, for those of you following on RSS. The multilingual one seems to have had a lot of hits. They have been directed by Isaac Cleland, with Khadeeja Dean on sound. Lawrance Simpson was DOP on the first one below.


This one was important to me, as I sent in a submission on the local alcohol policy, leaning more in favour of the hospitality industry’s submissions while acknowledging the need to reduce harm.
   Highlights from that submission: ‘The hours feel very limiting as the harm has not come from the opening hours of on-licensed venues, but from pre-loading. Most venues are responsible and safe based on my own custom. A blanket 7 a.m.–­5 a.m. with council officers using their discretion on venues failing to meet the highest standards, then restricting them back to 3 a.m. would be a better approach, while acknowledging the changes at the national level.’
   ‘I remain unsure whether harm will be decreased. I have listened to the police and hospital submissions, and I have great sympathy for them. However, if we know pre-loading and drinking education to be the greatest issues, restricting on-licence hours will not help. If it forces people to drink more at home rather than frequent the city, then that doesn’t actually decrease harm: it makes harm harder to police because it is shifted to the suburbs. It adds to the cost of health services because of travel time and the inability for those harmed to get immediate help.’
   ‘There are some good aspects in its response to the Sale and Supply of Alcohol Act 2012—and it was right for Council to respond. The arguments on density and proximity are a good response to some residents’ concerns.’
   Finally: ‘My belief is that the root cause of a lot of our drinking culture comes from socioeconomic conditions and, especially with the young, a sense of disengagement and a pessimism about their futures. While it is not the purpose of the strategy, it is something that we must address as a city.’


Judging Miromoda for the fourth (I believe) time, this time at Pipitea Marae. It must have been the first time the te Reo portion of my address was longer than the English. I need to disclose that I am not fluent but I try to make a decent stab at it at every opportunity, for the obvious reason that it is the native language of this country.


Another beautifully shot and edited video from Isaac, this one has proved a bit of a hit on Facebook and has almost had as many views as my début 2013 campaign video that was released in April. I decided not to do Swedish—I can speak a little—and Taishanese, since they might be a bit too niche. The idea: if we need someone to push Wellington globally to help our businesses grow—and we accept that the innovative, high-tech and creative ones do—then doesn’t it make sense to not only elect someone with first-hand experience of those sectors, but can open doors readily, too, especially as the global economy shifts east?

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
Posted in business, China, culture, internet, leadership, marketing, New Zealand, politics, technology, Wellington | 1 Comment »