Why Ford Will Stop Building Cars | WheelHouse

Why Ford Will Stop Building Cars | WheelHouse


– The Mustang, the Thunderbird,
the Crown Victoria. Since 1903, the Ford Motor Company has been responsible for some
of the most iconic cars ever. But as the world changes
and new trends emerge, Ford has announced the company will stop selling sedans in North America. When I head the news, I was shocked. I asked my coworkers what they thought. But they were speechless, too! So on this episode of Wheel House, we’re gonna find out why. The American Automotive industry has always adapted to the world around it. Cars have helped shape pop
culture, but if you look closer, cars are a product of the
time, and not vice versa. Cultural and socio-economic
events influence car design more than one
single person ever could. It may be cliche, but the Model T changed how the world viewed cars
in the early 20th century. Automobiles were seen as a luxury, and therefore inaccessible
to common people. Rather than court aristocrats, who already owned luxury motor carriages, Henry Ford chose to pursue a demographic that had been neglected,
blue collar working people who didn’t know they needed cars. Not only was the Model T
redefining how cars were sold, it was also revolutionizing
how cars were made. In 1913, Ford introduced
the automated assembly line, which brought production time down from 12 hours, to two and a half. The Model T was probably
the most famous instance in which a car company succeeded by adapting a new business model. (upbeat disco music) Fast forward to 1973,
American cars were gigantic, inefficient, but looked cool as hell. Small Japanese imports
felt wimpy by comparison. The Chrysler Imperial Le Baron was the biggest of the bunch,
clocking in at 19.6 feet. The 439 cubic inch, 7 Liter
V8 cranked out 208 horsepower, and got a whopping 9.8 miles per gallon. Pretty extravagant, but
all the extravagance of the early ’70s was short-lived. OPEC, short for the Organization of the Petroleum Exporting Countries is a group that includes Venezuala, Iran, Iraq, and Saudi Arabia. The organization was
outraged that the U.S. had supported Israel in the Yom Kippur war and proclaimed an oil
embargo against the U.S. The price of gas nearly tripled over the course of the next year. Suddenly, those small,
efficient Japanese imports didn’t look so bad, they had
great MPG and were reliable. That meant that drivers
didn’t have to wait in long lines to fill up on gas. And the Japanese weren’t the only ones giving car manufacturers a headache. The federal government introduced the CAFE regulations in 1975. Cah-fay? Cah-f? C-A-F-E? Cah-fay, is how I’m gonna say it. The Federal government introduced the CAFE regulations in 1975
to improve fuel efficiency in U.S. produced vehicles
and light trucks. This throttled back performance, a pretty important selling point for American vehicles at the time. Gone were the days of the muscle cars, and thus began the era of small, cheap, and efficient commuters. The only American made vehicles comparable to Japanese imports were cars like the AMC Gremlin and Ford Pinto. Notoriously crappy beaters. Cadillac even came out with the Cimmaron, an 88 horse power sports
luxury abomination, that delivered neither luxury nor sport in terms of ride quality. American car manufacturers were destroying their reputation by trying to compete with Japanese sedans,
and they were losing. However, consumers were
finding that they could still get the power and room they expected from U.S. made vehicles by purchasing one of the few vehicle
types which were not subject to CAFE regulations, trucks. (slow instrumental music) U.S. manufacturers like
Ford and Cheverolet focused on making their trucks better, because the market demanded it and they were less
restricted by regulations. As their car division became
less and less relevant, their trucks surged to
the front of the pack. Cut to present day, the F150 is the best-selling
vehicle in America and Ford just hired a
new CEO in Jim Hackett. The previous CEO was laid
off because of stagnant stock prices, rising production costs and so-called uninspired vision when it came to the Ford product line. Historically, Ford has always had rigid leadership and business models. And Hackett’s free-thinking
methods are all but rigid. In addition to quoting
theoretical physicists, Hackett uses words like fitness, Auto 2.0 and design
thinking when explaining the direction he has planned for Ford. But when it comes times
to actually describe what all that means, Hackett
falls a little short. I guess you could say he doesn’t hack it. That was stupid, alright. (laughs) The new CEO might sound more like the head of a new-age start-up rather
than a major car company, but to be fair, he does
have some progressive ideas that could usher in a new era for Ford. Whether that’s good or bad is up to you. Hackett’s vision for
Ford is to transform it from a car company into
a mobility company. His emphasis is to make smart
vehicles for a smart world and focus on developing electric vehicles, self-driving systems and
ride-sharing systems. The company recently
acquired a majority stake in an autonomous vehicle
engineering firm, ArgoAI. They’ve invested in Japanese
tech company SoftBank and rolled out a plan to invest 11 billion dollars in
electric vehicle development, soon to be built in Detroit. I tried looking up what ArgoAi
and SoftBank actually do, but their websites are incredibly vague, yeah they do autonomous
vehicles and technology. With all that expensive
innovation happening, something has to be sacrificed. The sacrificial lambs are the Taurus, the C-MAX and the Fiesta. The Focus line was gonna continue as a weird lifted variant
thing called the Focus Active, but Ford was planning on
building them in China, making them subject to the new tariffs. Tariffs that put a 10% duty tax on top of what it already takes
to import goods from China. So Ford said “Alright, nevermind.” And canceled the Focus Active altogether. This means the Mustang is Ford’s only traditional car left in their line-up for the foreseeable future. Those Pep Boys really
like them burnouts, huh? Hackett and the Board of Directors at Ford saw the competition with Japanese sedans and cross-over SUVs as a losing battle, Americans have been
loyal to Japanese sedans since the ’70s, which is when they started topping best car lists. Plus, Ford sees 90% of sales coming from trucks, SUVs and commercial vehicles, so contextually, as much
as we might not like it, this move makes sense,
it just really sucks to imagine that there might be a day without any Ford cars on the road at all. (melodramatic instrumental music) Thanks for watching Wheel House. We look at the issues that affect you in the car world every week, so hit that yellow subscribe
button right there. We talked about tariffs
on a previous episode, check it out right there. The Director of Marketing at Kia said he learned a lot
from it, so that’s cool. (laughs)