Ford Says It’s Ready to Make a Big Marque in California
Ford Motor Co.’s recent groundbreaking decision to move its Lincoln Mercury division headquarters to Southern California was the first in a series of “tactical moves” that should lead to a greatly increased Ford presence in the state, a top company official said Tuesday.
“If the move of Lincoln Mercury were the only step we had in mind, I’m not sure it would have made much sense,” said Jacques Nasser, the Ford division’s aggressive president. “It’s going to be an ongoing process for us to take a much stronger position in California.”
Ford won’t be moving its corporate headquarters to Los Angeles, but Nasser’s remarks during a meeting here signal that the company is serious about removing its Midwestern blinders and looking at opportunities in the rest of the world, industry analysts said.
“California is a wonderful laboratory for testing new products, ideas, designs and marketing approaches,” said Dave Nathason, head of automotive operations for Coopers & Lybrand Consulting in Detroit, a company that works closely with Ford.
Nasser declined to offer specifics. But Ford already has said it will build a major design studio next to the Lincoln Mercury headquarters planned for Irvine. Its Jaguar and Aston Martin luxury performance car subsidiaries are launching their flagship, high-tech dealership in Mission Viejo later this year. And the U.S. operations of two Asian auto makers Ford partly owns--Japan’s Mazda Motor Corp. and South Korea’s Kia Motors Corp.--are located in Irvine.
“Ford would also like to have a base of operations [in California] halfway between the Heartland and Asia,” said George Magliano, chief auto industry consultant for WEFA Group, a New York economic consulting firm.
Nasser’s remarks wrapped up an unusual three-day Southern California visit by almost two dozen of Ford’s top managers. He said the Ford Automotive Operations group was “learning California” through its marathon of meetings with dealers, consumers and suppliers.
Several dealers who attended closed meetings with Nasser and other executives said they believe Ford is serious about boosting its operations in California. “Lincoln Mercury is just a beachhead,” said Jim Graham, owner of Rancho Santa Margarita Ford.
As the largest and most ethnically and economically diverse automobile market in the country, California is critical to Ford’s future, said Mark Spizzirri, owner of Board Ford in Whittier and Family Ford in Montebello.
Indeed, California’s large minority population will be the national norm in 50 years, and Ford likely sees California as a testing ground for products that will appeal to minority buyers, said Wesley Brown, an industry consultant with Nextrend in Thousand Oaks.
Nasser and other Ford executives confirmed previous reports that a Lincoln Mercury design studio will be part of the division’s new headquarters. The 75,000-square-foot studio would replace Ford’s Southern California design center in Valencia and employ about 50 designers and engineers.
The Lincoln Mercury offices and studio are to be built over the next 18 months on 11 acres in the Irvine Spectrum adjacent to Mazda’s U.S. headquarters.
Bob Transou, chief of Ford’s manufacturing operations, suggested that one Ford operation that would benefit from a California location would be a “development garage” within the design studio.
The state’s varied terrain and climate make it an ideal place to test vehicles.
In a brief meeting Tuesday in Newport Beach before heading back to Michigan, Nasser said the Ford team found that the company “is less well-known in California than we’d like to be.”
He said he wants to take advantage of “valuable synergies” between the automotive and high-tech industries as well as the state’s “diversity, knowledge and people.”
Like other domestic car makers, Ford has seen overall sales stagnate in recent years, but it has boosted profits by pushing development of the light trucks--especially sport-utility vehicles--that are selling faster than passenger cars.
The market isn’t likely to change soon, economists say, so Ford and other car makers need to keep pushing the design and development of niche market products to keep their profits on the rise.
“That is the major point of moving some of your operations to California,” said William T. Wilson, an economist with Comerica Bank in Detroit. “It is more likely that, with a Western influence, you can design the cars and trucks that will lead the market in the future.”
