Howes: Ford’s likely Ranger play signals truck rethink
Ford Motor Co.’s probable return of the Ranger pickup to North America would be more than a victory for the United Auto Workers members charged with building it at Michigan Assembly in Wayne.
It’s tacit admission that the Blue Oval’s most defining product — the best-selling F-Series trucks — cannot be all things to all truck people. Not in an automotive world driven as much by onerous federal fuel-economy standards as changing consumer tastes and the creeping upscale-ism of the once-pedestrian pickup.
Assuming plans to revive the Ranger (and perhaps a new version of the Bronco sport-ute) survive UAW-Ford national contract talks, the move would stand as a reversal of strategy that separated Ford from rivals General Motors Co. and Toyota Motor Corp. — both of which field full-size and compact models in the pickup space.
Ford blinked. Caught between growing fuel-economy pressures and increasing segmentation of the truck and SUV markets, the Dearborn automaker is preparing to replace slower-selling compact Focuses and even slower-selling compact hybrids at Michigan Assembly with models that should deliver fatter profits and higher volumes.
Moreover, expanding Ford’s pickup and SUV portfolio would mirror a segmentation trend unspooling across the industry, namely that automakers seldom can afford to cede entire segments to competitors in either the premium or the mass-market spaces.
The curious part is not that CEO Mark Fields and his team are poised to make the move. It’s that they, or their people, opted to confirm plans to end production of Focus and the hybrids at Michigan Assembly amid national contract talks with the union.
Enter the “M” word — Mexico — a perennial flashpoint with UAW members who understandably recoil at implied threats during contract talks. That’s especially true when the signals suggest off-shoring production without a clear idea of what, if anything, comes next back home.
In the UAW orbit, Ford’s move created a problem where one didn’t need to exist; heightened tensions in a bellwether plant whose workforce approved a competitive local contract to land Focus production; and pretty much guaranteed that a national contract could not be ratified without official confirmation first of what comes next for Michigan Assembly.
Without that, no deal. Unless, of course, the saga is being manufactured largely to inject drama into a process that now is more about professional give, take and consultation than the public grandstanding and bare-knuckled confrontation of old.
In national contract talks, union leaders have two over-arching goals: first, to present a contract that can be defended and considered good (in the context of the times) by the members. And, second, to deliver a deal the automakers can trust will be ratified — even if that requires creating a crisis whose resolution helps secure ratification.
Wouldn’t be the first time. The UAW’s national bargaining with Detroit’s automakers never is just about economics and who builds what where. They’re more comprehensive than that, a quadrennial rite composed of equal parts politics, theater and bottom-line economics.
The Michigan Assembly saga is all three. The suitability of the Wayne plant building the Focus and slow-selling hybrids has been suspect for some time, compounded by the fact that Ford’s truck lineup arguably could benefit from diversification at a time of comparatively low fuel prices and growing demand in the States for pickups and SUVs.
Meaning this decision is a longer-time coming, the result of a strategic reappraisal that addresses gaps in the Blue Oval lineup and attempts to place higher-margin, higher-volume products in a more costly UAW plant (costlier, that is, than a plant in Mexico).
Alternatively, discussions with UAW officials and close reading of their public statements suggest they have known for some time of the coming product shift, as well as the potential replacement combination under consideration by Ford.
How? Because UAW President Dennis Williams, his staff and the union’s vice presidents routinely study the manufacturing footprints of all three automakers in an attempt to understand which products may be in danger and how their production could be back-filled.
They also use economic modeling to test the credibility of their contract proposals and to vet those tabled by the automakers, an outgrowth of Williams’ time as a director of Navistar International Corp. that distinguishes his tenure from his predecessors.
It’s union leaders’ job to know this stuff long before their members or the media do. It’s also their job to manage the damage when portfolio allocation decisions morph from the normal course of business to a bargaining flashpoint potentially imperiling ratification.
Ford’s Michigan Assembly quandary is not the only one. How Fiat Chrysler Automobiles NV proposes to address, finally, the future of Jeep Wrangler production in Toledo and whether GM will try to import Chinese-built Buick compact SUVs loom, too.
In each case, public resolution would help ratification — or imperil it, sparking a confrontation neither side can afford nor should seek.
Daniel.Howes@detroitnews.com
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Daniel Howes’ column runs Tuesdays, Thursdays and Fridays and can be found at http://detroitnews.com/staff/27151.