Just a few years after a brave experiment to invigorate the ailing Lincoln and Mercury brands with a dose of the foreign brand mania of California, most of the executives are returning to Dearborn. The only obvious beneficiaries of the cross-country round trip are the relocation companies who handled the moves. Neither Lincoln nor Mercury have seen any improvement in their absolute or relative performance, especially in sedans, which are the most important near luxury and luxury models.
The idea of consolidating all of Ford’s domestic and foreign premium brands into one very costly new office building in Irvine, Calif., is just another failed initiative that missed the point entirely. Moving Jaguar, Volvo and Land Rover into the same building has also produced little benefit to any of the brands. At the same time, the relocation separated the European brand executives by at least eight time zones from engineering and production facilities.
No one denies that California remains the hotbed of vehicle trends, where foreign brands account for more than 50 percent of the market. Remaining in tune with the consumers in this car-dependent state has been the hallmark for success among Asian and German car companies. The arrogance of the Big Three toward the California marketplace in the ‘70s and ‘80s made it easy for foreign conquest on the west coast. But it isn’t obvious that establishing headquarters offices in California was the answer. Paying attention to what customers want has separated winners and losers in California and throughout the country. Not all Japanese carmakers are powerhouses despite being located in California. Mazda continues to lag behind Toyota and Honda as do Suzuki, Mitsubishi and Isuzu.
BMW remains a solidly German company with a North American headquarters in New Jersey, yet it has successfully expanded its customer base with two passenger sports cars, the X5 crossover, the new high tech 7-series and now the sold-out Mini. California is crucial to its success but it hasn’t had to house them in Orange County to appreciate the needs of these consumers.
Wolfsburg, Germany, is geographically and culturally about as far removed from the sun-bathed beaches of southern California as you can get. Nevertheless, VW has staged an impressive comeback despite having its Michigan headquarters within shouting distance of the Big Three. Less than a decade ago, one wondered if VW would remain in the U.S. because its model line-up was out of touch with the marketplace. Once it fixed the cars, sales rebounded.
The relocation of Lincoln and Mercury to California may have opened management’s eyes to the fact that the brands had little presence on the freeways. But the shock of being irrelevant in the country’s largest marketplace should have resulted in the only thing that mattered — new and better models. But that hasn’t happened. Lincoln has not figured out how to produce an attractive luxury sedan for the private market and Mercury seems relegated to assembling slightly modified Ford models instead of striking its own identity. The only thing that matters to California consumers is the car. That’s the only thing that matters to shoppers anywhere in the United States. The domestic auto industry has done enough damage to itself with superficial nonsense such as Ford’s California Odyssey. It’s time to stop wasting money on things that don’t matter and spend the money where it counts.
Windecker
