Delivering a product that's relevant Can you imagine no more Ford Explorer SUVs being built? How about no more Ford minivans? That's like not growing any more impatiens or poinsettias. These are some of the drastic steps Ford officials are considering to bring the company back into profitability by 2008. At its peak, the Explorer accounted for one-third of the company's profits during the fourth quarter of 1999. Last year's sales of the Explorer were down nearly 30 percent from 2004. The situation wasn't any better for Ford's minivans, with 2005 sales of the Ford Freestar, formerly known as the Windstar, down 25 percent, and sales of the Mercury Monterey off by 53 percent. To stop the bleeding, the company plans to shut down seven assembly plants and seven manufacturing facilities along with eliminating 25,000-30,000 jobs. The closure of these operations will eliminate 1.2 million vehicles from Ford's North American production. Would growers be willing to shut down production facilities if they weren't making money on a particular crop? Or would they add more production space and try to make up the difference with more volume? In addition to dropping its minivan line, Ford is expected to end production of its large sedans (Crown Victoria, Grand Marquis and Lincoln Town Car) along with its small Focus car. Are some growers reluctant to change varieties or crops because they're comfortable with what they have been producing for years? In addition to closing plants, slashing jobs and dropping car models, Ford is looking to cut raw material costs at least $6 billion by 2012, reduce development time for new models by six to 12 months, and increase use of flexible manufacturing including building more domestic vehicles from hardware already in production overseas. Are growers looking for cooperative opportunities to purchase supplies and lower input costs for fuel, containers, growing media, etc.? General Motors, the largest U.S. auto manufacturer, is in the same boat as Ford. GM chairman and CEO Rick Wagoner said 2005 was one of most difficult in the company's history. GM posted a $8.6 billion loss for 2005, with most of the losses coming from its North American division. It's the worst loss for the company since 1992. What was surprising was that the company sold 9.2 million vehicles worldwide, the second largest volume in GM's history. Although sales were up in foreign markets (Asia, Latin America, Africa and the Middle East), North American sales declined by 3.1 percent. The top priority for GM's management team is to turn around its North American business. Wagoner said the two fundamental weaknesses in its North American operations were a huge legacy cost burden and the inability to adjust structural costs in line with falling revenue. GM expects to reduce its North American structural costs by $6 billion by the end of 2006 and to reduce its net material costs by $1 billion. Making flowers relevant President Bush, in an interview with The Wall Street Journal, didn't have many encouraging words for the two struggling automakers. When asked whether the government should take any pre-emptive action to assist the companies, Bush said it was "very important for the market to function." He said Ford and GM have to be able to compete with other companies that are dealing with costs in different ways. He also said the two companies need to come up with products that are relevant. Do you think this statement could apply to the floral industry, too? GM is aggressive in its efforts to deliver what it thinks American consumers want. It will roll out 16 models in 2006. The floral industry has a similar task in this increasingly competitive world. How do we show consumers that flowers are relevant to their increasingly hectic lives? ABC News reported that if American carmakers are going to regain dominance of the U.S. market, the first thing they need to do is design vehicles that change the way Americans feel about American cars. We have a similar task in terms of changing consumers' attitudes about flowers and the way they can make people feel. Send this article to a friend Enter your e-mail address: Enter your friend's e-mail address: Click the image below to send: © 2006 Branch-Smith Publishing