September 18, 2012 / 7:58 PM / in 6 years

Ford execs tout Fusion; Mulally stays mum on succession

NEW YORK/DETROIT (Reuters) - Ford Motor Co (F.N) dispatched its top brass, including Chief Executive Alan Mulally, to major U.S. cities on Tuesday to promote the 2013 Fusion, its redesigned family sedan that takes aim at Toyota Motor Corp’s (7203.T) Camry.

Alan Mulally, President and CEO of Ford Motor Company attends a launch event for the New 2013 Ford Fusion Hybrid car in New York's Times Square, September 18, 2012. REUTERS/Mike Segar

The second-largest U.S. automaker began shipping the Fusion, which boasts a more athletic design and more fuel economy options, to dealers last week. Ford hopes the third-generation Fusion, coupled with the new Escape crossover launched this spring, will boost its U.S. market share.

The media blitz comes as Ford’s board of directors develops a succession plan for Mulally, 67. Ford is also cutting costs in Europe, where it expects to lose more than $1 billion this year. Ford’s sales in Europe fell 29 percent in August, while overall industry sales dropped 8.5 percent.

“There is a tremendous decrease in demand, but we’re absolutely committed to Europe,” Mulally said at a Fusion event in New York. “That will involve some restructuring.”

The board is looking to name Mark Fields, Ford’s head of North and South America, chief operating officer, a sign that he could be the heir apparent to Mulally, a source told Reuters last week.

But on Tuesday, Mulally kept a lid on the finer details of Ford’s plans for Europe and his own plans for retirement. He said Ford has a strong internal bench of potential leaders and he was “pleased to continue to serve as CEO of Ford.”

“Please don’t vote me off,” he joked to reporters.

Under Mulally’s “One Ford” plan, Ford is moving toward building more cars using fewer platforms, a move that cuts costs but allows Ford to offer more features at a lower price.

The Fusion is the latest Ford car to receive a global overhaul, after the Fiesta subcompact and Focus compact car. The Fusion will be sold as the Mondeo in Europe and China. These models share about 75 percent of the same parts.

The Fusion competes in the midsize sedan segment of the U.S. auto market, dominated by the Toyota Camry and Honda Motor Co’s (7267.T) Accord. Through August, sales in this bread-and-butter segment have risen 26 percent, while overall auto sales are up 15 percent, Ford said.

“This is a transitional vehicle for our company,” J Mays, Ford’s chief creative officer, said Monday night at an event in Miami Beach. He compared its impact to the 1955 Thunderbird, the 1962 Lincoln Continental or the 1964 Mustang.

The base model of the revamped Fusion will cost $21,000, the same as the base price of the outgoing Fusion, Mays said.


Ford is offering three gasoline-powered versions of the Fusion as well as a hybrid and a plug-in hybrid. In a press release, Ford said the Fusion hybrid gets 47 miles per gallon on the highway and in the city, beating out the Camry hybrid.

At the New York event with American Idol host Ryan Seacrest, Mulally held a sign touting the “47” figure. Ford also passed out T-shirts with the Fusion hybrid’s fuel economy figures.

Boosting fuel efficiency has been a pillar of Ford’s vehicle strategy for the past six years. Ford is vying beat Toyota’s record on fuel economy with new electrified models this year.

Ford must also meet federal government’s corporate average fuel economy (CAFE) target of 54.5 mpg by 2025. This translates to 36 mpg or higher in real world driving, analysts say.

The average fuel economy of Ford’s cars and trucks for model year 2011 was 21.3 mpg, up from 18 mpg in 2006, U.S. government data shows. The industry average for 2011 was 22.8 mpg.

To meet these ambitious standards, Ford is counting on turbocharged engines, start-stop systems, hybrid technology “and something we haven’t invented yet,” said Raj Nair, Ford’s head of product development, at an event near Detroit.

Ford plans to cut weight from future models by using lightweight materials. Ford is also designing and making key electric-drive components in-house to cut costs and accelerate development of these technologies.

Buyers of the 1.6-liter Fusion with a turbocharged engine can purchase the $295 auto start-stop system, which shuts the engine off when the car is stopped at a light. Ford is looking to provide this option in a larger number of its vehicles.

The Fusion also offers a lane-keeping system that alerts a driver if the car drifts into another lane. The Fusion can also parallel park itself, with the active park assist feature.

“That’s been a key point in our turnaround and our success, we’ve really pushed on being a technology leader and making sure we bring those technologies to the mainstream,” Nair said.

Reporting by Ernest Scheyder in New York and Deepa Seetharaman in Detroit; Additional reporting by David Adams in Miami Beach; Editing by Matthew Lewis and Tim Dobbyn

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