New Routes in the Internet Car Business - ' Ford'

Ford's Tough Breaks

And Ford?

Ford was certainly the champion of customer-facing Internet services, but then none of them worked. None of them provided any particular advantage. I mean, look at all the stuff that Ford invested in. Some of it never came to fruition. CarOrder.com and Trilogy.com and all of that stuff was really more directed at creating systems like build-to-order cars or aimed at siphoning sales leads from dealers, as with FordDirect.com. Ford initially went after some of this with the notion that the dealer was going to become irrelevant or marginalized by the Internet as he went down the pipe, so Ford came up with FordDirect.com to sell cars to customers online, direct from the factory, bypassing dealers entirely. Ford actually talked to me about running the thing, but I told them I didn't think it would work. See, there was this notion running around between Ford and its dealers at the time that, well, FordDirect.com would kind of package a deal. A customer would come online and buy a Ford and then Ford would simply transfer that lead to a Ford dealer who would handle all of it. And this thing would become so rich, important and impressive that it would go public.

I mean, it's functioning, but all it is, really, is a lead-management system. And Covisint, the auto industry's b2b purchasing exchange, was another one of those things that never got off the ground and had at its core the idea that you were going to float an IPO and make a gadrillion dollars.

Is there a role for an intermediary between automakers and suppliers?

Probably there is. I'm not sure that I'm technically equipped to tell you what that role is, but it sure ain't to be an auction owned and run by auto companies.

I think the other place where there is a need for technology is in the area of vehicle design. General Motors, for example, is taking steps out of the vehicle design process by eliminating a prototyping stage, which takes months out of developing a car. They've done a very, very good job of applying technology to the processes of vehicle development, design and engineering. I think Ford has done a reasonable job there. The feeling I think in the industry is that GM is a little ahead.

See, what happens in a company like Ford is that right now they've got so many other things to worry about. They are still contending with these failed Internet projects. There was a lot of money wasted on an Internet strategy that didn't work. For example, Ford had one program that asked customers to register online and become a member of an online owners' group for something like $40 a year. The idea was that Ford was going to pick your car up and wash it, and there were going to be all these little centers around the country where somebody was going to do executive-type things, somebody was going to come out and detail your car. They had all of these things they were doing that were really basically nutty. They had no real world purpose. I mean, it just showed you, frankly, how out of touch Ford was with the real world, how they believed that leaping on this technology was somehow going to transform them in the eyes of the customer.

In your view, then, what are the big lessons that Ford should take away from its failed e-strategy?

Ultimately, it's that no matter how you depict the car or what medium you use to bring the car's message to the consumer, it doesn't matter if the car doesn't live up to the hype, you've got to sell cars that people want to buy. And it doesn't matter how the attractiveness or availability of a car is communicated to potential buyers. That's a lesson for everyone.

In the past two years, Ford has been beating up on their Ford dealers. They have had them do all this customer-service stuff; they have added extra people, repainted showrooms and done all kinds of things to "improve the total customer sales experience." So now you've got greeters at the door and pretty showrooms and leather seats, and you probably have a potted tree someplace. At the end of the day, are they selling any more cars? No. OK, what does that tell you? It tells you that people really don't care whether or not there's a potted palm in the dealership. They care about what they're buying.