The car industry's financial performance is about as predictable as David Beckham's hairstyles and makes the Irish economy look as stable as a Rolls-Royce on a newly surfaced motorway. For instance, a few years after announcing multi-million dollar profits, and after a century as a bulwark of corporate America, General Motors went bankrupt and was nationalised. This didn't so much shock, as stupefy.
GM is now back in private hands, after the world's largest IPO, and — boom following bust — is delivering heady profits again. But its salvation is coming partly from booming sales in newly affluent communist China. Who would have predicted that?
Equally, Ford went so close to insolvency that its market capitalisation shrank from $71bn (1998) to $2.9bn (late 2008). Yet near-bankrupt Ford was the red-hot US stock of 2009 and 2010, as shares jumped from just over $1 to $15.
Just as unforeseeable, the models that are likely to give the future sales fillip to US-based Ford are European inspired 'global cars'. All this in a US auto market where sales stars have traditionally been XL-sized SUVs and pick-ups. Russia, where Ford recently announced a $1.4bn joint venture, is a major growth market.
But while communist and socialist nations may be unlikely saviours of corporate America, Middle America still regards state-run industry with McCarthyite misgivings. "Ford benefited from GM's nationalisation," Ford chief financial officer Lewis Booth told me at the recent Geneva Motor Show. "Taking government money is thought to be un-American. Our dealers sold to lots of GM owners who say they'll never buy another GM car or truck again." Of the automotive Big Three (GM, Ford and Chrysler), only Ford did not have to go begging in Washington.
Not that government benefaction to car makers is new. France regularly props up its car makers (Renault is still part state-owned), most of us can remember British Leyland, and even modern automotive success stories such as BMW and Volkswagen would not be here today were it not for past taxpayer bailouts.
For Ford, the new car that is likely to lead it even higher into the sunny uplands of recovery is the new Focus, the most distilled version yet of boss Alan Mulally's 'One Ford' or 'world car' philosophy. New Fords are now developed for global audiences with only minor changes to reflect market taste and legislation. The new German- and UK-developed Focus will be built in every continent and sold in 120 different countries.
Such vast volumes and economies of scale allow Ford to offer an astonishingly high level of equipment. Features normally only found on high-end luxury cars are offered, including radar assistance to stop low-speed urban accidents, adaptive cruise control (which automatically maintains a comfortable distance to the car in front) and automatic parking (which magically steers the vehicle into tight parking spots). Even more high tech is a new voice-activated system that can set cabin temperature, make phone calls, ask for satellite navigation instructions and play music.
The Focus already has a reputation as the keenest-driving car in its class. The new one rides better, is quieter and more refined — it's a more rounded car, and more Golf-like. The only disappointment is that it's not quite as agile as the outgoing model, a loss that will be most keenly felt in Europe. That, I guess, is the downside of a car designed for the boulevards of LA and the expressways of Shanghai, as well as British B-roads and Alpine passes.
Gavin Green is a motoring journalist and consultant.
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