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Ford is biggest spender on R&D
According to a European Commission report, Ford is the car industry's biggest spender on R&D. Ford was number one until this year, but got outspent by pharmaceutical company Pfizer. (The Blue Oval vs. the blue pill...who knew?) Ford spent somewhere between $7.4 billion and $8.2 billion dollars developing its product line.
Carmakers have generally owned the top positions in the world's R&D expenditures. As recently as 2004, the top five R&D spenders were Ford, DaimlerChrysler, Toyota, Pfizer, and GM. The pharmaceutical and tech sectors have raised their spends by the greatest percentage, though, and now only Ford remains in the top four. Europe's biggest automotive R&D spender was DaimlerChrysler at $7.34 billion. We would be really interested to get the breakdown in Ford's spend, specifically to see how much goes to its European models vs. American models.
[Source: Detroit News]
Reader Comments (Page 1 of 2)
James 1:57PM (10/07/2007)
It's not how MUCH you spend but HOW you spend it. I'm guessing that "R&D" means, for Ford, research into fuel cells, hydrogen, etc. vs. actual new product development.
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David 1:18AM (10/08/2007)
Holy cow?!?! What exactly does that kind of money buy?? I guess once it gets through the antiquated and byzantine ford corporate structure it must only be a few million when it reaches paydirt. It would be different if they just spent that money in the past year for cars launching in the next few. But if they have spent like that for years ... good grief ... they spend just like the gov't.
doug 2:11PM (10/07/2007)
Talk about having nothing to show for the money you spent!
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mk 2:10PM (10/07/2007)
not that spending that kind of money is bad, but what are they getting for it?
A bunch of sedate FWDrivers, some trucks that are getting a bit long in the tooth, a pony car that still uses old suspension technology.
Mercury gets fords with new grilles, Lincoln gets slightly more elaborate new grilles. Jaguars haven't been updated in quite a while, and the C-XF gets blandified for production.
Mazda still doesn't have an RX7 replacement, and the RX8 is in need of a re-fresh. Volvo is ok, but losing its performance models. Aston is doing better than ever, but just got sold off. Some european fords and austrailian fords are nice, but probably don't account for ALL of the R&D.
Still no real FoMoCo non-FWD sport sedan in the US. No real GT coupe competitor (more sophisticated than the retro Mustang) to the G37/3-series, or something to undercut them, in addition to the models they do have that need to be refreshed. Like Maybe the dinosaur Ranger.
Imagine what Ford could do if their R&D were actually generating good results, and cars that people wanted to make an effort go go out and buy.
What is that money getting them? Sync? Microsoft reliability for your car? no thanks.
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zamafir 2:16PM (10/07/2007)
It's getting them all those extraordinarily well received european products which ford refuses to bring over. (hint: the report was commissioned by a european entity)
un4tgivn 8:50PM (10/07/2007)
Not that I disagree with your statement as Ford's North American lineup is about as exciting as a pet rock.... But I feel that your notions may be a little misguided.
In terms of vehicle sales, Ford still has a winner with the Mustang and has no need to go after the 3-series or Nissan G37. It wouldn't even be fitting of the blue oval to attempt to steal away market share from those two.... And rebranding Lincoln on a scale similar to the rebirth of Cadillac is not exactly an overnight cram session. Even if Lincoln were to throw together a GT Coupe using the LS' rear suspension regrafted onto the Mustang's platform (*cough* LS platform), it would be a tough sell unless it had some serious power or at least some serious style.
Ford DOES have a lot of problems that do need to be addressed however. In Canada where compacts reign supreme in sales, the Focus has been a dud for a few years now. The problems experienced by early focus owners have scared any perspective buyers away, and a pricing structure that has modestly-equipped Focii competing with a Camry LE just doesn't make any sense. The european Focus is well known... but deemed too sophisticated for "our" markets. Figures..... But to nobody's surprise, the Mazda3 is a hit up here in the frozen north. WAKE UP FORD!
Another missing competitor from our markets is the Fiesta. These subcompacts would be a hit here, especially if they could keep the price low. Maybe the Yanks won't appreciate this car.... but some of us would.
Moving up to the mid/fullsize category, it's been argued for nearly a decade that Ford should import the Falcon from Australia to replace the Taurus/Five Hundred AND the Panther-chassis cars. This is kicking a dead horse here.... so I won't go much further into it.
mk 10:16AM (10/08/2007)
I agree that compact cars could use a lot of help, as well.
I have never really subscribed to the euro cars being "too sophisticated" for the US. I think the US decision makers are too lame to realize that people would pay a decent price for a good car. People just won't buy crap with good money, and most of the econobox offerings in this country have been crap. As you say, the Mazda 3 has broken that mold a bit.
As for the Mustang... I used to be a Mustang fanatic, once upon a time. I used to have a fox-body. My dad has a 2005 Mustang. If you are looking for muscle-car-like performance, or an outward style statement, and can overlook EVERYTHING else, then maybe.
I enjoy driving and being in the car. I would not buy a new Mustang. The ride isn't that smooth (I don't care how many people gush over the new rear suspenion, it is still a live axle, and it still rides like my old Ranger 4x4.)
And the interior materials suck. My 2005 subaru feels like a lexus in comparison.
I am sorry, but the Mustang barely cuts it on name and face recognition alone, and the fact that so far, it has been competition free in it's market.
But for those of us who enjoy cars simply for ourselves, and appreciate handling and design. Not so much.
I don't know why, for all those R&D dollars, there is no mercury RWD coupe. Call it Cougar, call it whatever you want... but something stylish, and something that handles as well as it goes forward.
Personally, I was very impressed with their 1998 MC4 concept car, that pre-dated the RX8 by several years. A GT hatchback, with what became the RX8's 'freestyle doors', folding rear seats for a flat load floor under fastback roofline, with modular V8 power and RWD. That never came about. Something like that priced at $25-35k could do well, I think.
And I am not talking about a Lincoln luxo-cruiser successor to a Mark XIII, although some people might like that, too. The gradual starving to death of Mercury over the last 10-20 years is a puzzlement, in itself.
zamafir 2:14PM (10/07/2007)
I'd like to see a list of spending as it reflects total income, ie: which automaker spends the highest percentage of their income
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whofan 2:26PM (10/07/2007)
I would have to say that Ford probably will come out on top for spending vs income too.
Ford`s not raking in much cash these days.
zamafir 3:05PM (10/07/2007)
Well, I'll go ahead and reiterate that I'd like to see the numbers, not people's gut opinions on the matter. Ford made $258,000,000 profit per the July 2007 statement pertaining to the second quarter. Their revenue was $44,000,000,000. While 258 million may not be 'a lot' of profit, revenue of $44 billion is significant.
500 12:55PM (10/08/2007)
zamafir, 258 million on revenue of 44 billion is less than a 0.6% profit margin! That's pathetic. The US government even does better than that with our Social Security money!
zamafir 2:39PM (10/08/2007)
I agree, whole heartedly
adrian 2:28PM (10/07/2007)
There's must be some serious politics going on as to why Ford does not send more of their european/aussie models over to the US, Considering how much money their spending in R&D and losing in sales. It's baffling.
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naggs 3:38PM (10/07/2007)
"We would be really interested to get the breakdown in Ford's spend, specifically to see how much goes to its European models vs. American models."
for cars... somewhere between 90-10 and 100-0
although i would not be supprised to learn that the f series absorbed a significant chunk of RnD
but this goes back to the biggest problem i have with ford, they spend billions on design and engineering but when it comes to putting that in the hands of drivers, they always seem to decide to not be able to justify the cost to upgrade the factory to produce the new model.
more evidence that ford is in fact the worst run company on earth over the last 10 years. how its being run now is unknown, it takes about 10 years for the decisions that get made today to take effect in the cars that are on the road.
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Mike 6:40PM (10/07/2007)
The current expenditures are on new models that will be what the customer is asking for.... a B-sized car, a global Focus, a global Mondeo/Fusion, a global Kuga, etc.
As for actually seeing the changes on the road, some you are seeing now (Taurus name, SYNC, etc.) but for the most part it will be about 4 years from now.
naggs 8:10PM (10/07/2007)
but they have been spending like mad on R&D for years and their products are still *behind* the competition.
they have been spending the most for years and when it comes to actually putting good innovative product on the sales lot, they are near the back of the pack, at least in the US for cars and light passenger vehicles.
how is it possible that they lead everyone in r&d and have
20+ year old light truck platform
25+ year old rwd sedan platform
10+ year old small car platform
the worst part is that non of these will be replaced in the next 3 years at least
how much better off do you think ford would be right now if the hot selling and almost universally praised mazda 3 was a ford focus? or if instead of the volvo XC90, ford decided to join us in the 21st century and build the explorer on that platform? or if the ranger had kept up with the times and the average selling price was somewhere around 20k instead of the 'break even to keep UAW off our ass' 10k?
i could go on and on, ford deserves to die and if the company does not survive it will be proof that a blank check for r&d is not all it takes to make it, you also need product people with the drive, determination and talent to turn innovation into something that can make a profit. bill ford clearly did not have what it takes.
Greek Boy 6:57PM (10/07/2007)
OH MY GOD, you kids crack me up!!!
Ford was 1st with full hybrid SUV's - fact.
Ford sells more 6-speed transmissions than anyone else - fact.
Ford offers more PZEV vehicles than anyone else - fact.
Ford was 1st to market in the US with clean truck Diesel technology - fact.
Ford sells more AWD vehicles than anyone else - fact.
Ford offers more 5-star safety rated cars - fact.
Ford trucks are the most capable trucks on the market - fact.
Ford was 1st with cool technologies like sync, and HD radio - fact.
Ford was 1st on the road with new technology like hydrogen busses all over the country - fact.
Ford Focus and Taurus are more FE than anything else in their segments - fact.
I bet much more is coming, so obviously, their R&D has been well spent.
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Matt 9:22PM (10/07/2007)
And what do they have to show for it? Sagging sales, a horrid looking compact car, a "sports" car that has medieval rear suspension, interiors that rival a '91 Escort for quality, an absolutely terrible looking heavy duty truck, and did I mention sagging sales?
Oh...but now you get a Mach 3 Razor on the front of your car that can now work as good as your Microsoft based PC.
Way to go Ford, you failed yet again.
MikeW 10:26PM (10/07/2007)
Ford may sell the most 6 speed automatic (if you are counting ford's world sales), but nearly all their implementations in the US suck.
Exceptions: Explorer,Mountaineer,SportTrac 4x2 4.6 V8 3.55 axle ratio, (and Ford conveniently forgot the 3.73 4x4) Expedition 4x4 3.73 (No 3.55 for 4x2), Expedition EL 4x2 3.73 (No 4.1 for EL 4x4), front drive TaurusX (no 3.39 for 4x4), Lincoln MKX 4x4 3.39 (no 3.16 for 4x2), MKZ 4x2 (no 3.749 haldex)
The new 6.4 diesel might be clean, but the serial turbocharger arrangement stinks, also the 3 speed automatic + overdrive, for 6 possible forward ratios (it doesn't make it a 6 speed automatic, because it doesn't shift from overdrive 2nd, to direct drive 3rd) doesn't do it any favors. Where is the second generation ZF 6 speed automatics in the Ranger (6hp21)/F-150(6hp28)/Superduty(6hp34, Ford and RollsRoyce is enough of a market to get ZF to replace the 6hp32)?
"AWD" is a marketing term, it is technically meaningless. Four wheel drive was defined 100 years ago. Power from the transmission goes to a center differential, and then to front/rear differential. Not to a center differential and to a left & right differential.
Haldex is for people who don't know what summer & winter tires are (and have never seen the RMA snowflake on a sidewall)
and those dual beam headlights on the hybrid escape/mariner (just like the Yaris and Fit) Way to nickel & dime people. H11 low, H9 high, H8 helper fog lights.
justme 12:33AM (10/08/2007)
Hey Matt & Mike W.....
I am sure I could not find anything wrong with any other manufacturer, LOL.
Bottom line, I listed all facts that could not be disputed. You merely went on and on about vehicles that were designed 4-8 years ago. R& D money that has been spent recently, is for vehicles that will not appear for another 2-6 years...you twits. Get a clue!!!