Ford readies to revamp Lincoln yet again to save brand

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Updated 07 December 2012
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Ford readies to revamp Lincoln yet again to save brand

DETROIT: After failing numerous times to revamp its lagging Lincoln brand, Ford Motor Co. is preparing to try yet again with a new compact crossover aimed at younger drivers looking for a finely crafted but low-key luxury car.
The Lincoln MKC, will be previewed as a concept at the Detroit auto show in January and should reach US dealers in early 2014, according to people familiar with the matter.
The MKC is the second of four core models that Lincoln will pitch to an growing market insiders call “discreet luxury,” epitomized by fashion labels such as Paul Smith and Bottega Veneta that avoid overt symbols of wealth.
But auto experts say Ford will find it difficult to overhaul and reposition an ageing brand broadly viewed as musty. It also faces competition in the luxury compact market from BMW AG’s, Honda Motor Co’s Acura RDX and others.
“What they always forget about is that brands carry baggage,” said John Wolkonowicz, an independent auto analyst and historian. “You can’t just push a magic button and the baggage is gone, and suddenly Lincoln can be anything I want it to be.”
Ford says this overhaul will be different because it has pruned its brands since 2006. Selling Volvo, Jaguar/Land Rover and Aston Martin leaves ample resources to focus on Lincoln and distinguish it from Ford, company executives have said.
Lincoln, which Ford purchased 90 years ago, was the top-selling US luxury car in 1998, but has since tumbled into eighth place. Its sales have declined from a peak of more than
231,000 in 1990 to just under 75,000 in 2012. Daimler AG’s Mercedes-Benz, the top-selling luxury brand, has sold about three times more vehicles than Lincoln this year.
The average Lincoln buyer is 65 years old. Ford wants to lower that to 57 and raise the target average income by more than 50 percent to nearly $ 160,000 a year.
The redesigned 2013 MKZ midsize sedan, which arrives at dealers later this month, is the first of the new Lincoln lineup. Before it left the studio, the MKZ was reworked by
40-year-old chief designer Max Wolff, who was lured to Lincoln from Cadillac in January 2011.
The MKC crossover will be the first Lincoln model completely designed by Wolff, whose projects at rival General Motors Co. included the popular 2013 Cadillac XTS.
Under Wolff, designers are crafting a new look aimed at younger consumers “who enjoy fine things, but are not overt ‘badge-wearers,’” said a Ford executive familiar with Lincoln’s evolving game plan.
Wolff is also overseeing the styling of two other Lincolns — the redesigned 2015 MKX midsize crossover, due in the autumn of 2014, and the redesigned 2016 MKS full size sedan, expected in the spring of 2015, according to two industry analysts familiar with the plans.
“What’s good is Lincoln’s push to differentiate itself from Ford,” said Sam Stevens, a dealer for Stevens Auto Group in Milford, Connecticut. “Why would you buy (Lincoln) if you can buy the same thing on the floor for less?”
Ford declined to confirm its $ 1 billion investment in the Lincoln brand or its planned compact crossover.
The No. 2 US automaker renamed the brand the Lincoln Motor Co. recently and announced a Super Bowl spot to show off its new vision.
Lincoln is also considering — but has not approved for production — several products in addition to the four core models, said the analysts familiar with Ford’s line-up.
For 2016, a luxury rear-wheel-drive coupe could share its underpinnings with the Ford Mustang and could be assembled at Ford’s Flat Rock plant in Michigan.

Ford says its new Lincoln lineup could draw about a quarter of the US premium car market now up for grabs as the economy recovers.
“They are looking for something new,” said Jim Farley, head of global marketing and the Lincoln brand, in an interview with Reuters Television. “They really don’t have a brand
out there that really talks to them individually.”
But Wolkonowicz and other experts said the Lincoln lineup still does not have a “design signature” such as the sharp, more aggressive look Wolff helped refine at Cadillac.
“Lincoln’s image is lagging behind, compared to its actual product line,” said TrueCar.com analyst Jesse Toprak. “The product is the best they’ve had, but people make decisions based on the image of the brand.”
Although they are being extensively redesigned, the 2015 MKX and the 2015 MKS will share the same midsize platform with the 2013 MKZ and its sibling, the 2013 Ford Fusion, according to the analysts familiar with Lincoln’s plans.
The new MKC will share its basic underpinnings with the Ford Escape, which is built on a version of the company’s global compact platform.
In addition to those four core products, Lincoln plans to introduce a mildly revised version of its big Navigator utility vehicle in the autumn of 2013, said a company executive familiar with the brand’s launch schedule.
The 2014 Navigator is expected to use Ford’s powerful EcoBoost V6 engine instead of the current 5.4-liter V8, but will retain its truck-based body-on-frame architecture and ample size. Another carryover model is the MKT full size crossover, which received a modest update earlier this year, but is not slated for any major changes over the next three years, according to the analysts.
Lincoln is considering a near-luxury compact sedan which, like the MKC crossover, would be based on the global compact platform, for 2016 or later.
If approved, the small sedan likely would be sold in the US and China, where the brand is being launched in 2014, said a company executive familiar with Lincoln’s plans.


Intel CEO resigns after probe of relationship with employee

Krzanich led Intel as rival chipmakers ate away at its dominance in the technology over several decades and he also presided over a series of high-level executive departures. (AP)
Updated 37 min 28 sec ago
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Intel CEO resigns after probe of relationship with employee

  • Corporations are under increasing pressure to “walk the walk” on executive behavior with the rise of the #MeToo movement
  • The board named Chief Financial Officer Robert Swan as interim CEO

Intel Corp. Chief Executive Brian Krzanich resigned on Thursday after an investigation found he had a consensual relationship with an employee in breach of company policy.
The head of the largest US chipmaker is the latest in a line of men in business and politics to lose their jobs or resign over relationships viewed as inappropriate, a phenomenon highlighted by the #MeToo social media movement.
Krzanich led Intel as rival chipmakers ate away at its dominance in the technology over several decades and he also presided over a series of high-level executive departures.
The change in leadership comes as Intel expands beyond personal computers and servers into areas such as artificial intelligence and self-driving cars, where smaller competitors including Nvidia Corp. are strong. Qualcomm Inc. leads in the mobile chip market.
The board named Chief Financial Officer Robert Swan as interim CEO and said it has begun a search for a permanent CEO, including internal and external candidates.
“An ongoing investigation by internal and external counsel has confirmed a violation of Intel’s non-fraternization policy, which applies to all managers,” Intel said in a statement, declining to give any further information about the probe. Its shares fell 2.4 percent.
The company’s board was informed a week ago that Krzanich had a mutual relationship with an employee in his chain of command in the past, according to a source familiar with the matter who asked not to be named. The relationship began before Krzanich became CEO in 2013 and ended several years ago, the person said.

‘BK’ out
Krzanich, who did not have an employment contract, is entitled to a $38 million “walk-away” payment in the event of a voluntary termination, according to Intel’s regulatory filings.
Of that, $31 million is in the form of accelerated stock awards and $4.1 million in the form of deferred compensation, based on Intel’s share price on Dec. 29.
An Intel spokesman declined to say whether the walk-away payment applied to Krzanich’s resignation, but said the investigation into Krzanich’s conduct continued and that the board reserved the right to take further action.
Corporations are under increasing pressure to “walk the walk” on executive behavior with the rise of the #MeToo movement, said Ivan Feinseth, chief investment officer at Tigress Financial Partners.
In the last few months Martin Sorrell, founder of advertising giant WPP Plc, and casino mogul Steve Wynn of Wynn Resorts Ltd. resigned after accusations of impropriety. Wynn has denied the accusations and Sorrell has denied any wrongdoing.
Krzanich, 58, an engineer and Intel veteran known at the company as “BK,” was appointed CEO in May 2013. Intel shares more than doubled during his tenure as the company expanded into new markets.
He was recently credited with containing the fallout from the discovery of security flaws in the company’s chips that could allow hackers to steal data from computers, although his sale of much of his Intel stock before the flaws were disclosed to investors attracted some criticism.

Time for an outsider?
His temporary replacement, Robert Swan, has been Intel’s CFO since October 2016 and previously spent nine years as CFO of eBay Inc. Given his short tenure and lack of experience in manufacturing, he is not likely to be named permanent CEO, Cowen analyst Matthew Ramsay said.
While Intel dominates in processors for servers and data centers, global competitors are catching up with its manufacturing technology, said Bernstein analyst Stacy Rasgon.
“BK will go down in history as the CEO that let Intel’s process leadership advantage slip away,” he said, adding that a change at the top could bring in fresh ideas.
Kevin Cassidy, an analyst at Stifel, said that Intel would take the change in stride.
“Although we respect Krzanich’s efforts in redirecting Intel’s strategy from a computer-centric to a data-centric company, we view Intel as a process-driven company with a deep bench of CEO candidates that can continue to drive the corporate strategy,” he said.
In its 50-year history, Intel has never appointed a permanent CEO who did not come up through the company’s ranks.
But those ranks are thinner than they used to be, with prominent Intel executives such as former CFO and manufacturing chief Stacy Smith, former president Renee James, ex-architecture chief Dadi Perlmutter and Dianne Bryant, who headed the data center group, leaving in recent years.
Instead, Krzanich’s replacement could end up being one of the outsiders he brought into the company’s executive ranks, a sort of “insider outsider” such as Murthy Renduchintala, Intel’s chief engineering officer who joined Intel in 2015 after helping lead Qualcomm’s chip business.
“They’ve got some very good people they’ve brought in,” said Dan Hutcheson, CEO of VLSI Research Inc, who “know the company, know the new direction. It’s not a turnaround story.”
UBS analyst Tim Arcuri wrote to clients that “the door is open to hire from the outside.”
Intel on Thursday raised its second-quarter revenue and profit forecast, saying it expects quarterly revenue of about $16.9 billion and adjusted profit of about 99 cents per share, up from a previous forecast of $16.3 billion in revenue and adjusted earnings per share of 85 cents.
Analysts on average were expecting revenue of $16.29 billion and adjusted profit of 85 cents per share.
“There are no new payments as part of his departure,” a source familiar with the company told Reuters.