Why Ford Ditched Its Boring Cars

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Danny Lewis (0:18)

Two people have now died from the cyclosporiasis outbreak. And there's a spiny desert plant that could one day make your toilet paper softer?

Natasha Khan (0:26)

The company has been scouring the earth for material that could replace wood fiber for 20 years.

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Plus, RIP to the Ford Taurus. Why did Ford stop making boring cars? It's Monday, August 3rd. I'm Danny Lewis for The Wall Street Journal, filling in for Alex Osala. This is the PM Edition of What's News, the top headlines and business stories that moved the world today.

We start today's show with the latest on the cyclosporiasis outbreak that spread across the US this summer. Two people in Michigan have now died, the first deaths tied to the outbreak. Michigan public health officials say that both of the people had significant underlying health conditions and that those may have been exacerbated by the illness and dehydration. Cyclosporiasis is not generally life-threatening in the US.

Turning to the Middle East, Iran says there are no talks underway or planned with the US. President Trump this weekend called off a major strike on the country to provide more time for negotiations on freeing traffic in the Strait of Hormuz. But the Iranian Foreign Ministry rejected Trump's suggestion that talks were underway, though Tehran did acknowledge that it is continuing talks with Oman on how to manage the Strait of Hormuz. In a social media post today, Trump called Iran's leadership, quote, duplicitous.

Stocks rallied and oil fell today on hopes for a diplomatic breakthrough on Iran. The Nasdaq soared more than 2 percent. The Dow and S&P both gained more than 1 percent, with the Dow closing at a record, its first since early July. And Brent crude, the international oil benchmark, fell 4.7 percent. It's trading just under $84 a barrel.

In earnings today, Marriott says the conflict in Iran put a significant damper on second quarter sales, and the hotel chain is bracing for persistent challenges from the war. While Marriott's second quarter revenue rose 5 percent to more than $7 billion, that missed analyst expectations. And in the Middle East, Marriott saw a 43 percent drop in a crucial lodging metric, revenue per available room. Shares fell about 7 percent. And Tyson Foods lowered its profit outlook for the year as soaring cattle prices continued to weigh on the meatpacking company's bottom line. Tyson says it expects its beef division to lose up to $650 million this fiscal year. But its stock closed up 2.9 percent. And as you heard on our show last week, Chevron and ExxonMobil just posted blockbuster earnings. President Trump has a problem with that.

SPEAKER_1 (2:59)

But they made too much money, too much money. Chevron, too much money.

Danny Lewis (3:06)

ExxonMobil, too much, too much money. The companies are benefitting after the Iran War sent energy prices higher.

Natasha Khan (3:13)

They're going to give some of that back to the public. And they better cut the retail price, the consumer price.

Danny Lewis (3:20)

Exxon and Chevron declined to comment.

Ford used to be known for, frankly, boring cars. Cheap hatchbacks, minivans and the good old family sedan. Like my high school friend's 1994 Ford Taurus that we lovingly called the Silver Bullet.

But Ford no longer makes any of those cars. Instead, the automaker's new lineup is all about passion. And it's been great for Ford's bottom line. WSJ Auto's reporter Ryan Felton joins us now from Detroit to explain just what's behind Ford's new strategy.

Ryan Felton (3:54)

The overall umbrella term is no boring cars. They don't want something that looks like everything else anymore. You know, you definitely could see that some of the styling choices that they make, but also just the fact that they've leaned in to some of these particular vehicles. The iconic ones, you got the Mustang, the F-150, the Bronco.

Danny Lewis (4:15)

But one of the things about boring is that those tend to be a little bit more affordable, right? Henry Ford once wrote that he'd rather sell lots of cars at a small profit than to make more money on fewer sales.

Why is the company now going in the opposite direction of its founder?

Ryan Felton (4:30)

They're adamant that they're not abandoning the affordable market.

And that we're just kind of in this transition period. They say that they're intent on getting back into the space by the end of the decade. But in the meantime, yes, the cheapest options that Ford has available is a small pickup truck and a small Bronco that is not totally welcoming and inviting to everyone. You have to really like it.