"Take a reasonable car (insert one here, say VW bug/corona/510/civic/Bclass)
and continue to improve it"
Bingo. You have to start with a reasonable car. Ford didn't. The 500 is one of the worst cars ever. If you start with an Edsel, you will still have an Edsel when you are finished.
The latest Mustang was a good idea. The Focus may be salvagable. The 500 is a turkey.
The main problem here is that Ford has not had "a better idea" in 40 years. The low price market has gone to the Koreans. Since Ford can't compete in the low price market, they are stuck with competing against Toyota, Honda and Nissan. No contest. Ford loses.
When Ford downsized the Taurus(which was number one car in US market)..they lost their market share. I really liked the final version of the larger Taurus. Had two as company cars and drove them a total of 150k. When they downsized I chose the Intrepid and others went to the Camry.
End of story.
Our friends will not even look at American cars..I think Ford is doomed.
OTOH, if I had the disposable cash, there would be a Ford-GT sitting next to my Vette.
The main problem here is that Ford has not had "a better idea" in 40 years.
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All that's needed is much more chrome and I think some dramatic fins and a continental kit and an opera window would really improve their sales. List as standard equipment, hi fi radio, curb feelers and mud flaps.