banker55

Increased robotic paint automation and Fords new dirt detection technologies were installed at DTP and Kansas City.

The sheet metal is not the problem. Aluminum and steel paint well. The process is the same, but as you increase the surface area with more aluminium, your pre-treatments are affected. Changing from all steel to all aluminum creates 7 times the sludge in the zinc-phosphate bath and affects the e-coat baths as well. This causes problems with the pumps and the tubing. Switching from zinc-phosphate to a zirconium bath stops the problem but is more expensive. If either of the metals is prepared properly,with the cleaning and the e-coat,and than painted properly there would not be a problem. What can go wrong? Not maintain 125 degree zinc phosphate, not cleaning e-coat electrodes , not cleaning grates and walls in prime and color booths, not changing the filters, not cleaning robots, a sudden change in weather , a power outage , a booth fire, too much sludge under the grates affecting air flow....or a repaint after system damage. At 75 an hour a sudden thunder storm that changes the atmosphere well affect some cars in paint . I don't remember aluminum being a problem from Ford's internal reporting or reports like JD Power. A paint problem is a paint problem...not a metal problem. Not since the early 1970's

Fords automotive debt is in the ballpark with the other company's. Ford Credit has large debt that they turn into a big profit. The debt is secure to a point.This is a money machine for Ford. This is a competitive advantage for Ford. Ford has some problems,but it is not their debt to capital structure. Put it another way,Ford Credit skewed the ratio, but over the last 3 years it covered Ford of Europe's 3.5 billion dollars in losses. Borrowed money well managed.

I like Ford's capacity utilization going into the next downturn which will happen. Run at 120 to 130 per cent capacity during the good times and back off during the bad times. The 2015 f150 launch and ramp up cost Ford margin's in the last 12 months, looks good going forward. Ford has the free cash flow to fix my pension funding....just waiting. waiting,waiting. Ford family is fair,so barring a disaster, they will fix it. GM, not so much. Ford has done a lot to fix their pension funding,just not my particular plan. I am glad I returned to Ford on contract after retirement on several occasions. Sure helped my bank account!!! On a side note, Ford stock is looking enticing.

I was just trying to show that the margins for both companies are not that great even in their strongest market. I noted a quarter is not a point of comparison. I believe Ford and GM make a very good profit on trucks and large SUV's and not much on cars. The cars drag down the average.(my guess,no facts). Fords success is key to my success as I read a Ford letter about my under funded Ford pension plan.

Ford vs GM last quarter North America Units 678000 vs 829000 Revenue $20 billion vs $24.7 billion Rev per unit $29499 vs $29749 Profit $1.340 billion vs $2.2 billion Profit per unit $1976.40 vs $2653.799 It would also appear that GM will be taxed at about 28% vs 33% or 34% for Ford. Quarterly reports are too short term for comparisons. Europe still no good for both companies. Ford of Australia made more money in one day than GM of Europe over 15 years. Another note , VW vs Toyota... similar sales and production...600,000 employees' vs 350,000. Ford numbers will improve next quarter, but so will GM's . Should be interesting. Fords operating and free cash flow looks great and that is what pays the bills.

Profits guess from Centre for Automotive Research at Germany's Duisburg-Essen University. CAR calculates that Toyota’s global profit margin is more than three times higher than the VW brand — at around the equivalent of $1,783 or 8.6 percent per car compared with VW’s $585 or 2.5 percent. GM makes $848 (4.2 percent) and Ford $683 (3.9 percent), according to CAR. Even Czech based Skoda, which makes a large range of cars using VW parts hidden under different bodywork, makes $1,110 per car.from(Neil Winton Detroit News)

Ford shines on operating cash flow. Last three years $9.045 billion, $10.444 billion and $14.507 billion.

Toyota NA operating profit is $1977 per unit. Looks like VW does not break out figures for VW in North America. Not good world wide so close to break even here.

I will see what I can find.

I guess at my age I should not read GM's financial's on my iPad mini. I did the numbers at Charlotte airport waiting for my return flight to Detroit.

GM NA EBIT $2.2 billion on 829000 wholesales is $2653 per unit profit. Ford NA EBIT $1.34 billion on 678000 wholesales is $1976 per unit profit. GM world wide profit after tax $1460 billion on 2416000 units per unit profit $604. Ford world wide profit after tax $ 924 million on 1568000 units per unit profit $589. FIRST QUARTER FORD EBIT before tax 2015 $1.340 billion before tax on 678000 units at $1977 per unit. 2014 $1,500 billion before tax on 717000 units at $$2092 per unit. 2013 $2442 billion before tax on 761000 units at $3209 per unit. 2012 $2100 billion before tax on 651000 units at $3226 per unit. All numbers are from Ford And GM financial reports submitted to the SEC. I rounded up the sales numbers.

Oakville built 255924 units in 2012 and 258358 in 2013. In 2014 Ford added 1000 employees and announced another 400 for 2015.

6.6 billion dollar profit from 3.32 million units . That is $1988 profit per unit. GM's (and Fords) large trucks and SUV's make lots of money for their company's. If GM's large SUV's made $10000 each, that would be over 50% of GM's NA profit. The plant is sold out. It builds over 1200 a day six days a week with optional Sundays. Over 50 weeks that is 360000 units not including Sundays. 50% of Suburban is top of the line,GMC close to 70% and lots of Cadillacs as well. List prices range from 46300 to 97940. With some logic can we get to $10000/unit? Using managerial(cost accounting) rules, the fixed costs are identical by definition and the variable cost of labor and steel are almost identical. Seats , tires , audio etc. have more of a range in costs. As a start point,lets say GM makes their average profit of $1988 on a base Tahoe/Suburban. Top of the range for Chev and GMC is about 80000. Cadillac range is 72970 to 97940. So what is the net cost/profit ratio per $10000 in options? Lets say 20%. Top of the line GMC/Chevy profit would be 1988 plus 6600 equals $8588. Cadillac would be more. I think the $1988 profit on a base unit is too low on a $46300 vehicle and I think 20% net on options is too low as well. I think the story would be similar on Ford and GM full size trucks, except the volumes are huge. Do Ford and GM make $2000 on a base full size truck? Maybe. Do they make a lot more on a $60000 truck? Yes. Do they have the best cost structure. Yes. For GM,if they make $3300 on each full size truck/SUV that is half of their profits. If they make $5555 on each that is all of their profits. Some of the numbers are from the GM 2014 financial reports, the Arlington Plant numbers are quotes from the plant manager summer 2014. The price ranges were from GM website. The important numbers are accurate. The unknowable numbers are a guess. I think it is safe to say that GM does not make much profit on cars in NA. USA full size trucks 741588 plus Canada 88000(close) plus Mexico 12000(guess) plus 350000 large SUV is close to 1.2 million units. $5555 times 1.2 million units is 6.7 billion dollars...all of GM's profit in North America. $4444 times 1.2 million units is 5.3 billion dollars...80% of GM's profit in NA $3333 times 1.2 million units is 4.0 billion dollars...60% of GM's profit in NA And GM is going to sell more new Malibu and make an extra $1500 profit each.Maybe they are going from a $2000 loss to a $500 dollar loss. That is a big improvement. Sorry for the rambling. Just some serious numbers to look at. Maybe some of the Wall Street guys are not far off at the high importance of trucks to the bottom line in NA

2015 looks like a good playing field for both companies. Both had big issues in 2014. The super segment for both companies is trucks and SUV's. They generate the profit and more importantly the free cash flow. Ford won in 2014. Ford made 6.898 billion in 2014 in North America. Ford sold 2.842 million units in 2014. Average price to dealer $28993, average profit per unit was $2427. So how do you get to the average? Fords margins were 8.4% in 2014 and are hoping for 9% in 2015. GM made a lot less per unit in 2014. (more units less profit). The answer is $2427. All figures are from the latest Ford financial statements. So how do you get to $2427?

Like supersized at the fast food joints

Citation?????

The key is Arlington Assembly Plant. GM's full size SUV assembly plant. They are sold out. They work 24/hrs 6 days a week with voluntary Sundays. 1200 plus per day. Most units are high end units. Top end of Escalade is $97940 and it gets to share fixed and variable costs with with Chevy and GMC. When you are sold out, you don't promote $43777 base models. By contrast, the Cadillac only Lansing Grand River Plant dropped a shift and has down weeks. Talk about massive fixed costs. Average transaction price will not cover a massive increase in fixed cost. The Lansing plant manager is explaining why he bought a bundle of gloves while Graham ,the Arlington manager , does not have to explain a $30000 golf membership.

I get your point and yes that would be a problem. We used some trucks but mostly rail.I came back off of retirement and ran pre-delivery in 2006-2007 and we never had a rail problem. Before the recession, 17 million units was not a problem in the industry and its taken a long time to get back close to those figures. The railroads sure had plenty of time to adjust to the gradual increase in demand. The logistics have changed as production has drifted south with the foreign makers. Maybe they took a lot of cars out of service during the recession. They used to use some of the smaller carriers along with the extra large ones.Maybe the retired all the small ones.

The trains leave on schedule whether you can ship or not. It is not their problem. The rail cars are due somewhere else and they will be there. Both Kentucky Plants are busy. Set Wayne up like the Kentucky plants and you can shut the Mexican plant.

Wait until he looks out the window in New York, Bright yellow and body on frame...it must be the new paradigm.

The plant runs at over seventy an hour and that is off Final. Body probably can run 75 units per hour. Most plants run faster in body than paint and faster in paint than final assembly. With the two back to back ten hour shifts you create three hours repair/qc time between shifts for the pre-delivery area. Under the same conditions you can repair as required in body and paint for those same three hours as required. During the same 3 hours you tip dress in body, chip excess welding material from robots and presses, clean and lubricate for early morning startup....also repair any equipment and conveyors for starup. The paint shop has to clean grates and sludge under the grates, check sealer robots and power wash prime , main and clear coat booths. You have to continually burn chains, hooks and skids for excess paint buildup before they can be returned to body to repeat the cycle.You must change filters in the air system. At the end of the two back to back shifts, most zones in final( chassis and trim)will keep a repair person to certify their zone or a few repairmen will work back the system to ensure a good start-up. The 100 plus people that work in pre-delivery(high seniority) work the hours between the shifts and are supplemented from the the system. Most of these people work every weekend fixing and shipping cars. Yes there are bottlenecks, like certain vendors can't supply enough parts or a run of bad parts.You still must run the plant and fix later if you are in a sold out scenario. My last plant had a giant bottleneck which was the long wheelbase robot(the size of a small house). We ran it around the clock seven days a week at 2.5 per hour. You need time , people and money and you don't run out in Kentucky until well past 400000 units. Either Kentucky plant could build all Focus and Fiesta combined.......with room and manpower to spare. Thats how you set up and run an assembly plant.

Running two 10 hour shifts at 71.1 units an hour with tag relief gets you more than 350000 units per year. Work Saturdays and you can get to 400000. This is a fast plant for Ford, but it is only the second fastest Ford plant in Kentucky. The above figures include two 30 minute lunches. The beauty of two tens is it give you 3 hours maintenance and shipping time at the end of each day. The majority of my Ford career was two tens.

So true on the sun. I shovelled a 10 foot square in three feet of snow on my deck late in February. Sat in the sun 6 times since.