rkisler

Yep, nobody would possibly make the same mistakes again, and again, and again...... Last time I looked, the banks that provided around $4-5 billion for Cerberus to purchase Chrysler are still sitting on the debt on their own books because they were unable to schlep the paper to the market after two tries. I hope Ford buttons up this deal as fast as humanly possible to get that cash in hand!!!! I suspect this debt also will not be attractive to the market given the level of risk.

The plant has an ultimate capacity for 300k, but it was manned and processed for 200k prior to Job1 when it became apparent that the market was softening and Toyota's sales goals were too aggressive. You are right, that doesn't mean that they don't have some production tooling that isn't being used as efficiently as it should be. You can't just remove bits of equipment, so they had to do the best they could with modified manning and processing.

Ford's website says Heritage until June 28, 2004 closure. I don't think they were strickly for the Canadian market, but I don't know what the distribution pattern was among the plants.

IIRC, Toyota reduced the capacity from 300k to 200k before the plant even started production. Still, I don't like to see any manufacturer with this much open truck capacity as it puts downward pressure on pricing/margins. That certainly hurts Ford more than it hurts Toyota.

I'm thinking Ontario Truck Plant (OTP) which has now been incorporated with Ontario Assembly Plant (OAP) into what is effectively a single facility. Now building Edge/MKX and soon to be building Flex.

Here's my take: The funds borrowed by GMAC and Ford are secured by the purchase of vehicles. In the case of GMAC, there is also a mortgage component. The risk in mortgage borrowing has been due mainly to people being "upside down" on their homes which are now worth less than their mortgages. Their rates are being adjusted, they can't afford the payments, and they bail. Once again, GMAC's risk would be higher as they are into mortgages. There also is risk associated with financing vehicles. If more buyers lose their jobs and the cars have to be repossessed, then margins will be squeezed. There is a fundamental difference between auto financing and mortgages. Auto loans already take into consideration the depreciation of the purchase and the risk of the borrower. There could be periods early on when the buyer is upside down, but I don't think you have ever seen adds like "borrow 110% of your car!!!!" like we did for mortgages. I don't think auto loans were ever securitized (i.e., bundled and sold as a group); the auto finance arms keep the loans and are more directly connected to the customers. Of course, with declining vehicle sales, the absolute profit of FMCC will be going down. The risk will increase somewhat with a weaker economy and more chance of defaults, but should be under control. There is still plenty of money in the market for the right investments so I don't think FMCC will have any have trouble raising funds. But, since they are somewhat linked to financial institutions, the cost might be a bit higher from prime then they would like. As an aside, FMCC also has another unfortunate problem. Since they are fully owned by Ford Motor, their credit rating is linked which is not a good thing for FMCC. That was part of the reason that GM sold half of GMAC to Cerberus so it could be spun off with it's own rating. But what is a bad thing for FMCC can be a good thing for an investor. I have been able to purchase FMCC notes due within a year with a yield-to-maturity of 11-12%. I don't think the risk of FMCC going belly up in less than 12 months is very high, so I'm willing to take that deal.

You are correct. Another silly post from Tstang. Lewis Booth is a consumate business person. His background is finance and strategy. The temptation of a person at this level is to intrude into areas where one is not an expert (like design) simply because one has power, but that is not his style. He's done a great job. Certainly there might be some in Europe who would like to have more investment for their products as they have been doing pretty well lately and they might believe they could leverage the funds effectively. But if anyone were looking at Mercury for funding, they would find mostly empty pockets turned inside out. Mercury models probably go for around $25-50 million max for differentiation. That ain't gonna buy you much of anything. In fact, if the differentiation is done intelligently, the incremental volume for Mercury pays for the investment. And, right now, there is no LM without Mercury.

See my post above. Still CD3, but might have some other revisions which would be typical of a platform mid cycle. The Fusion is basically just a stretch of the first gen Mazda 6 with a new body. The AWD floorpan was developed from the Mazdaspeed 6. The new Atenza grew a bit. Mazda had the Fusion design available to them; whether they adopted it totally or developed it themselves is TBD, but a stretch is not a huge deal as it occurs in the middle of the vehicle. If they made other mods in the Atenza that changed underbody stampings, those changes would likely be passed to the Mazda 6 for the US and also made available for the Hermosillo triplets if Ford chooses to adopt them. There are certain areas of the car that are critical to maintain to keep development costs in check. Even though the metal is stamped in three different locations (Hofu, Hermosillo, Flat Rock), the underbody structure is an area that you want as common as possible. Also, there can be changes in the exterior sheetmetal between the European/Japanese Atenza and the US Mazda 6 without incurring huge costs. But...if Mazda were to change things like wheelbase, or door openings and seals, development costs go up. One thing to look at would be a side view of the doors to see how similar they are.

Not sure why you think that. Here are my thoughts so far. First, Atenza, Mazda6, and Fusion/Milan/MKZ are all CD3 and will stay that way until the CD3 and EUCD are unified in around 2011 or 2012. All you need to do is look at the description of the front and rear suspension to verify (in particular SLA front on CD3 vs. Mcpherson on EUCD). Let's concentrate on wheelbase: 2008 Mazda 6: 105.3" 2008 Fusion: 107.4" 2009 Japan/Europe Atenza: 107.3" 2009 Mazda 6 (USA): ?? The "C/D" entries have been growing, and the Mazda 6 ended up on the smaller side, so the increase in wheelbase and rear seat package makes sense. It looks to me like Mazda took the longer front floor pan designed in the US for the triplets, and applied it to the Atenza produced in Japan. And probably developed some other platform mods which will likely get passed back to the freshened triplets. I really don't think Mazda will stretch the US version any longer. Turning circle is already wide on the triplets, and it could become cumbersome with a further stretch. And, even though the body panels are stamped in different locations, the development costs would increase. I think when Mazda has been bragging about how the US version will be unique, they are exagerating the situation and merely taking advantage of the fact that they can develop minor unique surfacing and lenses because the parts are sourced from the US rather than Japan.

theoldwizard, Not on this topic, but a few days ago, there was a request for information on PROCO history. I mentioned to the poster that you were a retired PT guy, and that the PT community was tight knit, so you might either have some information that might be useful to him, or maybe know if any of the guys that signed the SAE paper were still around (Wally Wade in particular) so maybe he could contact one of them. But...it's been 30 years ago..... If you know anything, you might want to take a look at the PROCO string -- it's moved on down and I think it's now on page 2 of the postings.

There is a lot of commonality between the Euro Accord and the TSX interiors. You can tell from the pictures that the Instrument Panel substrate and structure is the same -- look at the shape and the center of the IP and you can tell. I can't tell if the change is just the applique or perhaps a slightly different IP cover for TSX, but either one is relatively cheap. The door trims have only minor modifications and the armrest and switches are common. The gauge cluster is different. It looks like the US and European Accord gauges might be the same with the emphasis on the larger speedometer, but the TSX gauges have an equal sized speedo and tach to emphasize a purported sporty character. Console is almost the same with a couple more doors for stowage. Steering wheel is the same with a new center which was required anyway so they could stick on the badge. All of these changes are very minor. I see no reason why Honda/Acura wouldn't continue with the minor differentiation they now use -- on the order of the Fusion and Milan. I personally like the TSX, but I think it is way overpriced considering it is effectively just a tidier 4 cylinder Accord with a fancier brand label. Since the new Accord has grown ever larger (to 194" OAL), there might be a bit more room for the TSX to survive.

Well, most of this is PR. In Australia, the auto industry is still very important; when Ford or Holden has a new locally-produced product, it is front page news. And when the Chairman of Ford (or the Managing Director of FoA) says something, it gets reported. So, Mullaly did the right thing by complementing FoA for a nice effort and there is no better complement than to say "I want one." Ford's cars are routinely shipped to other affiliates when they are relevant to potential future product. So there will be more than a few Falcons in NA for Product Development, Public Relations, and some executive use. NA engineers are already very familiar with the rear suspension, but they will be wanting to take a look at the front and running the Falcon on NA test facilities (even though Ford's worldwide test facilities are "calibrated" to be able to produce consistent results, there's nothing like the real thing). If there is a merging of Mustang and Falcon or a new RWD platform, planning and engineering will need to be carefully considering the hardware with the view to potentially saving bits that work. So it's really not such a big deal.

A few comments: First, I have a high regard for Bill Osbourne. Second, I think the new Falcon is an intelligent redo with a limited budget. Not stunning, but OK, and hopefully will keep market share from deteriorating further. Third, this is why you save your studies and put them on the shelf in nice black notebooks. When the notebook is pulled off the shelf, and someone has a chance to talk to Bill, and he devotes enough time to have his questions answered by the folks who have answered these questions many times before before, the result will be the same. Many, many people have been involved in previous studies going back at least 13 years now, and I don't see anything in the environment or product plans that have changed substantially. I don't think there is any way for LHD for this generation, with the small possibility of the Middle East if Ford wants to put the Panthers to sleep sooner.

Thanks for posting. So, on the front suspension, it looks like the upper arm is virtually identical to a normal SLA, but the lower arm takes off backward from the front subframe? I'm not enough of an expert to understand the kinematics and why this is good, so if there are any more technical articles, could you please do your normal good job of posting? I'm still trying to sort out why the suspension is so much lighter. Are the new arms alloy? Overall the car is a nice redo with intelligent use of carryover parts and FoA's usual skill of putting the limited budget where the changes will be noticed the most. As well as aligning manufacturing process and, ultimately, powertrains. What some people don't realize is when you make changes like this, you can gradually merge platforms with a much smaller "big bang" major worldwide platform effort later. Next step will be so see if the front and rear suspensions will work for Mustang, work which I'm sure is going on as we speak.

JPD80, Well, this was one of the key reasons that FoE decided to go off on their own rather than pick up the CD3. A large (3.5-3.7l) powerful (265-275hp) V6 is required in the mid size sedan market in the US. If you don't have it, or if your HP is down to the competition (like the Fusion), then you get criticized, even by conservative publications like Consumer Reports. These powertrains have a high application rate -- probably ranging from 30% to 50% or so. To many customers, they represent smooth, confident performance; basically they have taken the place of the attributes of V8's in the 70's. These customers are willing to give up the mileage for always having power on tap, just like Falcon owners love the I6 with basketsfull of torque. I would think the next generation platform would come in 2011-2012 when the CD3 is due for replacement, even though EUCD will be in mid cycle. Ford could take a guts pill and decide they will go with only I4 and EBI4, but that would require nerves of steel. No matter the boost or HP, nothing beats cubes for smooth performance. And I am concerned that Mazda's 4 cylinder engines are quite raw in the NVH department and when boosted might not be so pleasant. If Ford were starting with Honda 4's, then it might be a bit less of a stretch. If a platform could be pulled together with an I-engine lineup only (like Mondeo), there would be benefits in weight, front overhang, and fuel economy that would be nice to have. But I can't imagine taking the risk of not having a V6 at this point. These cars are all getting larger with the 2008 Accord now at 194" OAL compared with Fusion at 190" OAL, and longer means heavier. To take a risk of only I-engines would mean banking on a big increase in environmental concern. Or you might take the risk if it were a key element of the plan to meet CAFE by 2020. And you would still have to figure out what to do with the Volvo S80 which also requires a V engine. The present iteration which is a EUCD (in name only I have been told) has been harshly reviewed by every magazine I have read. Maybe Ford donates a platform back to Volvo from NA and assembles in NA with Taurus?

This show car represented a vehicle that was to be the stablemate of a new Lincoln LS. It's not so far away from the actual vehicle that could have been produced (the rear doors probably wouldn't have made it). But Lincoln and the new LS program imploded. Thanks for posting the pictures; I think it still looks pretty good. But of course, you'd have to add the wave grille now.... I agree with you that, in concept, this type of vehicle is similar in nature to the new X6. And also the Infinity FX35/45 I think. I had a look at the X6 at the Detroit auto show. I guess I just don't get it. If you try to get into the rear seat, the sloping roof hits you in your face (and I'm not very tall). So you have to actually bend your neck down a lot and lean forward to get in or risk decapitation. And I personally don't like the overall styling and stance. Bloody useless auto in my opinion. Funny you mention AMC. I said to my friend "this reminds me of an AMC Eagle."

Well, most of this thread has been about power/economy which is great, but brakes are a huge issue. Ford has an overall corporate objective of "Accelerate development of new products our customers want and value" Under that objective are various items, but 2 that are particularly applicable to the Escape. The first objective is to launch smoothly the Escape and the other products coming out in 2008. The second is to increase the number of "recommended" ratings by Consumer Reports. The Escape is not recommended by CR. It scored 49 points; the highest rating was for a RAV4 at 83 points. Frustratingly, CR never breaks down their point structure, but certainly a major element was very, very poor braking. The RAV4 and CRV stop in about 135 feet dry and around 140 wet. The Escape recorded 161 dry and 215 wet. CR was so shocked they got another Escape to test but got the same results. This type of performance isn't going to hack it, and I'm sure Mulaly won't stand for it.

True on the ownership percentage. Mazda pays Ford dividends based on its bottom line profitability (not revenue) and Ford's equity share. It's really hard to say exactly how much, if any, of the purchase price of a particular product would be coming back to Ford. Even if you knew the profitability of a particular model, that profit would not account for other costs such as overhead, product development, Mazda's Marketing and Sales activity, etc. But any Mazda sale contributes in some way to their bottom line. Fortunately, Mazda is profitable right now.

The major stumbling block for the C170 vs. C1 Focus was not the variable cost, but the required investment to move to the new platform. When a product is below water from a profit standpoint, it's very difficult in the Ford world (or any world for that matter) to justify investment in a new product. Some estimates didn't show any improvement in revenue with C1 (i.e, no increase in volume or revenue); whether this premise is correct or not has certainly been debated on this board. There are some decisons you just have to make because it's the right thing to do, not because the decison is fully justified by the numbers.....

Biker, I fully agree with you. Ford has had a habit of keeping old cars around when the new car is introduced. Examples include the Escort (it was done twice I think), and Taurus which hung on for waaaaay too long. From Ford's standpoint, it might "look good on paper" because it is incremental sales with existing facilities and minimal investment, but there is a huge negative knock-on effect downstream. It causes confusion in the dealer showroom and with customers. The sales people will continue to push the cheaper, older product when they should be walking the customers to the new product. Product changes should be done in a crisp, clean manner and communicated effectively to the dealers and customers. As Richard said, probably not a problem this time around due to facility limitations.

I just see this statement in simple terms. What he's really saying is that Ford will not engage in outrageous interest rate subvention, rebates, or fleet dumping just to keep plants full during a year when auto sales are likely to be trending down. Not to say there won't be some incentives, but probably at today's level. I think it's really just a signal to GM and others including the UAW.

I concur with everything you have said. Sue and Ben pulled hard on the rope for a lot of years. Maybe not as glamorous as some higher-flying folks, but they actually did the work. I hate to see them go to Chrysler. They might have had a deal too good to pass up, or they might have been frustrated. Who knows. Ford still has a management issue in Product Development. Still too much "cult of the personality" imho.

True, but if exchange rates keep going the way they are and if CAFE fines increase, then it might become an economic necessity for these firms to become full line manufacturers. If they don't then their sales will slump as prices are driven higher. I think Porsche sees the handwriting on the wall, and that's one of the reasons they are out to get VW. BMW got burned big time trying to be a full line manufacturer with Rover/Land Rover. Lately they have been saying they are fine where they are. Maybe they are for now, but in 2020 with 35 mpg requirement? Same with Mercedes. Hmmm. I wonder if Fiat might be in play again?

A couple of points: . CAFE is a civil penalty in the U.S. That means that, like a parking ticket, you can go ahead and violate the fuel economy requirements and pay the fine. You won't be prevented from manufacturing vehicles and selling them, and you won't be thrown into jail. . The domestic manufacturers have never paid a CAFE penalty to my knowledge. There are a couple of main reasons. First a general belief that they would have been blasted in public by the government and the press (particularly when the Japanese also do not pay fines). But most importantly, paying the fine might have subjected the company to nasty shareholder lawsuits for management not acting in the company's best interest (something the Germans don't seem to worry about). . It's a lot of work to ensure that CAFE is met. And you have to manage two car fleets -- domestic and foreign. So besides the basic product offerings and taking advantage of benefits like offering E85, there is sometimes some "pushing and pulling" of model year designations to smooth the numbers. In an extreme case of playing to the rules, the CV/GM were once included in the foreign fleet (before NAFTA) by adding enough Mexican content to qualify. . I need to do some more reading on the recently passed legislation. The original discussions were going to exclude any manufacturer with less than 0.4% market share (about 64k annual volume). This would include Porsche, and LR and Jag if they weren't part of Ford along with a slew of other smaller players. I seem to remember that the "Porsche exemption" got stripped from the legislation -- maybe part of the reason why they seem so anxious to take over VW. . The Nissan exemption was I think granted a until 2013. It is not an exemption from meeting CAFE standards, but permission to combine their import and domestic fleets as they were out of balance due to the Sentra being put in the domestic fleet under NAFTA. As I mentioned, managing two fleets is not easy. . I have absolutely no idea how the higher volume German luxury players are ever going to meet upcoming CAFE standards. They aren't full line manufacturers and there isn't enough demand for Mini's and Smart's to even get them close. Weight/engine technology only gets you so far. I'm guessing that the fine structure will be increased, so they could be in for a difficult ride.

Wixom is a horrible plant. Too big. Too many lines, some of which criss-cross each other. Huge fixed costs to operate. All the equipment except for the paint plant is now obsolete. No car program can be profitable in this plant as it is presently configured, and I don't think it will ever be used again. In the case of the Town Car, it would have been the sole remaining product at Wixom. It's virtually impossible to run a plant that has a capacity approaching 300k with only 30k or so annual production. Not to mention that product would take a huge financial loss. So the choices were either 1) drop it or 2) move to St. Thomas. I think the decision was made to drop, but Ford management got their ears bent by the limo and livery guys. After all, a good number of them base their business solely on this platform. So it was moved, and I don't think it was so trivial, as there were 4 unique wheelbases among the Panthers (2 in Wixom, and 2 in St. Thomas). And the front structure of the TC is somewhat different than the CV/GM. So who knows whether the move was financially justified?? Probably breakeven at best considering the low and declining volume. But it does help the critical mass of St. Thomas on one shift until this platform runs its course.