iamweasel

Yeah, having an engine there helps that situation, but that's just one part. (Albeit a big one.) It's all the other parts that nickel and dime you to death. There are thousands of parts to account for and most still come out of the midwest.

I'm not buying the theory that moving production to Mexico will help make a vehicle line profitable. In fact, I'm on the opposite side of that fence - moving to Mexico actually makes it more expensive in many cases. Why? The silent killer known as freight. (Inbound and outbound.) When I was on F-150 my group did the financial analysis on closing Norfolk and figuring out where to move that production. (Mexico or Dearborn. Obviously the latter won - not just because of $$, though.) While we would have saved $500 per truck on assembly by moving it to Mexico, which is BIG dollars when multiplied by 550,000/units per year, most of the supply base was in the midwest so the inbound freight costs from there to Mexico far outweighed the costs of sending those parts to Dearborn. Of course outbound freight for the trucks went up, too, so that $500 savings evaporated quickly, and then some. Problem is, for some reason, outbound freight costs were always "below the (gross) line" and many execs made decisions without paying attention to those freight costs. (That's what you get from execs who came up in Engineering or Marketing, with no Finance background.) In addition, when doing comparisons they would not assume the correct piece costs on the parts - they would think a widget costs $25 per truck regardless, where in reality that part would raise to $28-30 if you moved it to Mexico due to the additional inbound freight being added-in. All the other Ford plants there were set up as export bases, not put there because of cost savings, per se. If you export from Mexico to South America, for instance, the taxes/tariff's were a lot less than exporting from the US. Lastly, from what I hear from the Daimler folks I work with, the 2 plants there did not yield the expected savings there and has brought numerous headaches that go with cross-border production. Almost all of those Mexico-built Freightliner's are coming back to the US - not being exported anywhere.

I cannot speak how the innerworkings on the Accounting side are now, but when I was there every vehicle line had their own P&L - it just wasn't reported that way publicly. Each vehicle line was consolidated together and reported as a group, sometimes split into car & truck groups for instance. One reason for this is to hide low performers in a given group. (We DID NOT want to show F650/750 separately that's for sure....) So splitting EV's into a separate group is no big deal, no different than how sometimes Ford will report "SUV's" as a group on certain things.

I'm not real sure about that, honestly. All I can say, from my time there and being in a few meetings with him, when it came to the proposal to shut down F650/750 when we knew Blue Diamond had to end he was mostly concerned about cutting jobs/departments, how it would be received in the press/public, etc. It wasn't as much about the dollars and cents. Bill was a super-nice guy (and still is by all accounts)....but too nice to run that company, honestly. He would not make some of the tough decisions that needed to be made, when they needed to be made. (Such as getting rid of Hackett....that guy was a train wreck from Day 1 and everyone knew it. But they were personal friends so that's why it took so long to get rid of him.)

Well let's not forget the new BEV Product Development chief Doug Field, the "outsider" from Tesla/Apple, is probably the key in all of that and he started his career at Ford. (6 years as an Engineer.) Tesla and Ford both had some really good habits and some bad ones. Time will tell if he picked up the good ones or bad ones from each. Ford's product development system/playbook is top-notch. The issue is staying on-script and that is determined by the PD leader. I remember going from Phil Martens (moron) to Derrick Kuzak (wonderful) and how much of an impact that had when I was there.

Honestly, this whole concept of "splitting in two" is just to appease wall street since so many investors wanted a spin-off. This is a compromise position making it seem like the BEV side will be on their own when in reality, behind the scenes, they aren't really doing anything that much different than before. (The EV's already had some separation, just like the F-series crew is separate from the Bronco folks.) It's like people think Ford goes out of their own way to purposefully create redundancy in the company. Trust me, that is far from the case.....where it makes sense they have people dedicated to specific things (engineering, where each vehicle line is relatively separate and/or paired with chassis-mates) and they also have generalists when needed (such as certain funcions in operations, finance, purchasing, etc.) As far as the F-650/750 go I am hearing there is a big divide in the company on what to do. Some want to disband the product altogether (not worth the headaches given the small volume and negative profit) and others want to use BEV to re-imagine the medium and possibly heavy truck side. Problem is, those in that latter category are not the high level people **BUT** the ground level support is what kept the F-650/750 alive after Blue Diamond. Many of the execs wanted to kill it back then, too, but ultimately let it continue for a number of reasons. In a couple months I go on an annual golfing weekend with my buddies in Michigan and 3 of them are fairly high level Ford guys who've been there over 20 years. (Friends from grad school and we all worked at Ford together until I left.) I always get caught up on the latest Ford gossip on that trip so I look forward to seeing what the latest hot topics are.

That International is pretty inefficient, actually. The Freightliner equivalent (eM2) has double the range of the International. Cost-wise, the chassis prices for the "e" trucks are expected to be about double of what a diesel chassis costs. Not sure on the medium duty trucks, but a sleeper Freightliner eCascadia weighs about 4,000lbs more than a conventional diesel truck and the government allows a 2,000lb weight exemption on the bridge chart gross, so your net payload loss is 2,000lbs.

Well that confirms my experience working in the industry - most people who are actually in charge of buying medium duty trucks don't really know what they are doing.

Certainly having an agreement with a customer, and then after-order going back for a price increase (when the actual dealer cost of that product is not changing), is not something dealers should be doing and I have no issue with Ford trying to eliminate that practice. That's why I tell everyone I know who is ordering a vehicle to get a signed buyers order with both signatures on it. (Customer and dealer.) I actually just had this happen to me last month. I ordered a Bronco Sport for my wife in August and then 2 weeks before it came in I was talking to the salesperson about something and he was like "oh, by the way...." (They tried to add $2K to my price - they didn't want to sell it to me at X-Plan anymore.) Ended up talking to the GM and told him I expect them to honor our signed buyers order, which he did.

I don't see anything wrong with dealers selling above MSRP if a customer is willing to pay it. How is this different than homes being sold above asking prices? It's supply and demand.....if the demand warrants it, no harm in dealers selling them for whatever someone will pay. If Ford wants to hold dealers down to MSRP in the good times, then Ford should reimburse dealers for selling anything short of MSRP in slower times. You can't have it both ways. Ford (and everyone else) has also been squeezing the delta between dealer cost and MSRP over the years, anyway, lowering the gross profit % on most vehicles along the way. And now, when dealer sales are going to be down 25% because the OEM's are struggling to produce vehicles, getting "extra" grosses on the cars you do get is the only way for a dealer to maintain the same level of profitability.

I think I mis-spoke. I was thinking class 6-7 as that is what I'm always looking at, as not many people really separate class 6 into it's own category because it doesn't really make sense to do so. Class 6-7 should always be reported together as they are basically the same trucks. In Class 6-7 combined, Freightliner has about 40% market share there. International is #2 then Ford.....

That's not true, Freightliner outsells Ford 2-to-1 in class 6. (Sometimes 3-to-1.) International also sells more than Ford and so do the PACCAR twins most times if you add them together. Ford is the only one of those offering a gas engine in class 6, too. When you pull those out of the mix, Ford really struggles to compete in class 6. In class 7, I don't believe that is dependent on class 8. It is far more connected to class 6, but to compete in class 7 you need the right cab, engine, transmission, numerous buildable combinations/options available, and a dealer network who can support those customers. Ford doesn't compete well in any of those things.

No, he wasn't a good businessman....not in the auto industry, anyway. He was in way over his head and out of his element. He was indecisive and failed to provide clear direction. It was obvious he was not right for the job very early on. I cannot comment on whether he was good or bad for Steelcase.

I'm sorry but that has nothing to do with Jim Hackett. That guy was as clueless as it gets.......I don't know anyone inside the company who had a good thing to say about him.

Right. Whenever I hear people discussing fleet sales and fail to separate rental from commercial/government I just shake my head. That's a clear sign that person doesn't have a clue....

The Maverick is one of the best bang-for-the-buck vehicles out there. Home run. We were shopping for a new vehicle for my wife and we really considered this strongly but decided on a Bronco Sport. The dealbreaker for my wife (who likes small cars) was the overall length was 3-feet longer than the Bronco Sport plus the SUV is better for us with dogs. (We have two, plus she volunteers at a dog rescue so there is more room inside for the dogs with the Bronco Sport's rear seats folded down.) So those two things cost me like $5-10K more. I think the interior of the Maverick is awesome. They didn't hide from the fact it's an entry level product but gave it enough style/function to make it work. It's not just some bland black/gray plastic everywhere. The design/colors/textures they used really made it look higher end than what it really was. This should be the poster child in the design studio on how to do an interior with a small budget.

With all due respect you are off-base about this. Much of the "reporting" that has been done regarding fleet sales paints an inaccurate picture because of: 1) Variable Marketing Accounting. Many news "analysts" tend to focus/report on the variable profit of retail vs fleet margins without taking into account variable incentives (rebates/financing) that reduce the profit of retail deals but are not used on fleet deals. Ford and other OEM's hide the data on variable incentives quite well because they don't want people to know how much they really have to discount things. For example, when Ford sells a retail Explorer with 0% financing on the financials it may show a $5,000 profit for that vehicle while a commercial sale may show a $4,000 profit, so retail is better, right? Nope...... With the commercial sale the profit is $4,000 and nothing is deducted from that. With the retail sale the profit is actually $2,000 because Ford Motor has to pay Ford Credit subvention money to "buy down" the interest rate. Ford Credit is not in the business of loaning money for free.....Ford is really who pays for it. That money is a "below the line" adjustment so it doesn't dilute the variable profit numbers shown for the Explorer. (Again, Ford doesn't want people to know how much they really have to discount some things.) 2) Fleet sales as a whole are broken down into 3 sections: Rental, Commercial and Government. When I was working in the fleet division at Ford our Commercial and Government net profit per units were actually higher than retail in many cases. Problem was, the daily rental sales, which at the time were a lot more than what Ford is doing today, pulled down the average so much that overall it showed "fleet" being less profitable than retail. The bottom line is, Commercial and Government sales were both very profitable for Ford, and that is something they do very well compared to most other OEM's.

Because they were already in the Class 8 business. All they needed to do was put a new cab on top of existing components. That's easier than someone trying to develop a new class 8 entry when you don't have one already. That being said, I don't think this will prove to be a profitable venture for them long-term. They can sell every one they make right now, just due to the massive shortage in truck supply, but when things get back to normal they will struggle to compete with that truck. Also, while Autocar's revenue is certainly less than Ford, I am pretty confident their Class 6-8 truck business is WAY more profitable than Ford. (My company sells them, too.) There is huge margins, both for Autocar and the dealers, on their cabover trucks. (Which personally, I think they are over-rated and over-priced, but there is a bit of a cult following for these and Crane Carriers.)

Well that's a 15% difference so if you consider that close, than ok. Either way, Ford spending a bunch of money on the already cash-poor F600-750 trucks to add frames, new engines, new transmissions, new axles and all the other supporting parts into the mix just isn't smart. (Especially with the limited staff they have in HQ to handle commercial trucks and a dealer network not equipped to handle it.)

Couple things: 1) Ford's frame is only rated for 50,000#.....not suitable for most tandem axle configurations. With Freightliner, I have a choice of about TEN frames to use on an M2, then even more options when you add an inner rail to the main frame rail. Possibilites are endless. 2) The B6.7 is not suitable for most tandem axle configurations, either. Most of those Baby 8's these days have 9L power. That's just two of many more factors that go into making a class 8 truck, a baby one or real one. But again, you guys need to stop wondering about all of that, anyway. Ford doesn't have a way to support those Baby 8 trucks on the parts & service side so even if they could build one, they have very few dealers ready to handle it. Most of the current dealer network selling F600-F750 are not good at doing so, and adding more product into the medium/heavy duty truck space is just not possible for Ford right now given that.

My understanding is Navistar leadership told the EPA they could eventually get the NoX requirement to 0.02 using Extreme EGR even though many engineers inside the company said they had no idea how to get there. They could only get it to 0.05. The EPA allowed Navistar to launch it at 0.05 in 2010CY/2011MY using magical emissions credits from past years that came from somewhere, and those credits were supposed to run out in 2-3 years (~2013) and Navistar was required to be at 0.02 at that time. Of course they finally fessed up and admitted they couldn't get there. (And even worse, even at 0.05 the engines were having major performance and fuel economy issues as we know.) Daimler and Cummins were PISSED about the government letting Navistar launch at 0.05. They were claiming BS on those emissions credits and Daimler even sued the EPA over it. The EPA refused to share where these credits came from because Daimler felt if Navistar somehow had credits banked than shouldn't we??? Navistar has always been the low price leader and most customers who buy from them simply focus on up front price and nothing else. They aren't typically brand loyal....they are price loyal.

I believe Roger Penske or Penske Corp has some ownership interest in Hino. (10% or something like that.) However, that was before Daimler agreed to let Penske buy some Freightliner/Western Star truck dealerships. (Premier Truck Group.) Daimler may have insisted he divest the Hino stake as they typically don't allow new dealers to come into the family unless they are 100% with Daimler. As far as payload with electric trucks you are correct in stating that is a big issue. The Feds do allow electric trucks to gross 82,000# in most states (as opposed to 80,000# max) but I'm honestly not sure how that would work on a non-CDL truck. (Do they let them gross 28K???)

I'm not sure where some of those guys ended up. The ones I knew stayed with the company and just worked on Medium Duty. As far as Navistar and EPA goes, Navistar deserved even more of a royal screwing than they got. They should have been shut down or, at minimum, told to buy all non-compliant engines and lemons back. Several of my current customers sued Navistar over their engines....and won or got hefty settlements or alternative arrangements made. Navistar knew darn well what they were doing, and that is the reason Cummins walked away from them because they told Navistar their "technology" doesn't work, yet Navistar continued down the Extreme EGR path anyway. If they reversed course and went to SCR they would have been 2 years late to market and would not have any trucks to sell in 2011/2012MY, so they decided to try and cheat the system with their own flawed engines, instead. One of my customers, who has 100 trucks and are complete morons when it comes to accounting, bought 50 lemons from Navistar in 2012/2013 and the settlement was just finished 2 years ago. What was the settlement? Given this company completely mismanages cash and has no financial sense whatsoever, they typically buy trucks from those who can magically arrange financing for them. So the settlement with Navistar was they would drop their lawsuit if Navistar sold them 50 trucks over a 2 year period, at discounted price AND agree to finance every one of them with a 5 year FMV/walkaway lease. Navistar agreed and case closed.....LOL....

Well I started in '93 and the HN-80 program would have gotten kickstarted in 90/91, most likely. It's very possible it started with an approved business plan but then 6 years later when the truck was actually being produced it yielded actuals far worse than expected. That would not surprise me, especially with some of the loose cannons in the truck division when it came to forecasting/accounting. They knew trucks, but lets just say they were not detail oriented as a group and always overpromised/under-delivered. That clan was all talk......So once the actuals start coming in, and they were dramatically worse, then the knee-jerk "oh crap lets dump this division" came in. But looking back, yes, they should have dumped it before spending a nickel on HN-80. It went from bad to worse. My point on the Baby 8 is the only way to do it and recoup your investment is to have the ability to build a large number of buildable combinations so your volume is high enough. If there was one spec that was 60% of that market you could build that one configuration and not worry about anything else (like Hino does in Class 6) but baby 8 is not like that. You need to build a wide variety of trucks in that segment and each is low volume. Companies like Freightliner can do it because they minimize investment for baby 8's by re-using parts/cabs from the class 6-7 trucks below it and the class-8 above it. Ford can't do that with no heavy class 8 trucks in their lineup. Plus, as I've said before, Ford knows they can barely compete in class 6-7 with their current dealer network, so it really makes no sense to build anything class 8 given they can't support it, anyway. This fact is HUGE. It seems simple to say "hey, just slap another axle on there and make it a tandem" but in reality a baby 8 will use a different chassis entirely. Heavier frames, larger axles front and rear, different suspension/chassis parts, etc. The current dealer network has nowhere in their Parts Departments to store these additional parts they would need. That's just one of the many issues keeping Ford away from Class 8.