Toyata bracing itself for 31% drop in profits

[NickF1011]

Locally grown vegetables from the Farmer's Market at $5 per lb versus the same quality vegetables at the local grocery store imported from South America at $4.50 per lb. Do you support the local farmers or do you save $0.50 per lb?

 

If I'm near the farmer's market and I need vegetables I'll stop occasionally. More often, it's a matter of convenience to just get them at the grocery store -- even if they cost more.

 

Do you buy a new wireless router from Best Buy where they employ locals and pay local taxes or do you order it from NewEgg.com where it's $10 cheaper?

 

Again, depends on convenience. If I'm headed to Best Buy already for something else, I'll get it there. If not, I'll probably order it online.

 

Do you buy a new vehicle from your local dealer or do you buy from an out of state dealer in order to save $100?

 

I bought at a somewhat local dealer (there were others far closer though). My co-worker just drove out of state for his new truck though.

 

My entire point is you should consider the benefits and side effects of your purchasing decisions and not just base it ONLY on price.

 

It's like telling people not to overfish an area but they don't listen. They catch too many fish and pretty soon there are no more fish to be caught. People don't see or understand or care about the consequences until it's too late. It's all ME ME ME and NOW NOW NOW.

 

The other part you are missing (and a part that matters quite a bit to me) from this equation is convenience. People like one-stop shopping. They don't want to drive to the farmer's market for their vegetables, then to the local butcher for their steaks, then to the local hardware store for charcoal for ther grill. If they can grab all of this stuff in one place (like a Super Wal-Mart), then woohoo! The fact that it costs less too? Hey, what a bonus!

 

Honestly, I usually don't do a whole lot of comparison shopping, so a few cents here and there isn't going to make any difference to me, but I definitely do convenient shopping.

[akirby]

The other part you are missing (and a part that matters quite a bit to me) from this equation is convenience. People like one-stop shopping. They don't want to drive to the farmer's market for their vegetables, then to the local butcher for their steaks, then to the local hardware store for charcoal for ther grill. If they can grab all of this stuff in one place (like a Super Wal-Mart), then woohoo! The fact that it costs less too? Hey, what a bonus!

 

Honestly, I usually don't do a whole lot of comparison shopping, so a few cents here and there isn't going to make any difference to me, but I definitely do convenient shopping.

 

Convenience is fine. But you don't go out of your way looking for the absolute lowest price on something and that's what I'm talking about.

 

I'll stop beating the horse now.

[Ford Jellymoulds]

Good luck with that then. It runs counter to logic. Same quality, higher price? No thanks.

 

You have not had any kids yet Nick?

 

I bet the poor buggers that you have sometime in the future will have a bedroom full of cheap ching chong crap Chinese toxic toys.

 

You tight bastard.

[F250]

Competition from another person who opens a fruit stand. If the only choice for local consumers is $8/bushel apples then that's an opportunity for someone else to open a stand selling the same apples for $5. That will force the others to follow suit.

 

I am talking about supplier competition not a new retailer and you know it. The retailer selling apples does not have to try to compete with foreign competition only other local retailers...that is a luxury his supplier does not have. Now if you the retailer are choosing apples from 3 regional farmers that is competition, they are all Americans working to earn a living here the same as the retailer.

 

 

Outsourcing is typically done to keep prices from being raised, not to reduce current prices. Or it's done to lower prices to gain a competitive advantage. In neither case does it generate bigger profits that go into the pockets of the corporation. I realize some people think that way but they've never been involved in that scenario and are simply ignorant of how things work in the real world.

 

Again, The outsourced content of an F-150 has increased by 25-30% yet the retail price has also increased. In this relevant example the customer is paying more and the foreign outsourced parts have reduced production cost so yes the money simply increased profit margin at the expense of American jobs.

[F250]

I'm saying we should support local businesses wherever possible even if it costs a little more because it indirectly benefits you and everyone else in your city or county. Even corporate franchises employ locals. I'm not suggesting you should pay double or you should support any business with bad service.

 

And I'm saying we should extend that to buying domestic goods over imported goods wherever possible under the same principles.

 

Here's a simpler example - you're buying a shirt in a department store and there are 2 virtually identical shirts. One is made in china for $30 and another one is made in the U.S. for $35. Which one do you buy?

 

If only Ford executives could see the same benifit in buying or dare I say it, manufacturing the parts to build vehicles here. Example: the speakers in my F150 say made in China on the back, how many trucks does Ford sell multiplied by at least 4. Who knows, the Americans Ford hires to manufacture the speakers for their trucks might just turn around and buy a new Ford! As a side benifit those speaker plant workers earning a living wage can also go out and buy apples from you, then you can earn the money to buy a new Ford...and so on...and so on.

[akirby]

Again, The outsourced content of an F-150 has increased by 25-30% yet the retail price has also increased. In this relevant example the customer is paying more and the foreign outsourced parts have reduced production cost so yes the money simply increased profit margin at the expense of American jobs.

 

You don't know that outsourced content is cheaper. It's a complex equation having to do with production capacity, access to raw materials, ability to deliver on time and don't forget that Ford is a global company selling vehicles in other countries, especially Europe. So it's not as simple as "they're outsourcing parts to save money". Another ignorant assumption from someone who doesn't understand how businesses work.

 

If only Ford executives could see the same benifit in buying or dare I say it, manufacturing the parts to build vehicles here. Example: the speakers in my F150 say made in China on the back, how many trucks does Ford sell multiplied by at least 4. Who knows, the Americans Ford hires to manufacture the speakers for their trucks might just turn around and buy a new Ford! As a side benifit those speaker plant workers earning a living wage can also go out and buy apples from you, then you can earn the money to buy a new Ford...and so on...and so on.

 

You totally missed my point. Ford has to compete with other mfrs that are cutting costs so to stay competitive Ford has to do the same type of cost cutting (and not necessarily outsourcing).

Why does Ford have to compete on price? Because that's all most buyers care about. They don't care where the parts come from or where it's assembled and they're NOT going to pay a premium for the privilege of having a 100% domestic content assembled in the U.S.A. vehicle. That's my point - if consumers were willing to pay for it then there would be a market for it and mfrs would be filling that market.

 

It all starts (and ends) with the consumer and what they're willing to spend their money on (or not spend it on). Period. The mfrs don't really have a choice if they want to stay in business outside of some niche products.

[F250]

You don't know that outsourced content is cheaper. It's a complex equation having to do with production capacity, access to raw materials, ability to deliver on time and don't forget that Ford is a global company selling vehicles in other countries, especially Europe. So it's not as simple as "they're outsourcing parts to save money". Another ignorant assumption from someone who doesn't understand how businesses work.

 

 

 

You totally missed my point. Ford has to compete with other mfrs that are cutting costs so to stay competitive Ford has to do the same type of cost cutting (and not necessarily outsourcing).

Why does Ford have to compete on price? Because that's all most buyers care about. They don't care where the parts come from or where it's assembled and they're NOT going to pay a premium for the privilege of having a 100% domestic content assembled in the U.S.A. vehicle. That's my point - if consumers were willing to pay for it then there would be a market for it and mfrs would be filling that market.

 

It all starts (and ends) with the consumer and what they're willing to spend their money on (or not spend it on). Period. The mfrs don't really have a choice if they want to stay in business outside of some niche products.

 

Thanks for calling me ignorant.

How about you back up some of you f...ing theory with proof or examples.

Here's one the F150 competes with the Toyota Tundra. Both built here except the F150 now has only 60% domestic content vs the Tundra's 80%. This sadly is a new development as the F-Series had over 80% domestic content in the first oh, 55+ years of its production! Both vehicles are competitevly priced. The F150 vastly outsells the Tundra (which should bring the price down a bit) and it is generally known the F-Series has always made a lot of money for Ford=very profitable. So why did Ford shut down it's established suppliers and buy foreign if it wasn't just cheaper? If you have facts feel free to fill in the blank here.

 

You could argue but not prove that Toyota looses money on every Tundra it sells owing to higher US content but their bread and butter, their high volume profit vehicle is the Camry. Now shall we compare the top of the sales charts Camry (80% US content) and US assembled vs the Ford competitor the Fusion (20% US content) and Mexico assembled.

 

If US content and US assembly is not important to buyers why does Toyota constantly advertise (and invest in) their American operations.

 

The above content percentages ca be found at gov AALA report My link

[NickF1011]

You have not had any kids yet Nick?

 

I bet the poor buggers that you have sometime in the future will have a bedroom full of cheap ching chong crap Chinese toxic toys.

 

You tight bastard.

 

Enough of the racist remarks from you.

[NickF1011]

Convenience is fine. But you don't go out of your way looking for the absolute lowest price on something and that's what I'm talking about.

 

I'll stop beating the horse now.

 

I was at the liquor store last night and picked a bottle of Boordy riesling, made right here in Maryland. So I do support the local economy on occasion after all. :lol:

[akirby]

Thanks for calling me ignorant.

How about you back up some of you f...ing theory with proof or examples.

Here's one the F150 competes with the Toyota Tundra. Both built here except the F150 now has only 60% domestic content vs the Tundra's 80%. This sadly is a new development as the F-Series had over 80% domestic content in the first oh, 55+ years of its production! Both vehicles are competitevly priced. The F150 vastly outsells the Tundra (which should bring the price down a bit) and it is generally known the F-Series has always made a lot of money for Ford=very profitable. So why did Ford shut down it's established suppliers and buy foreign if it wasn't just cheaper? If you have facts feel free to fill in the blank here.

 

You could argue but not prove that Toyota looses money on every Tundra it sells owing to higher US content but their bread and butter, their high volume profit vehicle is the Camry. Now shall we compare the top of the sales charts Camry (80% US content) and US assembled vs the Ford competitor the Fusion (20% US content) and Mexico assembled.

 

If US content and US assembly is not important to buyers why does Toyota constantly advertise (and invest in) their American operations.

 

The above content percentages ca be found at gov AALA report My link

 

I didn't say you were ignorant - I said you made an ignorant assumption. Not the same thing. Ignorance in this case is not understanding that there are many factors that go into where a component is sourced from and cost is just one of those factors (and probably not the first one).

 

MSRP, domestic content and sales volume doesn't prove anything one way or the other. You'd have to look at specific parts and costs which none of us have access to.

 

Of course domestic content and country of mfr makes a difference to some buyers. I never said it wasn't important or good - I just said that it's not always done just to reduce the cost of a part to generate more profit.

 

Here is an example. Let's say one of the F150 parts used to come from a 3rd party supplier who had a factory in the U.S. but the factory was underutilized so they shut it down. Ford still gets the same part at the same price but it's imported from that suppliers' existing factories in other countries.

 

Or the raw materials for a particular part are only available in a specific country in Europe and the part is used globally so Ford decides to build the part in Europe to save money on raw material transportation costs. It may actually cost Ford more money to ship the part to the U.S. but overall it's cheaper for Ford to do it that way than to build a new plant in the U.S.

 

It's just not as simple as you think it is.

[F250]

 

MSRP, domestic content and sales volume doesn't prove anything one way or the other. You'd have to look at specific parts and costs which none of us have access to.

 

Of course domestic content and country of mfr makes a difference to some buyers. I never said it wasn't important or good - I just said that it's not always done just to reduce the cost of a part to generate more profit.

 

It proves other manufacturers can assemble vehicles here in the US with 80% American made content and sell those vehicles in this market at competitive prices.

I would like Ford to do that as well since they are an "American" company. It is clear by their actions that putting Americans back to work and investing in their home economy is not a priority for Ford executives.

 

Here is an example. Let's say one of the F150 parts used to come from a 3rd party supplier who had a factory in the U.S. but the factory was underutilized so they shut it down. Ford still gets the same part at the same price but it's imported from that suppliers' existing factories in other countries.

 

Or the raw materials for a particular part are only available in a specific country in Europe and the part is used globally so Ford decides to build the part in Europe to save money on raw material transportation costs. It may actually cost Ford more money to ship the part to the U.S. but overall it's cheaper for Ford to do it that way than to build a new plant in the U.S.

 

It's just not as simple as you think it is.

 

Again, it seems Toyota and other competitive manufacturers are not having a problem sourcing parts and assembling vehicles here in the US.

 

Look, I understand Ford Motor Company was on the brink of financial collapse a few years ago...a situation which was caused by poor executive decisions going back to the '90's not production / sourcing. The current managment is doing a good job turning the company around starting with dumping all of those Eurotrash brands that never should have been purchased. But if they continue to knife American suppliers Walmart style and shutter assembly plants (2 more go down this year-1 here 1 in Canada) the "way forward" looks like it will result in a Ford that is simply a marketing company, unable to either design or build much of anything in the country of it's world headquarters...if the trend continues

 

edit: I'd wager there are a lot more Asian and Mexican parts on most Fords assembled here than European. But the only non maintenance part I have had to replace on my truck is ironicly the large (Ford) emblem on the grill and tailgate. The clear outer cover seperates from the blue background. Those emblems are made in Italy and retail for about $40 each.

Edited June 23, 2011 by F250

[Ford Jellymoulds]

Chevys crap Cruze or runaway deathtrap Camry is living proof that crap sells well if its "Made in the USA" not Mexico.

 

Ford should build everything it sells in North America in North America it should be perk of being Ford Motor Company a great American icon company.

[akirby]

It proves other manufacturers can assemble vehicles here in the US with 80% American made content and sell those vehicles in this market at competitive prices.

 

Again, it seems Toyota and other competitive manufacturers are not having a problem sourcing parts and assembling vehicles here in the US.

 

Ford makes the Focus in the U.S. Toyota shut down their U.S. Corolla plant.

 

Ford sells between 500K and 1M F-series trucks per year - just in North America. None of the imports come anywhere close to that kind of volume.

 

And if you don't think some of that "domestic content" in Toyotas and Hondas is smoke and mirrors you're dreaming.

 

 

If you want to think that the only reason Ford dropped their domestic content percentage was to save a few bucks on parts then go ahead and believe that. But I'm telling you it's WAY more complicated than that.

[kenp77]

Ford makes the Focus in the U.S. Toyota shut down their U.S. Corolla plant.

 

Ford sells between 500K and 1M F-series trucks per year - just in North America. None of the imports come anywhere close to that kind of volume.

 

And if you don't think some of that "domestic content" in Toyotas and Hondas is smoke and mirrors you're dreaming.

 

 

If you want to think that the only reason Ford dropped their domestic content percentage was to save a few bucks on parts then go ahead and believe that. But I'm telling you it's WAY more complicated than that.

I am telling u F-250 is right on the money and u r full of crap, just look at fords reported profits tells the whole story, buying cheap foreign crap parts and putting them on their trucks and selling for sky high prices!!

[F250]

Ford makes the Focus in the U.S. Toyota shut down their U.S. Corolla plant.

 

To be accurate the plant you are talking about is NUMMI and it was an old GM plant in California that Toyota helped re-open and operated jointly with General Motors. When GM went bankrupt they pulled out of NUMMI, Toyota moved Corolla production to Canada at that time.

 

Ford sells between 500K and 1M F-series trucks per year - just in North America. None of the imports come anywhere close to that kind of volume.

 

Yes, and like I said Ford kept the F-Series over 80% domestic for 6-decades which means they had established fully utilized suppiers here that they walked away from.

 

And if you don't think some of that "domestic content" in Toyotas and Hondas is smoke and mirrors you're dreaming.

 

The stats come from the government just like the rest of the manufacturers.

[akirby]

I am telling u F-250 is right on the money and u r full of crap, just look at fords reported profits tells the whole story, buying cheap foreign crap parts and putting them on their trucks and selling for sky high prices!!

 

Prove it.

[akirby]

The stats come from the government just like the rest of the manufacturers.

 

There are many tricks to make imported parts qualify as domestic. And the difference between an imported transmission and a domestic transmission could be 1% (69% versus 70%).

[V8-X]

Must agree with F250 on this issue.

 

But the only non maintenance part I have had to replace on my truck is ironicly the large (Ford) emblem on the grill and tailgate. The clear outer cover seperates from the blue background. Those emblems are made in Italy and retail for about $40 each.

Interesting, as I've had this same issue on my 2006 F150. Both emblems were replaced under warranty though. I also had a one of those China made speakers replaced under warranty as well. And this 2006 was when the F150 had a higher domestic content than the Tundra, but it's the imported parts that I've had issues with. So cheaper isn't always better.

Edited June 24, 2011 by V8-X

[F250]

Must agree with F250 on this issue.

 

 

Interesting, as I've had this same issue on my 2006 F150. Both emblems were replaced under warranty though. I also had a one of those China made speakers replaced under warranty as well. And this 2006 was when the F150 had a higher domestic content than the Tundra, but it's the imported parts that I've had issues with. So cheaper isn't always better.

 

My emblems outlasted the 3/36 warranty.

The speakers have not been a problem yet I just noticed it when I removed the door panels (have to remove the speakers first) to replace the mirrors with Ford accessory tow mirrors. The over/under type with wide angle lower mirror -highly recomend if you do much towing.

[F250]

I was at the liquor store last night and picked a bottle of Boordy riesling, made right here in Maryland. So I do support the local economy on occasion after all. :lol:

 

There may be hope for you yet!

 

Not saying Ford or anyone should be held to 100% domestic purchasing, but people in this country need to wake up and realize what is best for our economy and future.

[V8-X]

My emblems outlasted the 3/36 warranty.

The speakers have not been a problem yet I just noticed it when I removed the door panels (have to remove the speakers first) to replace the mirrors with Ford accessory tow mirrors. The over/under type with wide angle lower mirror -highly recomend if you do much towing.

I've been contemplating installing the new tow mirrors. Not only will they help with my towing escapades up the hill, but they look damn cool too in my opinion.

[weiweishen]

There are many tricks to make imported parts qualify as domestic. And the difference between an imported transmission and a domestic transmission could be 1% (69% versus 70%).

Exactly. If Toyota import 80% of the parts for their engine from Japan and assemble the engine in the state, they can claim that the engine is domestic. I want to reiterate again that tsunami and earth quake in Japan has already revealed the truth. If 80% of their parts are from domestic companies, they don't need to wait for 3 month, 4 month, and 5 month to find alternative suppliers. They still cannot make enough cars now. The earth quake happened in March 13 2011. More than 3 months have passed. Don't tell me that Ford do not have enough paint. Ford already found the alternative. Edmunds, true car and JD power has already predict that this month Ford, GM and Chrysler will have double digit increase on their sale figure, Japanese company will have double digit lost. Why? No parts. In the past 50 years, Japanese companies never been so mercy to US car companies.

Just compare Nissan with Toytoa and Honda. Nissan's sales figure will increase 24% in June while Toyota and Honda's will decrease 14 to 15%. They are all Japanese companies. Why one of them did not affected by tsunami and earthquake while the other two are affected so badly. Can we concluded that Nissan use much more domestic parts than Toyota and Honda do?

Edited June 28, 2011 by weiweishen

[kenp77]

Exactly. If Toyota import 80% of the parts for their engine from Japan and assemble the engine in the state, they can claim that the engine is domestic. I want to reiterate again that tsunami and earth quake in Japan has already revealed the truth. If 80% of their parts are from domestic companies, they don't need to wait for 3 month, 4 month, and 5 month to find alternative suppliers. They still cannot make enough cars now. The earth quake happened in March 13 2011. More than 3 months have passed. Don't tell me that Ford do not have enough paint. Ford already found the alternative. Edmunds, true car and JD power has already predict that this month Ford, GM and Chrysler will have double digit increase on their sale figure, Japanese company will have double digit lost. Why? No parts. In the past 50 years, Japanese companies never been so mercy to US car companies.

Just compare Nissan with Toytoa and Honda. Nissan's sales figure will increase 24% in June while Toyota and Honda's will decrease 14 to 15%. They are all Japanese companies. Why one of them did not affected by tsunami and earthquake while the other two are affected so badly. Can we concluded that Nissan use much more domestic parts than Toyota and Honda do?

Prove it!!!