FordBuyer Posted May 30, 2012 Share Posted May 30, 2012 Mullally speak that Ford will lose market share for rest of year as other manufacturers enjoy greater sales increases year over year: Click here: CEO: Ford can't build enough vehicles to meet demand | The Detroit News | detroitnews.com 1 Quote Link to comment Share on other sites More sharing options...
2005Explorer Posted May 30, 2012 Share Posted May 30, 2012 Well that is better then having the opposite problem. All I can say is up production and build as many as they can. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted May 30, 2012 Share Posted May 30, 2012 How is this a problem? Quote Link to comment Share on other sites More sharing options...
Anthony Posted May 30, 2012 Share Posted May 30, 2012 If the only things hurting sales is production constraints, why are they boosting incentives to sell more vehicles? Sell 'em for every penny you can get if people are clamoring for them. Quote Link to comment Share on other sites More sharing options...
2005Explorer Posted May 30, 2012 Share Posted May 30, 2012 How is this a problem? Well I suppose it is a problem because if you can build more and sell more you make more $$$. Anyhow better then having the opposite problem. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted May 30, 2012 Share Posted May 30, 2012 If the only things hurting sales is production constraints, why are they boosting incentives to sell more vehicles? Sell 'em for every penny you can get if people are clamoring for them. Because Ford sells more than one product. Ford is going to lose considerable production capacity in the Escape & Fusion switchovers, whereas incentives on the outgoing Fusion and Escape, as well as the Fiesta and Focus may not have been aggressive enough to meet competitor incentives. Quote Link to comment Share on other sites More sharing options...
Deanh Posted May 30, 2012 Share Posted May 30, 2012 Well that is better then having the opposite problem. All I can say is up production and build as many as they can. in my mind theres a happy medium, right now inventories are TIGHT, we need and could sell more product, Edges with the 205a package for instance and Explorers. However, you over produce and dealers get to mauch stock and we revert to the evil ways of years gone buy, having to subsidize units to move them and that costs Ford $$$$ in the form of large rebates and subveened rates, something they have been trying to get away from. 1 Quote Link to comment Share on other sites More sharing options...
theoldwizard Posted May 31, 2012 Share Posted May 31, 2012 (edited) Because Ford sells more than one product. Ford is going to lose considerable production capacity in the Escape & Fusion switchovers, ... Full production of the new Escape is only days or weeks away. Yes, it will take months to ramp up full speed. Fusion changeover could be pushed back a few weeks if demand is stong. Edited May 31, 2012 by theoldwizard Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted May 31, 2012 Share Posted May 31, 2012 Batch & hold is going to depress 2013 inventory levels in the early going as well. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted May 31, 2012 Share Posted May 31, 2012 (edited) Mullally speak that Ford will lose market share for rest of year as other manufacturers enjoy greater sales increases year over year: Click here: CEO: Ford can't build enough vehicles to meet demand | The Detroit News | detroitnews.com This is the second thread where you continue to underscore Ford losing market share and while that may be a concern, Ford's higher average transaction prices mean that they are well into the black with low incentives but not meeting demand, great products will buy them time. We shouldn't be running around like chicken little thinking the sky is falling.. Edited May 31, 2012 by jpd80 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted May 31, 2012 Share Posted May 31, 2012 And bellyaching about declining market share in a growing market, when you're capacity constrained is just absolutely.... There are dumb things to complain about in an industry where you add capacity in 120k units, and new facilities cost over a billion dollars. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted May 31, 2012 Share Posted May 31, 2012 F Truck is key, if those babies start flying of the lot, Ford's profit will be over the top. Quote Link to comment Share on other sites More sharing options...
BrewfanGRB Posted May 31, 2012 Share Posted May 31, 2012 This is the second thread where you continue to underscore Ford losing market share and while that may be a concern, Ford's higher average transaction prices mean that they are well into the black with low incentives but not meeting demand, great products will buy them time. We shouldn't be running around like chicken little thinking the sky is falling.. Right. But, right behind FordBuyer's "You have to sell 2000 units a month for the product to be successful, unless it's a product for which I make an exception" meme is "OMG, Ford's market share is falling! That must mean they're going out of business". I think FordBuyer needs to watch more Shark Tank and Dragon's Den and listen carefully to Kevin O'Leary: "I only care about one thing: How do I MAKE MONEY?". Ford is making money. Lots of it. Therefore, they're successful. Conversation over. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted May 31, 2012 Share Posted May 31, 2012 Ford is making money. Lots of it. Therefore, they're successful. Conversation over. And by year's end Ford will be building many more vehicles. Wow, just the thought of every Ford plant with three shifts gives me goose bumps... 1 Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted May 31, 2012 Author Share Posted May 31, 2012 Right. But, right behind FordBuyer's "You have to sell 2000 units a month for the product to be successful, unless it's a product for which I make an exception" meme is "OMG, Ford's market share is falling! That must mean they're going out of business". I think FordBuyer needs to watch more Shark Tank and Dragon's Den and listen carefully to Kevin O'Leary: "I only care about one thing: How do I MAKE MONEY?". Ford is making money. Lots of it. Therefore, they're successful. Conversation over. Worldwide, Ford has about $80 billion in unfunded pension liabilities and about $40 billion in market cap. So glass can be half empty or half full depending upon how you want to twist your facts. Anyway, the story at Ford certainly has its positives as Ford appears headed in right direction, but still lots of negatives also. And if you don't like the two Detroit News stories out yesterday on Ford, write them and complain, not me. 1 Quote Link to comment Share on other sites More sharing options...
akirby Posted May 31, 2012 Share Posted May 31, 2012 Worldwide, Ford has about $80 billion in unfunded pension liabilities and about $40 billion in market cap. So glass can be half empty or half full depending upon how you want to twist your facts. Anyway, the story at Ford certainly has its positives as Ford appears headed in right direction, but still lots of negatives also. And if you don't like the two Detroit News stories out yesterday on Ford, write them and complain, not me. Debt is almost gone, they're making billions in proft while still investing in new products, credit rating is back along with the blue oval, incentives are down, plant utilization is up. The only negatives are in your mind. Quote Link to comment Share on other sites More sharing options...
97svtgoin05gt Posted May 31, 2012 Share Posted May 31, 2012 Pension liabilities plague just about every company that is as old as Ford. I'm sure they're well aware and have plans in place. Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted May 31, 2012 Share Posted May 31, 2012 Pension liabilities plague just about every company that is as old as Ford. I'm sure they're well aware and have plans in place. Agreed. It's not like they haven't been continuing contributions to it this whole time. Quote Link to comment Share on other sites More sharing options...
akirby Posted May 31, 2012 Share Posted May 31, 2012 This is a big reason companies are moving to cash balance pensions - it's a known one time cost rather than an open ended liability that changes as people live longer. Quote Link to comment Share on other sites More sharing options...
aneekr Posted May 31, 2012 Share Posted May 31, 2012 Ford is making money. Lots of it. Therefore, they're successful. Conversation over. Conversation is hardly over. Beyond the operations management issues described in the Detroit News article, European losses and slowing demand in the Asia-Pacific region conspire to limit earnings growth YoY. Even in North America, sensitivity to macroeconomic factors needs to be acknowledged. What is your prediction for full year EPS estimates on F? I'm betting it will be closer to $1.40 than to $1.55 which was predicted in the early part of the year. For F options expiring in June, I'm long on the $11 and $12 puts. 1 Quote Link to comment Share on other sites More sharing options...
Edstock Posted May 31, 2012 Share Posted May 31, 2012 (edited) For F options expiring in June, I'm long on the $11 and $12 puts. As a former broker, ya gotta do what ya gotta do. IMHO, the "objective conditions" (lovely Marxist phrase) of the world economy are such that Nasim Taleb's "Black Swan" could still appear on the horizon, which could make the scheming over puts and calls irrelevant. Were I doing long-term (5+ years) Ford planning, I would be tempted to accept a loss of market share over the short-term if it means avoiding massive capital expenditure in expanding production plant installations that could be wasted if the world business economy tanks. As well, 5+ years out, the way cars are made and the materials they are made from are going to be changing. Remember, we have never lived in an electronic economy before, and nobody really knows what its ground rules are, or how intrinsically stable it is. Finally, remember, puts and calls speculation is exciting, but in the final analysis, it's all about the product, not technical market analysis, or staring at chicken guts or any other way of divination. If Ford gets the right product, buy shares and park 'em. Simple, really. Edited May 31, 2012 by Edstock Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted May 31, 2012 Share Posted May 31, 2012 Worldwide, Ford has about $80 billion in unfunded pension liabilities and about $40 billion in market cap. Those items aren't even remotely comparable. You might as well say, "I have 35 ducks, but I owe farmer Brown 50 carrots." Quote Link to comment Share on other sites More sharing options...
jpd80 Posted May 31, 2012 Share Posted May 31, 2012 (edited) Conversation is hardly over. Beyond the operations management issues described in the Detroit News article, European losses and slowing demand in the Asia-Pacific region conspire to limit earnings growth YoY. Even in North America, sensitivity to macroeconomic factors needs to be acknowledged. What is your prediction for full year EPS estimates on F? I'm betting it will be closer to $1.40 than to $1.55 which was predicted in the early part of the year. For F options expiring in June, I'm long on the $11 and $12 puts. I doubt you could find a time in the last 10 to 15 years where prosperity in the global regions have coincided. I think this is key to Ford an others prosperity, the ability to cast wide nets and reap profits in areas where the market is improving whilst being able to control costs in flat or falling markets. Even though Europe, South America and Asian incomes are negative for Ford, they are not big negatives and the revenue generated in those regions makes you wonder whether a lot of the otherwise profit is being redirected into either production expansion or product development in changing times. Edited May 31, 2012 by jpd80 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted May 31, 2012 Share Posted May 31, 2012 (edited) Those items aren't even remotely comparable. You might as well say, "I have 35 ducks, but I owe farmer Brown 50 carrots." Again Fordbuyer is not telling the whole story. At the end of 2011, Ford's Worldwide pension liabilities was $74 billion - that's correct but only underfunded by $15.4 Billion, not the $80 billion he implies. And I'd bet that Ford will make up that shortfall in the next few years. LINKAt the end of 2011, the gross pension liabilities of both GM and Ford rose to record levels, Citi analyst Itay Michaeli said. Ford finished 2011 with a global pension obligation of $74 billion, nearly double the company's $40 billion stock market value. Ford's global pension plan was underfunded by $15.4 billion as of end 2011. This shortfall, which widens and contracts based on asset returns and interest rates, is typically viewed as debt by credit ratings agencies. Edited May 31, 2012 by jpd80 Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted May 31, 2012 Author Share Posted May 31, 2012 I never mentioned or implied that Ford will have to increase incentives significantly to keep or increase its market share. The article states basically that Ford miscalculated on the conservative side what U.S. auto sales would be this year, and thus was too slow to add extra shifts. So now they will pay with reduced market share that is harder to increase than to lose. That is a fact, and not a positive no matter how you twist it. It would be like me owning a Soft Serve Dairy Queen, calculating way too conservatively after listening to Limbaugh all winter on radio, and ordering less custard than I did last year, and then have to turn away customers because I can't meet unexpected increase in demand. You still make money, but not as much as you could for your yourself and family if you had not been so conservative in your estimates. Ford must have known that this spring selling season would be good, and waited way too long to add second and third shifts. Fields admitted that it will be end of year and winter before Ford can significantly increase production. Missed opportunity. 1 Quote Link to comment Share on other sites More sharing options...
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