New Light & Medium Duty News

[Bob Rosadini]

10 hours ago, akirby said:

Bob - I don’t think you’re listening.  HR and Finance, etc will be common - no need to duplicate anything.  Corporations do this today with separate business units.  Nothing new.

 

Having separate financial reporting AND GOALS doesn’t just appease Wall Street - it paints the true picture.  Ford Blue will focus on cost reduction and maximizing profit in a shrinking business with less new investment.  Margin is the goal and all those legacy ICE costs go to this business unit and doesn’t burden Ford EV.   

 

Conversely Ford EV will have huge investments in new plants and new technology and won’t be as concerned with margin right now - launching new vehicles with new processes is the goal.

 

If you don’t separate the business units then you bog down EV with all the ICE process baggage.  It’s easier to start clean sheet with new factories, new products and new processes if you have a separate business unit with different leadership and goals.

 

So this has the potential for huge change if done correctly.  Farley gets it so it comes down to execution.

AK

I hear you.  My problem is I did read all the press on the ICE and EV entities as literally in essence two stand alone companies...therefore my comments on "reverse synergism"-or so it appeared to me, and then the talk about head count reductions???  In my old mind the two did not mesh....creating two distinct organizations and at the same time reducing head count.

As always an education here.

[Joe771476]

I see Connecticut is going to adopt California emission guidelines for medium duty trucks. Last I knew, school buses fall in this category. I can't wait for the taxpayers to foot that bill when the school bus companies submit their contracts to municipalities!

[iamweasel]

3 hours ago, Bob Rosadini said:

AK

I hear you.  My problem is I did read all the press on the ICE and EV entities as literally in essence two stand alone companies...therefore my comments on "reverse synergism"-or so it appeared to me, and then the talk about head count reductions???  In my old mind the two did not mesh....creating two distinct organizations and at the same time reducing head count.

As always an education here.

 

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.  

[7Mary3]

On 4/1/2022 at 6:09 PM, iamweasel said:

....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....  

 

That certainly seems to be the case.  I can't help but wonder that if the $3B budget reduction from the ICE side of the business is real then vehicle programs like the 650/750 are going to be in trouble.  And in the 650/750 case it would be all the more likely if the plant that produces them is slated to be repurposed to build BEV's.  Of course moving 650/750 production back to Mexico could address these issues and make the program more viable.....

 

A move to enter the BEV medium and heavy truck market may also be a reason to keep the 650/750 around, at least from a dealership perspective.  GM (Chevy) struggled a bit re-entering the medium duty market as many of their former commercial truck dealers moved on (to Isuzu usually) after the TopKick and Kodiak trucks were discontinued.  GM currently has a BEV (and fuel cell) medium duty under development and I am sure Ford is aware of this.    

[iamweasel]

15 hours ago, 7Mary3 said:

 

That certainly seems to be the case.  I can't help but wonder that if the $3B budget reduction from the ICE side of the business is real then vehicle programs like the 650/750 are going to be in trouble.  And in the 650/750 case it would be all the more likely if the plant that produces them is slated to be repurposed to build BEV's.  Of course moving 650/750 production back to Mexico could address these issues and make the program more viable.....

 

A move to enter the BEV medium and heavy truck market may also be a reason to keep the 650/750 around, at least from a dealership perspective.  GM (Chevy) struggled a bit re-entering the medium duty market as many of their former commercial truck dealers moved on (to Isuzu usually) after the TopKick and Kodiak trucks were discontinued.  GM currently has a BEV (and fuel cell) medium duty under development and I am sure Ford is aware of this.    

 

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.  

Edited April 3, 2022 by iamweasel

[jpd80]

I don’t think there’s anything to be gained by uprooting any of the current production at Ohio Assembly Plant, it’s just hard to imagine Ford’s plan when it seems to keep changing every six months but in a good way…,,,

[SoonerLS]

I saw something today that I hadn't seen before--two Amazon Transit CA box trucks. I've seen Amazon drivers running box trucks before, but those were white-box rentals (Budget, IIRC). These are the first Amazon blue box trucks I've seen.

[Footballfan]

On 3/31/2022 at 9:10 PM, 7Mary3 said:

 

I would guess it's probably only going to be the 650 and 750 going to Mexico if that's indeed the plan.

The way I tend the article is that these new trucks would be SOLD in Mexico, not built there. 

[Footballfan]

On 4/1/2022 at 12:45 AM, 7Mary3 said:

 

Actually, those late Cummins powered 1980-style F-800's were built in Mexico, KTP had largely shut down for retooling in 1997.  Things were very much up in the air at that time as the F series mediums were supposed to have been replaced by medium duty versions of the HN80.  When the HN80 program was sold to Freightliner (and KTP was cleared out) some F series mediums were imported from Mexico to fill the gap.  They were all single axle Cummins B5.9 powered with very limited options.  This went on for about 2 years before a 'new' F-650 Super Duty debuted in 2000, also a Mexican import.  That truck wasn't much more than the old F series medium with a Super Duty cab stuck on it and a few more options.  That 650 ran 2 years until it was replaced by the 'Blue Diamond' 650 and 750.

 

Yes, the UAW was indeed 'thrown a bone' when Ford took the medium duty trucks back in house and put them at OAP.  Nothing wrong with that, Ford wanted to stay in the medium duty market and the trucks had to be built somewhere, so OAP was it.  Now if Ford is planning on converting OAP to BEV's, then it makes sense to move the 650/750 to Mexico.  The UAW ought to be happy as BEV's have a much brighted future than a low volume ICE medium duty truck.  I know if I worked at OAP I would feel more secure about my job if all this turn out to be the case.

 

One other thing I have been thinking about:  If OAP is going to BEV's and the 650/750 is going to Mexico, what about the other comercial vehicles produced at OAP?  I would speculate that a possible secenerio could be something like the smaller Super Duty cab/chassis models move to KTP along with the F53 chassis.  The remains of the E series could probably be dumped now and replaced buy Transit cutaways.  Now before anyone comments about KTP's capacity, consider this:  Gasoline and diesel fuel in my area are over $6.00/gal., and I have seen diesel at $6.99.  And no one thinks the prices will come down that much.  A lot of these yahoo's that buy fully loaded Super Duty Platnum and King Ranch trucks just to tool around town in are going to dissappear and I expect non-commercial Super Duty sales to eventually take a hit.    

The F53s are built in a plant in Detroit.  They have also built cab/chassis of the F 450s.

[Footballfan]

On 4/1/2022 at 9:09 PM, iamweasel said:

 

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. 

 

  

Don't worry, by the time you meet them Ford will have changed plans a dozen times again ?

Edited April 4, 2022 by Footballfan

[Footballfan]

On 4/2/2022 at 12:26 AM, jpd80 said:

Exactly, he sees Ford as it is today and where they need to get to with being a mostly electric vehicle company, it’s like the ultimate gap analysis - what changes, what stays, what goes away. All of us are only seeing small pieces of the overall plan, just the bits Ford wants to talk about now. Internally, Ford and Farley have a clearer picture of what needs to be done, I see the division of the company as the defining point in history where Ford dedicated itself to becoming an electric manufacturer, not just add ons to existing ICE vehicles.

 

Lightning, E Transit and Mustang Mach E happening right now are objectives planned under Hackett

- Lightning built in F150 ICE plant

- E Transit built in an existing ICE plant

- Mustang Mach E  rescue of the compact BEV with C2 based tophat 

If continued, Hackett’s plan would have seen  more ICE plants upgraded to build EV versions, it was intended as a long slow roll out of BEVs while ICE versions would continue as the  main high production vehicles.
 

Strong reservation and ordering response to Lightning and MME  made Ford realise that Hackett’s plan was horribly inadequate and would never deliver BEVs at the new anticipated volumes. Farley’s acknowledgement of the need for dedicated EV plant with battery pack facility and JV with battery production is a like Ford switching to “Tesla” move right in front of us, what happens with full sized SUVs, Mid-Sized Utilities and Compact BEVs (VW MEB) are probably decided or maybe up for grabs with UAW an UNIFOR contracts. What ever happens, I suspect that Model E will probably consist of three manufacturing zones

- USA for F Series, Transit, Full sized Utilities

- Canada for Mid-sized Utilities and possibility BEV Cars (Taurus/Mustang)

- Mexico for cost sensitive Compact BEV utilities, maybe small BEV pickups and possibly compact car like Tesla 3

 

It’s clear that Ford will be evolving to facilities that look and behave like Tesla Giga plants and allied battery manufacturing facilities. For now, we have to wait and see how Ford reveals its plans and what they actually do but I suspect that the changes will accelerate beyond 2023 when labor contract negotiations are completed.

The BEV Mustang is scheduled to go into Flat Rock around 2028-29.  Im sure any sedan would be built there as well. 

[jpd80]

57 minutes ago, Footballfan said:

The BEV Mustang is scheduled to go into Flat Rock around 2028-29.  Im sure any sedan would be built there as well. 

Hold that thought, the next round of contract negotiations will have some lively and robust discuss on Ford’s future plans.
 

Let’s just say that some of the assumptions made in the past year may be changing to fit Farley’s vision of Ford Blue and Model E

[Footballfan]

58 minutes ago, jpd80 said:

Hold that thought, the next round of contract negotiations will have some lively and robust discuss on Ford’s future plans.
 

Let’s just say that some of the assumptions made in the past year may be changing to fit Farley’s vision of Ford Blue and Model E

Ford does not want to rock the boat too much with the UAW.  They have not had a strike in over 40 years and I am sure they do not want to risk one now.

 

RE: Blue/Model E, I would not be too surprised to see this ripped up in the next three years.  This century at Ford we had everything form the Way Backward, to One Ford to Fitness and other assorted restructurings.  I am not sold on "all-electric futures" even with the political pressure.  EVs will be a good chunk of the business, but not THE business.  It is shaping up as a classical bubble.  I already foresee overcapacity issues with batteries and EV companies.  Aside from Tesla, I do not see Rivian, Polestar, Lucid, VinFast, et. al all being here in 20 years.  

 

Anyone who can predict where this industry is going further than five years is either foolish or lying to you.  Remember in 2009 we were told that the days of the large SUV and Pickup have peaked, and that the standard car will now be the Ford Focuses, Chevy Cruzes, and Dodge Darts of the world.  GM and Ford converted truck plants to car plants.  What happened?  You cannot buy a compact or subcompact car from any of the Big Three.  

 

 

[jpd80]

I’m deliberately not saying too much because I don’t want to inflame a situation that does not exist yet.

[7Mary3]

Good point about inbound/outbound freight as a factor when moving production to Mexico.  However, specifically in regards to the 650/750 I am told the engine and a lot of the chassis and brake components are sourced from Mexico.  May be a different scenario than the F-150.  Regardless, I doubt we will hear anything official until after UAW contract negotiations.  

[iamweasel]

1 hour ago, 7Mary3 said:

Good point about inbound/outbound freight as a factor when moving production to Mexico.  However, specifically in regards to the 650/750 I am told the engine and a lot of the chassis and brake components are sourced from Mexico.  May be a different scenario than the F-150.  Regardless, I doubt we will hear anything official until after UAW contract negotiations.  

 

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.

[GearheadGrrrl]

Engines and other parts are easy, because you can stuff 40 or more in a 40' container. The real problem is finished vehicles because at best you can only get 10 or so current Fords into a railcar or transport. So the best solution is more flexible plants that can build more models closer to the customer. IIRC there are 5 plants currently building F series variants, what if each could build everything from the F150 Lightning electric to an FT950? Then add capability to build the Excursion, stripped chassis, maybe a cabover... 

[jpd80]

7 hours ago, GearheadGrrrl said:

Engines and other parts are easy, because you can stuff 40 or more in a 40' container. The real problem is finished vehicles because at best you can only get 10 or so current Fords into a railcar or transport. So the best solution is more flexible plants that can build more models closer to the customer. IIRC there are 5 plants currently building F series variants, what if each could build everything from the F150 Lightning electric to an FT950? Then add capability to build the Excursion, stripped chassis, maybe a cabover... 

The reason Ford doesn’t do that is because it wants three high producing plants with the fastest possible line speed. Detroit Chassis and Ohio Assembly plant exist for the very reason that they are purposefully  set up to build specific low volume variants . Having three high volume plants does limit Ford’s ability to produce enough full sized SUVs but it’s clear that Ford prefers to have Kentucky Truck Plant build them as well as Super Duty and overflow some of the Super Duty builds to Ohio, again for the sake of keeping a higher line speed.

Edited April 5, 2022 by jpd80

[7Mary3]

BTW, Detroit Chassis is not a Ford plant, it is operated by Detroit Chassis LLC.  I thought F53 production had moved to OHAP at some point (thanks Footballfan).   

[jpd80]

https://manufacturing-today.com/profiles/detroit-chassis-llc/

DETROIT CHASSIS LLC

Issue Jul Aug 15

Detroit Chassis produces rolling chassis and complex subassemblies and modules for the automotive industry. The company’s sole client is Ford Motor Co., which uses its parts as the basis for recreational vehicles as well as commercial step vans, medium-duty trucks and cars including the SVT High-Performance Mustang. RV chassis make up roughly 70 percent of its total business, Dobbins notes.

The company recently opened a second facility in Avon, Ohio, that will concentrate on manufacturing chassis, rear axles and wheel assemblies for medium-duty work trucks such as the Ford F-650 and F-750. RV and commercial step van chassis and additional components including front end and corner modules for the SVT Mustang are manufactured in Detroit. The Avon facility is projected to reach full production capability by August.

[Bob Rosadini]

9 hours ago, jpd80 said:

https://manufacturing-today.com/profiles/detroit-chassis-llc/

DETROIT CHASSIS LLC

Issue Jul Aug 15

Detroit Chassis produces rolling chassis and complex subassemblies and modules for the automotive industry. The company’s sole client is Ford Motor Co., which uses its parts as the basis for recreational vehicles as well as commercial step vans, medium-duty trucks and cars including the SVT High-Performance Mustang. RV chassis make up roughly 70 percent of its total business, Dobbins notes.

The company recently opened a second facility in Avon, Ohio, that will concentrate on manufacturing chassis, rear axles and wheel assemblies for medium-duty work trucks such as the Ford F-650 and F-750. RV and commercial step van chassis and additional components including front end and corner modules for the SVT Mustang are manufactured in Detroit. The Avon facility is projected to reach full production capability by August.

Thx JP- I was aware of fact they built the F53 chassis but as I read this, the 650/750 chassis are built by them as well?  Right next to Ford plant in Avon Lake?  ???? I guess the fact this is a minority owned business is a factor in that decision.  They can build a plant next to an underutilized Ford facility???   No wonder as some suggest, medium duty is a loser for Ford.  Another "mouth to feed" in the cost analysis.

 

Unrelated, but Im was looking yesterday at a new 450 crew cab chassis that a friend of mine just bought.  Built at KTP.  I thought all 450 and above chassis were OAP sourced.??

 

[GearheadGrrrl]

Detroit Chassis is an asset for Ford- They do the "messy" low volume production for Ford so their plants aren't bogged down with these often customized vehicles. Detroit Chassis is also an innovator- They've built electrified stripped chassis and offer options the fleets demand like galvanized frames.

[jpd80]

1 hour ago, Bob Rosadini said:

Thx JP- I was aware of fact they built the F53 chassis but as I read this, the 650/750 chassis are built by them as well?  Right next to Ford plant in Avon Lake?  ???? I guess the fact this is a minority owned business is a factor in that decision.  They can build a plant next to an underutilized Ford facility???   No wonder as some suggest, medium duty is a loser for Ford.  Another "mouth to feed" in the cost analysis.

 

Unrelated, but Im was looking yesterday at a new 450 crew cab chassis that a friend of mine just bought.  Built at KTP.  I thought all 450 and above chassis were OAP sourced.??

 

While Ohio AP builds MDs and E Series, think of it as an overflow plant for SD chassis cab  F350/450/550, some are clearly built at Kentucky AP along with the other variants of Super Duty as well as Expedition and Navigator. Clearly KTP was maxed out and Ohio was the solution for Ford.

Edited April 6, 2022 by jpd80

[jpd80]

41 minutes ago, GearheadGrrrl said:

Detroit Chassis is an asset for Ford- They do the "messy" low volume production for Ford so their plants aren't bogged down with these often customized vehicles. Detroit Chassis is also an innovator- They've built electrified stripped chassis and offer options the fleets demand like galvanized frames.

So how would they  feel about Ford moving the MDs to Mexico after the big commitment of building a plant right next to Ohio AP.

[Bob Rosadini]

1 hour ago, jpd80 said:

So how would they  feel about Ford moving the MDs to Mexico after the big commitment of building a plant right next to Ohio AP.

Hah! I would imagine Bill Ford has received a few phone calls on that.   Another "consideration" in the sourcing decision...add "Minority Vendor" to "UAW" on the checklist?

 

And while we are on the Mexican sourcing thought, I find it so hard to believe that ALL freight costs were not carefully included in Ford's sourcing decisions-not just the outbound costs on finished vehicles, but the inbound freight costs used to determine a plants respective "cost of goods".