RangerM Posted January 14, 2014 Share Posted January 14, 2014 Perhaps Reuss would rather be selling Ford's F-150 than the stuff GM is offering. Quote Link to comment Share on other sites More sharing options...
bzcat Posted January 14, 2014 Share Posted January 14, 2014 (edited) Meanwhile, Honda didn't spend a ton of money on a vehicle that competed directly against the F-150 and Silverado. Maybe the Ridgeline isn't so dumb after all... It will be interesting to see Toyota's moves in the coming years. I can't see Toyota vacating this market. The concept of Ridgeline is not dumb but it was a very clumsy execution. The final product leaves you scratching your head a bit. If I'm Honda, I will make it less "trucky" and more car like... a true 4 door El Camino if you will. Toyota is not leaving the truck business but they too must see the writing on the wall about the investment needed to keep pace with Ford, not to mention GM and Chrysler. If I'm Toyota, I will be throwing all my resources into building a fortress around Tacoma... make the new one with eye popping MPG, hybrids, diesels, all kinds of advanced drivetrain options, to prevent GM from re-entering the space and establish a foothold again. And I would let the Tundra ride out the sunset... spend minimal amount to keep refreshing the grille and interior to keep Toyota loyalists happy but forget about competing with F-150 on merit. The acquisition costs for conquest buyer on fullsize pickup trucks must be sky high - almost 20 years after Toyota entered the space, they have barely made a dent. Edited January 14, 2014 by bzcat 1 Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 14, 2014 Share Posted January 14, 2014 (edited) What's interesting to me is that the aluminum investment by Ford effectively escalates the arms-race aspect of vehicle engineering. It is a double victory for Ford if Toyota opts to invest in aluminum construction of the Toyota, because 1) it is extremely unlikely that they will be able to produce a competitive truck, and 2) it diverts cash away from other projects at Toyota. The Tundra cannot self-fund to the extent the F150 can, so every dollar that Ford induces Toyota to pull out of investment in the Camry, Corolla, etc., is a secondary benefit. I mean, this very closely tracks the escalation of defense spending that was used to bankrupt the USSR. Granted, the stakes are lower, and we're not talking about nation states, but to the extent that a healthier competitor (e.g. Ford, full size trucks) is able to induce over-extension from a weaker competitor (Toyota, full size trucks), it has an impact beyond the immediate benefits to Ford from offering a superior product. Edited January 14, 2014 by RichardJensen 2 Quote Link to comment Share on other sites More sharing options...
J-150 Posted January 14, 2014 Share Posted January 14, 2014 Can't you guys see what this statement was? Reuss was bantering with a reporter. The reporter asked his thoughts on the F-150. Reuss, being a gentleman threw compliments at his competition. That's all. Nothing more sinister than respect for the guys down the show hall. Personally, I think this kind of statement shines a positive light on Reuss. 2 Quote Link to comment Share on other sites More sharing options...
Anthony Posted January 14, 2014 Share Posted January 14, 2014 (edited) What's interesting to me is that the aluminum investment by Ford effectively escalates the arms-race aspect of vehicle engineering. It is a double victory for Ford if Toyota opts to invest in aluminum construction of the Toyota, because 1) it is extremely unlikely that they will be able to produce a competitive truck, and 2) it diverts cash away from other projects at Toyota. The Tundra cannot self-fund to the extent the F150 can, so every dollar that Ford induces Toyota to pull out of investment in the Camry, Corolla, etc., is a secondary benefit. I mean, this very closely tracks the escalation of defense spending that was used to bankrupt the USSR. Granted, the stakes are lower, and we're not talking about nation states, but to the extent that a healthier competitor (e.g. Ford, full size trucks) is able to induce over-extension from a weaker competitor (Toyota, full size trucks), it has an impact beyond the immediate benefits to Ford from offering a superior product. Devil's advocate: It's also possible that some things got diverted at Ford could so they could invest in an aluminum F-150. Could the next generation of some of the vehicles we see now be pushed out (or potential vehicles cancelled altogether) because of the investment Ford made to introduce an aluminum F-150 ? Obviously anything done by Toyota in regards to this is reactionary (as opposed to Ford's first-in approach), so the funds paid out by Toyota to invest in this would be "unplanned". Edited January 14, 2014 by Intrepidatious Quote Link to comment Share on other sites More sharing options...
7Mary3 Posted January 14, 2014 Share Posted January 14, 2014 I think Reuss knows the customers far better than Lutz ever did, even when he was at Ford. As for Barra, from what I understand she's not exactly clueless. We are all basing our opinions of her abilities on her past assignments, and it is hard to say from the outside exactly who she listens to within GM. But in any event, we have no idea how long she will occupy the CEO position. Ackerman's 'legacy' will not endure, particularly now that GM can pay for talent. Lot depends on the BOD, might take nothing more than an activist shareholder. GM is a concern, no question. But probably a bigger concern would be a return to feudalism at Ford when Mullaly leaves. There are many executives still around that thrived in that environment. They have been behaving themselves lately........... Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 14, 2014 Share Posted January 14, 2014 Devil's advocate: It's also possible that some things got diverted at Ford could so they could invest in an aluminum F-150. Could the next generation of some of the vehicles we see now be pushed out (or potential vehicles cancelled altogether) because of the investment Ford made to introduce an aluminum F-150 ? Consider the amount of revenue that the F150 generates, and the amount of gross profit that this vehicle is likely to generate over the platform's expected 8 year lifespan. I find it incredibly unlikely that any other program would have had resources diverted to invest in the F150, given that the F150 generates an incredible amount of gross profit. Quote Link to comment Share on other sites More sharing options...
7Mary3 Posted January 14, 2014 Share Posted January 14, 2014 Using the Arms Race is an interesting analogy for comparing Ford to Toyota. It's probably true if you only look at the full size truck market in North America, but from a macroeconomic viewpoint it's a bit myopic. Toyota can do whatever it wants to (including a full size diesel heavy duty pickup) and can afford to wait a long time to be profitable. No one has deeper pockets than Toyoda-san. It's a question of if Toyota wants to do it. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 14, 2014 Share Posted January 14, 2014 I think Reuss knows the customers far better than Lutz ever did, even when he was at Ford. As for Barra, from what I understand she's not exactly clueless. We are all basing our opinions of her abilities on her past assignments, and it is hard to say from the outside exactly who she listens to within GM. But in any event, we have no idea how long she will occupy the CEO position. Ackerman's 'legacy' will not endure, particularly now that GM can pay for talent. Lot depends on the BOD, might take nothing more than an activist shareholder. GM is a concern, no question. But probably a bigger concern would be a return to feudalism at Ford when Mullaly leaves. There are many executives still around that thrived in that environment. They have been behaving themselves lately........... It doesn't matter how well Reuss knows the customers. Reuss, for each and every project, is going to be *told* what the budget is, what the cost targets are and what the expected volumes are. It's not up to him to generate those numbers, it's up to him to *meet* those numbers. Barra may be a 'car girl' based on, I guess, the narrative that GM is spinning---but these inescapable facts remain: She has never, ever, ran a P&L. Never. Never. She has never, ever, ever, ever, ever, ever been responsible for delivering a profit from even the smallest of business units at GM. She has never had to meet a sales target, never had to meet a revenue goal, never had to meet an operating margin target. Never had to sign off on a major initiative. She wasn't in PD long enough to see *any* vehicle through from platform data gathering to product launch. She has *never* held a position in the treasury (granted this isn't a requirement, but if you're going to have zero P&L management and negligible product experience, you should at least have had some experience making sure the books balance!) So please, don't tell me that we don't know the future. That's trivial. What we do know is that GM had a candidate that had years of experience running business units AND product development. And they window-seated him in favor of someone with negligible experience in one field and absolutely no experience in the other. ---- As an aside----choose your words carefully. Do you really believe that Ford is at *greater* risk than GM? Do you really believe that a company that has been well managed for 9 years, that has been fiscally well managed for 11, that has more cash and higher operating margins, as well as a healthier global operation is at greater risk than a company that has not been well managed for going on 30 years, which has been fiscally mismanaged for at least the last ten, which has lost money in Europe for going on two decades straight, and which has a CEO who has no experience in P&L management, no experience in fiscal management and only the smallest degree of experience in PD? How could a thinking person possibly make this statement? GM is a concern, no question. But probably a bigger concern would be a return to feudalism at Ford when Mullaly leaves. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 14, 2014 Share Posted January 14, 2014 No one has deeper pockets than Toyoda-san. It's a question of if Toyota wants to do it. Toyota Motor had $13B cash on hand at the end of 2012. Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted January 14, 2014 Share Posted January 14, 2014 Meanwhile, Honda didn't spend a ton of money on a vehicle that competed directly against the F-150 and Silverado. Maybe the Ridgeline isn't so dumb after all... It will be interesting to see Toyota's moves in the coming years. I can't see Toyota vacating this market. The fact that the Ridgeline is taking so long to be redesigned is all the evidence needed to know it wasn't anywhere near as successful as they hoped it'd be. Quote Link to comment Share on other sites More sharing options...
fordmantpw Posted January 14, 2014 Share Posted January 14, 2014 Toyota Motor had $13B cash on hand at the end of 2012. And, if I'm reading it correctly, it looks like ford had about $14.75B at the end of Q3 2013. http://markets.on.nytimes.com//research/modules/company_topic/drawFiling.asp?docKey=137-000003799613000055-7U6I0BV7OSBED7IS9JBSVA8419&docFormat=HTM&formType=10-Q Disclaimer: I'm not an expert on reading big-a$$ financial balance sheets like that. Quote Link to comment Share on other sites More sharing options...
probowler Posted January 14, 2014 Share Posted January 14, 2014 I kinda see it like this.... Anyone can build a smaller pickup.... Not everyone can make it out of aluminum. Ford has the upper hand... they're ahead on the research and design, and soon to be on the manufacturing and implementation. From there.... all that work can easily be utilized should Ford decide to enter the mid-size pickup market.... and probably create a mind-blowingly high MPG pickup in the process. Ford is in the lead, now we wait for the knockout punch Quote Link to comment Share on other sites More sharing options...
akirby Posted January 14, 2014 Share Posted January 14, 2014 The key here is the combination of significantly lower weight without a loss of durability or capability combined with super fuel efficient drivetrains. If they can hit their fuel economy targets with the 2.7L EB then it will truly be a gamechanger that GM and Dodge and Toyota won't be able to match for years. Quote Link to comment Share on other sites More sharing options...
grbeck Posted January 14, 2014 Share Posted January 14, 2014 (edited) The fact that the Ridgeline is taking so long to be redesigned is all the evidence needed to know it wasn't anywhere near as successful as they hoped it'd be. But I'm sure that an out-and-out F-Series competitor would not have been any more successful (let alone more profitable). Such a vehicle would have required an all-new, dedicated, platform, along with an all-new (for Honda) V-8 engine. That represents a huge investment. There will be a second-generation Ridgeline, so Honda is continuing with the vehicle, and sees the potential for some profit. Edited January 14, 2014 by grbeck Quote Link to comment Share on other sites More sharing options...
jpd80 Posted January 14, 2014 Share Posted January 14, 2014 A lot of commentators are assuming that the aluminium body on F150 is so much more expensive than current but think about the constructional process and the changes driving this, Ford waited until Alcoa perfected a process of coating Aluminum sheeting so that reliable structural joins could be done with adhesives, eliminating the need for welding (GM) and rivets (J/LR) - consider how huge that really is... F150's alloy body is just the beginning, the processes and line speed required to keep up with demand says to me that Ford is a generation ahead of GM who seems committed to high strength steels. I think the latter is becoming a blind alley and instead of following it to the conclusion, Ford is stepping away now and committing those funds to an even better solution. Quote Link to comment Share on other sites More sharing options...
SoonerLS Posted January 14, 2014 Share Posted January 14, 2014 Do you really believe that Ford is at *greater* risk than GM If you're talking about the statement you quoted at the end, I read that as saying that GM isn't as big of a threat to Ford as are Ford's internal politics could become. If Mulally's cultural changes get undone and feudalism returns to Ford, that is a much bigger threat to Ford than GM could ever hope to be. Quote Link to comment Share on other sites More sharing options...
7Mary3 Posted January 14, 2014 Share Posted January 14, 2014 NEVER said Ford was at a great risk than GM. I just happen to think that the greatest risk to Ford comes from within. As for GM, who knows at this point. They are producing great quality. China. Ackerman will only be a footnote in a few years. Toyota? I hear strange tales about Toyota from the deserts of Arizona these days............ Quote Link to comment Share on other sites More sharing options...
7Mary3 Posted January 14, 2014 Share Posted January 14, 2014 From what I understand, Ford will be using a fair number of rivets in the new F-150 in addition to adhesives. Some steel will still be used in areas where they were unable to form the aluminum alloy into more complex shapes (lower cab corners were mentioned). Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 14, 2014 Share Posted January 14, 2014 They are producing great quality. China. Ackerman will only be a footnote in a few years. Toyota? I hear strange tales about Toyota from the deserts of Arizona these days............ Great quality, but still losing market share? That's an accomplishment? They managed to come within hooting distance of Ford's NA margins for one quarter, their EU operations are a nonstop disaster, and their greatest success story is a market in which they can't book 100% profits and which, in any case, is nowhere near as remunerative as some would have you believe. And if Barra's CEO tenure is anything even remotely approaching a success, then it enshrines a most cavalier and indefensible manner of succession planning.... Pluck someone from anywhere that grabs your eye, give them a rapid run through a mission critical operation and if they don't blow up the business, give them the top spot? Quote Link to comment Share on other sites More sharing options...
iamamultitasker Posted January 14, 2014 Share Posted January 14, 2014 Actually, Toyota has about $40B in net cash and cash equivalents which is way more than Ford. In addition, Toyota has an overwhelming amount of long-term investments which when netted out against long-term debt makes them a financial monster. They have way more resources than Ford. 1 Quote Link to comment Share on other sites More sharing options...
Anthony Posted January 14, 2014 Share Posted January 14, 2014 A lot of commentators are assuming that the aluminium body on F150 is so much more expensive than current but think about the constructional process and the changes driving this, Ford waited until Alcoa perfected a process of coating Aluminum sheeting so that reliable structural joins could be done with adhesives, eliminating the need for welding (GM) and rivets (J/LR) - consider how huge that really is... Ford did state it costs more (though not how much). Reports are upwards of $1k per vehicle, though I've not seen anything confirmed. Here's a snippet from Pete Reyes (F-150 Chief Engineer) on how they made up the difference on the aluminum price premium: Pete Reyes, the F-150's chief engineer, said Ford expects to make up the premium by reducing its recycling costs, since there will be less metal to recycle, and by slimming down the engine and other components, since they won't have to move so much weight. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 14, 2014 Share Posted January 14, 2014 (edited) Actually, Toyota has about $40B in net cash and cash equivalents which is way more than Ford. In addition, Toyota has an overwhelming amount of long-term investments which when netted out against long-term debt makes them a financial monster. They have way more resources than Ford. http://www.toyota-global.com/investors/financial_result/2014/pdf/q2/summary.pdf Yes. Toyota has $37B in cash, cash equivalents, deposits and marketable securities. But if you use *that* metric, Ford also has $37B in cash, cash equivalents, deposits and marketable securities. http://corporate.ford.com/doc/Q3_2013_Results_10Q_20131031.pdf And, I should point out, Ford's shareholder equity is $20B, whereas Toyota's is only $14B, so I'm not entirely sure how this mystical realm of long-term investments vs. long-term liabilities is benefiting Toyota, unless the rest of their operations are so mismanaged that a business can have that putative advantage, sell millions of additional units, and still have almost a third less shareholder equity. Nor can I find any evidence of this in the admittedly simplified balance sheets filed here. Edited January 14, 2014 by RichardJensen Quote Link to comment Share on other sites More sharing options...
fordmantpw Posted January 14, 2014 Share Posted January 14, 2014 Ford did state it costs more (though not how much). Reports are upwards of $1k per vehicle, though I've not seen anything confirmed. The same was said about the '04 F150 over the '03. I'm pretty sure that turned out OK. Ford was also able to cut those costs over the next few years with enhancements to product and processes. Quote Link to comment Share on other sites More sharing options...
iamamultitasker Posted January 14, 2014 Share Posted January 14, 2014 For some reason I can't seem to get the Quote button to work for me on this site. Anybody know why? Richard, First of all, Toyota's shareholder equity is around $135 Billion. You misread the balance sheet. You have to convert the Yen to dollars by multiplying 14M x 1M / xchange rate = 134B. That's about 7x Ford's shareholder equity. Secondly, sure Ford has about 37B in cash, but you have to factor in the net long term debt and also the overhang from the unfunded portion of the pension plan and you get a much weaker position, much weaker than Toyota's at least. Ford is actually in great financial shape which is one of the many reasons I own the stock, but your argument that somehow Toyota isn't in a position to fund an attempt to develop a competitive product to the F-150 is not based on facts. Toyota has enough money to try whatever. BTW, I actually think Ford has a good chance to outcompete and out develop Toyota in many market segments, but this has nothing to do with Toyota's financial position which is amazingly strong. Quote Link to comment Share on other sites More sharing options...
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