GM's Reuss: 'I want to get my hands on' Ford's new pickup

[RichardJensen]

You're right. I forgot to convert yen to dollars for Toyota's shareholder equity.

 

However, you're making a pretty significant error by talking about net long-term debt and unfunded pension obligations as though they were not already accounted for on the balance sheet.

 

Further, you misread my post.

 

Not once did I insist that Toyota was incapable of investing in the Tundra.

 

The point is that Toyota cannot invest in a new Tundra without compromising cash flows to *other* programs *or* profitability, unless they sell assets.

 

Now you can look at Toyota's assets and say that they could go a long time without feeling the pinch that spending >$2B on a new Tundra (new platform, new body shop, new powertrains, new transmission, etc.), but the fact remains: Fifteen years on, and the Tundra is not self-sustaining. It still requires cash from other programs to remain competitive.

 

And unless Toyota is prepared to sell assets to invest in the Tundra, that is precisely what is going to take place.

 

 

 

 

 

 

And while we're at it, I would *love* to see a breakdown on Toyota's 'Marketable securities and other securities investments' line item. I'd love to know the last time those 'other securities investments' were marked to market---or if they even *have* a market. Or, for that matter, what they are. Given that this line item represents a *huge* (~40%) piece of Toyota's shareholder capital, I'd be very curious to know what sort of real value adheres to these items. Frankly, I'd say a fair bit of skepticism is merited.

Edited January 15, 2014 by RichardJensen

[7Mary3]

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.

 

Yes, that is my point.

[Anthony]

 

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.

 

That number was not for the the old vehicle vs the new vehicle. That was strictly for the inclusion of aluminum.

 

Regardless, I'm sure it is an iron-clad business case.

Edited January 15, 2014 by Intrepidatious

[Edstock]

Frankly, I'd say a fair bit of skepticism is merited.

 

Is that like sludging?

[twintornados]

This was posted over at GMI.

 

 

I sense some panic here. I am not overly impressed with all of the new gizmos on the F150 but the weight reduction is a big deal. They have been overweight for years so I think we are looking at maybe 250-300 lbs lighter than the GM trucks. But, you shave off 6-700 lbs and dont change another thing its gotta be worth a mpg at least on existing engines.

 

 

This.

 

GM may be forced to respond with a 3.0 version of TTV6 in the Silverado and what a day that will be......

Imagine the pressure on GM to deliver a turbo engine without the design maturity of Ford's Ecoboost.

I hope Ford is planning on a secret weapon in the form of 3.2L 5 cylinder Powerstroke from Transit FS....THAT would really "dust" the competition....

[Pioneer]

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...

 

Um, we will be using rivets and welding. More rivets though.

[silvrsvt]

As for the Aluminum costs on the F-150...I'm sure that the difference in price might be 10-15% more then steel, but other factors close the gap in costs. Not to mention that it should get cheaper as time goes on as its used more and more product is being produced with it. I don't foresee down the road Ford retrograding and going back to Steel (unless someone makes steel that is as light as Aluminum and cheaper)

[spudz64]

From a recent Autoline Daily video, as per Farley "Ford has essencially locked up all the inventory of rolled sheet alluminium", meaning it would be years until anyone can get in the game! What a coup, way to go Ford!

 

https://www.youtube.com/watch?v=LTa3V_CwOpQ&list=UUoBaFUmLRgc_-d-rkBCFyfQ

[NickF1011]

 

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.

 

The fact that the next gen Ridgeline is shaping up to be a lot more truck-like tells me that they weren't at all happy with how the first design performed. Honda isn't usually known for blunders, but the first generation Ridgeline underperformed from day one. Why a second one? They obviously think they can fix some of the mistakes made on the first one and Honda has a pretty good history of fixing things it did wrong. (And when in the auto business did a second generation of something automatically mean it was done right the first time? Witness just about any current Cadillac -- most of their first generations were pretty awful.) But if it ends up performing as well as the first generation, no doubt they will not be happy.

Edited January 15, 2014 by NickF1011

[akirby]

I don't think Honda is really trying to claim F150, Ram or GM truck buyers as much as they're just trying to provide Honda faithful with a Honda alternative. So from that standpoint it may have been somewhat successful if you consider every Ridgeline sold was a Honda customer that did not leave the brand.

[SoonerLS]

I don't think Honda is really trying to claim F150, Ram or GM truck buyers as much as they're just trying to provide Honda faithful with a Honda alternative. So from that standpoint it may have been somewhat successful if you consider every Ridgeline sold was a Honda customer that did not leave the brand.

Considering that they were apparently people who didn't want to buy a pickup, they're also no loss to Ford, GM, or DodgeRam...

[akirby]

Considering that they were apparently people who didn't want to buy a pickup, they're also no loss to Ford, GM, or DodgeRam...

 

Also a good point.

[grbeck]

 

The fact that the next gen Ridgeline is shaping up to be a lot more truck-like tells me that they weren't at all happy with how the first design performed. Honda isn't usually known for blunders, but the first generation Ridgeline underperformed from day one. Why a second one? They obviously think they can fix some of the mistakes made on the first one and Honda has a pretty good history of fixing things it did wrong. (And when in the auto business did a second generation of something automatically mean it was done right the first time? Witness just about any current Cadillac -- most of their first generations were pretty awful.) But if it ends up performing as well as the first generation, no doubt they will not be happy.

 

Generally, if the first generation of a vehicle is a total flop, there isn't a second generation.

 

What was ultimately "right" about the first Ridgeline was the decision NOT to release a vehicle that competed directly with the Big Three competition. That would have required a much larger investment (all-new platform and all-new engines, for starters, as there is no way that Honda could have gained even a tenuous foothold in that market without a V-8 option). Given that Honda, globally, is a much smaller company than Toyota, such a miss would have cost the company dearly.

 

Honda also had to take into account that GM and Ford, in particular, were not going to stand by passively as competitors assaulted the crown jewels. This wasn't going to be a repeat of the 1970s, where Ford and GM let the Pinto and Vega wither against an assault by the Civic and Corolla.

 

This new F-Series pretty much affirms the wisdom of Honda's approach. There is no way that Honda could keep up with this Ford and maintain the competitiveness of the Civic, CR-V and Accord, which are Honda's crown jewels.

 

The concept of the Ridgeline - a vehicle that didn't compete directly with the extremely popular Big Three offerings - was right, but the execution was faulty.That is also what happened with many of the "Art & Science" Cadillacs. The first-generation Escalade, CTS and SRX were vehicles that Cadillac needed. The execution of those vehicles was the problem. Hence, each successive generation has gotten much better in execution, to the point where the latest Escalade, SRX and CTS are very good vehicles. But even with the faulty execution of the first-generation of those vehicles, Cadillac didn't simply give up on those segments.

Edited January 15, 2014 by grbeck

[NickF1011]

The concept of the Ridgeline - a vehicle that didn't compete directly with the extremely popular Big Three offerings - was right, but the execution was faulty.That is also what happened with many of the "Art & Science" Cadillacs. The first-generation Escalade, CTS and SRX were vehicles that Cadillac needed. The execution of those vehicles was the problem. Hence, each successive generation has gotten much better in execution, to the point where the latest Escalade, SRX and CTS are very good vehicles. But even with the faulty execution of the first-generation of those vehicles, Cadillac didn't simply give up on those segments.

 

Cadillac needed those vehicles or the brand would be toast. Even if they were horrible they had to replace them with something at some point. I wouldn't really consider the Ridgeline to be at all important to the overall health of Honda. Much like the Element, it was an experiment in quirkiness that didn't quite pan out as planned. I don't believe Honda has plans to replace the Element. We'll wait and see if it was or wasn't a wise decision to keep going with Ridgeline.

 

Honda is in a tough spot with it though as you mentioned. It can't stray too far from its platform roots without costing too much to make any money, but the constraints of the platform are mainly what created its shortcomings in the first place. Will be interesting to see how they address that conondrum with the 2nd gen.

Edited January 15, 2014 by NickF1011

[Joe771476]

Twin tornados your comment on Bill Ford was right on the money and he is to be commended. Bill might have been a little hesitant to mortgage the farm along with the logo!

[Joe771476]

Exactly what panels are going to be aluminum? If the bed sheet metal will be aluminum, will it affect traction in rear wheel drive trucks? Can any advancements in traction control compensate for that lost weight?

[fordmantpw]

Exactly what panels are going to be aluminum? If the bed sheet metal will be aluminum, will it affect traction in rear wheel drive trucks? Can any advancements in traction control compensate for that lost weight?

 

RWD pickups have $hitty traction anyway. Can it get any worse?

 

The bed is going to be Al, but I'm sure the weight savings is pretty much spread across the whole truck, so the weight distribution should say about the same. This should keep traction about as it is today.

[Chester]

The new Ridgleine will be more of a direct competitor to the Canyonrado than any of the big three/Tundra trucks. If Honda can beef up the Ridgeline so it gets the economy and towing capaicty of the new GM MID SIze, then that will be the competiton + Taco.