Ford cuts in Europe...

[atomcat68]

https://www.telegraph.co.uk/business/2018/09/02/ford-ditch-mondeo-scrap-thousands-jobs-cost-cutting-overhaul/

 

...And it keeps getting better.

 

Some highlights:

 

"As well as trimming its workforce and cutting production of the Mondeo, Ford was said to be considering scrapping the Galaxy and S-Max people carriers in favour of more lucrative offroad-style “sports utility” vehicles and may chop a number of dealerships."

 

"Another radical option would be to move some or all of its European business into a joint venture with a rival such as Volkswagen."

[Assimilator]

Ford has warned that its entire European car portfolio looses money and the only profit is generated by vehicles like the Kuga, Ranger, Edge, and their utility vans.

 

Not sure what the solution is but they have to make dramatic changes, such as eliminating Focus, Fiesta, Mondeo, and MPVs....or cooperating with somebody on those products. VW is certainly the best candidate but I don't think VW has any need to help Ford in areas where VW is already strong.

Edited September 2, 2018 by Assimilator

[justins]

The problem Ford has is that other makers now have multiple tiered brands to amortise development costs across -

 

Skoda, VW, Audi

 

Nissan, Daimler, Renault, Mitsu

 

Hyundai / Kia

 

Chrysler, Fiat, Alfa, Dodge

 

Ford has... Ford.

 

They're on their own, and the reality is that makes them vulnerable.

[mackinaw]

Worth reading from Automotive News:

 

"VW executive touts potential of Ford Partnership"

 

ford-vw-joint-venture-touted

[Assimilator]

I would not object to a VW acquisition of Ford, they are a perfect fit for each other. Ford is strong in North America, specifically the most lucrative aspects of the US market (F-Series, Vans, Large & Midsize Utilities) while VW absolutely dominates the rest of the global and luxury markets. They also have some compatibilities interms of technologies and product objectives. Ford and VW could improve their efficiencies and reduce duplication of efforts.

 

I know this is unlikely right now until Ford turns its business around and downsizes, and I doubt Ford Family wants to sell Ford, but they need to fix some enormous problems that they can't afford to do alone.

Edited September 3, 2018 by Assimilator

[7Mary3]

VW is something else. Possibly the most inefficient major automaker in the world. VW itself is barely profitable, and if it was not for Porsche, Audi, and the government of Lower Saxony (nothing really matters as long as a major shareholder is happy, right?) VW would be in very serious trouble. Socialism at its best. No matter though, they are a good partner for Ford at present and should Ford decide to leave Europe altogether VW is probably silly enough to take on all that product overlap and excess production capacity.

 

From last year:

 

https://www.forbes.com/sites/neilwinton/2017/10/16/lower-saxony-election-result-means-big-volkswagen-changes-unlikely/#27d10a243238

 

600,000 employees?

Edited September 3, 2018 by 7Mary3

[jpd80]

Ignoring special items in 2018 H1, VW cars, Audi and Porsche, each brand returned profit of close to EUR 2.1 Billion

There's an underlying strength in VW Group that goes way beyond just relying on Porsche alone.....

 

https://www.volkswagenag.com/de/news/2018/08/2018_H_1.html

 

Brands and business areas

In the first six months of 2018, the Volkswagen Passenger Cars revenue of € 42.7 billion was 7.7 percent higher than in the previous year. The operating result before special items was 2.1 (1.8) billion euros. Positive factors were the higher volume and improved product costs. This was offset by higher selling expenses, partly due to the environmental bonus, as well as advance payments for new products, in particular as part of the implementation of the electric offensive. The diesel issue resulted in special items amounting to - 1.6 billion euros.

 

Sales of the Audi brand rose to € 31.2 (30.0) billion in the first half of the year. Above all, volume increases, efficiency gains and forward-looking currency management meant that operating profit improved to EUR 2.8 (2.7) billion. Financial figures for the Audi brand include the Lamborghini and Ducati brands.

 

In the reporting period, ŠKODA's revenues of EUR 9.2 billion were 5.1 percent up on the previous year. Operating income declined by 4.5 percent to € 821 million due to negative foreign exchange effects and higher upfront services for new products, while volume improvements and cost optimization had a positive impact.

 

At EUR 5.8 billion, SEAT's revenue in the first half of the year was 14.5 percent higher than in the same period of the previous year. The operating result improved by 62.7 percent to 212 million euros. Expenses for up-front payments for new products and exchange rates were significantly overcompensated by positive volume, price and mix effects.

 

At € 757m (867m), Bentley's revenues were lower than in the same period of 2017. Operating profit was - € 80m (13m); This was mainly due to lower unit sales, delays in the start-up of the new Continental GT and exchange rates.

At € 11.2 (10.8) billion, Porsche Automobile's revenue in the first half of 2018 was higher than in the previous year. The operating result of Porsche Automobile increased by 0.4 percent to 2.1 billion euros, mainly due to positive mix effects.

 

Sales of Volkswagen Commercial Vehicles increased by 6.7 percent to 6.3 billion euros in the first six months of the current year. Operating profit increased by 26.7 percent to 567 million euros; The increase resulted mainly from volume and mix effects, better price positioning and material cost optimisations.

At € 6.5bn (6.3bn), Scania sales were higher than in the same period of 2017. At € 684m (673m), operating profit was better than in the previous year. Increases in costs were offset by higher volumes, a favorable exchange rate trend and an improved financial services business.

 

Sales of MAN Nutzfahrzeuge increased to EUR 5.8 (5.3) billion in the first half of 2018. The operating result rose to € 258 (193) million due to higher volumes.

 

MAN Power Engineering generated revenues of 1.6 (1.6) billion euros in the period from January to June 2018. The operating result was 68 (73) million euros.

 

The operating profit of Volkswagen Financial Services improved by 5.7 percent to 1.2 billion euros in the first half of 2018, mainly due to business growth and improved margins.

 

Edited September 3, 2018 by jpd80

[Sevensecondsuv]

Ford needs to cut their losses and pull out of rest of world. The products necessary to complete overseas are very different than what sells well and is profitable stateside. The whole one Ford idea did not work. The ROW operations are barely above break even in a good year. Take the mountains of cash generated by F series and use it to develope an entire lineup of best-in-class product for the US. Get back into heavy truck and tractors if they want to branch out into additional markets. Quit throwing billions into autonomous pipe dreams that aren't going anywhere.

 

^This model has the potential to generate that elusive 10% profitability.

[LoveTaurus]

Ford said it’s standing by its Mondeo family car, adding it will move forward with plans for an upgrade of the 25-year-old model and denying a Sunday Times report that it plans to halt production. Ford also denied the Sunday Times’ claims that plans are afoot to end production of the Galaxy and S-Max models.

[akirby]

Ford needs to cut their losses and pull out of rest of world. The products necessary to complete overseas are very different than what sells well and is profitable stateside. The whole one Ford idea did not work. The ROW operations are barely above break even in a good year. Take the mountains of cash generated by F series and use it to develope an entire lineup of best-in-class product for the US. Get back into heavy truck and tractors if they want to branch out into additional markets. Quit throwing billions into autonomous pipe dreams that aren't going anywhere.

^This model has the potential to generate that elusive 10% profitability.

Except Europe is embracing utilities now just like North America. I think they’re also moving away from Diesel and back to Petrol.

 

Focus is probably still viable but the rest should probably get canned.

[Assimilator]

Ford is getting close to restoring a regionalized development strategy as they dismantle OneFord. US, EU, and Chinese products are increasingly unrelated and Ford is no longer able to take advantage of global production. This might be a good time to spin off underperforming aspects of their business that could use a stronger partner. I think Ford should follow GM's example and focus on North American and China and possibly spin off it's EU business to VW.

 

I don't think that's happening and I don't really know if clever minds have figured out a way forward in Europe worth taking, but Ford need some radical moves in its turnaround strategy and I'm not really seeing it yet, certainly not to Mullally's level. But it's clear EU is a conspicuously low priority for them right now.

Edited September 3, 2018 by Assimilator

[Twin Turbo]

OK, this is just the UK (where I live) but the Fiesta and Focus are VERY important in terms of sales numbers.......with the Kuga in 3rd place in terms of Ford sales......

 

[ice-capades]

It's hard to imagine a future where Ford isn't a global seller. Understandably, there are problems in the International markets but they're directly related to the vehicles sold in those markets. Should Ford abandon those International markets where it has a strong Market position such as Europe? Better, more competitive product may be the solution instead of just leaving the Market.

[Assimilator]

Ford can have bestsellers in Europe, but not profitably.

[mackinaw]

I don't think that's happening and I don't really know if clever minds have figured out a way forward in Europe worth taking, but Ford need some radical moves in its turnaround strategy and I'm not really seeing it yet, certainly not to Mullally's level. But it's clear EU is a conspicuously low priority for them right now.

 

I think you are seeing it. The fact that they're looking to exit South America (if rumors are to be believed) and are cutting back both models and personnel in Europe, show they aren't standing pat. And there's also the partnership with VW. Remember that Ford turned a record profit in Europe just two years ago. Not sure you should abandon such a large market before restructuring first.

[ice-capades]

Ford can have bestsellers in Europe, but not profitably.

 

They can with the right product!

[twintornados]

Ford is getting close to restoring a regionalized development strategy as they dismantle OneFord. US, EU, and Chinese products are increasingly unrelated and Ford is no longer able to take advantage of global production. This might be a good time to spin off underperforming aspects of their business that could use a stronger partner. I think Ford should follow GM's example and focus on North American and China and possibly spin off it's EU business to VW.

 

I don't think that's happening and I don't really know if clever minds have figured out a way forward in Europe worth taking, but Ford need some radical moves in its turnaround strategy and I'm not really seeing it yet, certainly not to Mullally's level. But it's clear EU is a conspicuously low priority for them right now.

.

If this is what you think "One Ford" was about, you never really understood it in the first place. .."One Ford" put the focus on Ford, not Aston Martin, Jaguar, Range Rover, Volvo, Mazda or the other disparate brands that non Ford CEO's acquired to try to dominate....Lincoln survives since Edsel himself was involved in it's acquisition....I was quite stunned that Alan was able to convince the Ford family to discontinue Mercury since it too was an Edsel creation, but I honestly believe it is why Lincoln is still here....Alan was allowed to shelve Mercury in order to save Edsels' beloved Lincoln, Lincoln was "his baby".

 

One Ford today is about economy of scale in operations....can you scale down operations to make Fusion in lower volumes and continue to sell it profitably, if not, shut it down and move the name to something that is profitable. Are there chassis architectures that can be sold in other markets that can also be built in "non-Ford" plants? That is what the Ford/VW tie up will explore....remember, Fiat 500 and Ford Ka shared manufacturing but are distinctly different.

[jpd80]

One of the issues for Ford in Europe is the need for Ford to manufacture in Germany,

take that away and you can kiss goodbye to all those other sales of products made in Spain.

 

And Ford isn't going anywhere with Fiesta and Focus, they've just spent a bomb delivering

new product cycles for both there, so I doubt they will want to tear everything up right now...

 

How about persisting but hurry up with hew Utilities with maybe a hybrid version instead of diesel..

Mind you, Fiesta and Focus diesels are still very popular and Ford has spent plenty delivering the

new 1.5 & 2.0 Ecoblue Panther diesels.

 

I', worried that Hackett is going to do something radical and live up to his name...

Edited September 3, 2018 by jpd80

[Jqa1824]

The one major mistake Mullaly made in my opinion was letting Mazda go. That was a fruitful partnership that had major benefits. And now theyre in the Toyota orbit. Mazda did/could add significant volume to every major product niche except vans and full-size trucks.

[justins]

The one major mistake Mullaly made in my opinion was letting Mazda go. That was a fruitful partnership that had major benefits. And now theyre in the Toyota orbit. Mazda did/could add significant volume to every major product niche except vans and full-size trucks.

I agree with this.

 

The Mazda 2 / Fiesta, 3 / Focus, Mondeo / Fusion / 6, and their respective CUV offspring all had synergies that could (and did while Ford held them) amortize development costs.

[ehaase]

Ford's small cars developed by Mazda all seemed to have higher quality than the small cars Ford developed itself.

[fuzzymoomoo]

Ford's small cars developed by Mazda all seemed to have higher quality than the small cars Ford developed itself.

My 2008 Focus was a shitbox when it was new compared to my 2015 I had....

[Assimilator]

Before OneFord, Ford and Mazda worked on cars in the US and it was a tremendously integral partnership. Once Mullally moved everything to OneFord, Ford took advantage of it's outstanding small car/drivetrain development out of Europe. There were a few false starts before that, Mondeo/Contour was one of them. But Ford absolutely doesn't needs Mazda now and hasn't for a long time. Mazda doesn't even have any electrification strategy, one fo the only companies that doesn't. But Mazda has absolutely thrived on its own, as have all of Ford's expats, I don't think they would have been this healthy today if they were still tied to Ford.

Edited September 4, 2018 by Assimilator

[92merc]

The only thing it looks like Mazda has going for it is its newest SkyActive-X technology. It looks like the may have cracked the code on compression ignition for gas engines.

[jpd80]

While Fusion and MKZ have their own dedicated plant, Mondeo is made in Valencia. Spain along with five other vehicles.

Maybe there are lessons to be learned with being able to deliver low volumes of certain products..

From memory, Valencia builds Mondeo, S-Max, Galaxy, Transit Connect, C-Max and Kuga.

Edited September 4, 2018 by jpd80