Capacity Utilization is Job One

[Bluecon]

He hit it on the head this week.

That is why Wall Street is not buying.

 

http://www.thetruthaboutcars.com/?p=2294

[ZanatWork]

WOW...the whole basis of the article residing around their belief that Ford hasn't publicly announced two of the factories yet?

 

Somewhere between dumb and highly amusing.

[Bluecon]

WOW...the whole basis of the article residing around their belief that Ford hasn't publicly announced two of the factories yet?

 

Somewhere between dumb and highly amusing.

What he is saying is that Ford is running many of their factories at partial capacity.

This is why Wall Street backed away.

[ZanatWork]

I agree with something written a few days back, saying that Ford should just privatize the core company and make PAG public.

 

Wall Street wants to know about how a company's shares trade at any given moment, and displays less patience than a small child on a long car ride. The "analysts" have completely blown enough calls that I read them for humor reference, mostly.

[RichardJensen]

Re: capacity reductions--it makes no sense to announce factory closings that are more than 2 years out. It makes no sense to close factories ahead of replacement of the product built there.

 

http://detnews.com/apps/pbcs.dll/article?A.../609210341/1148

 

Shift reductions (in conjuction with worker buyouts) will reduce full time capacity usage to 100% more or less, by 2008.

 

Granted, Ford will be at 100% with (probably) 2 plants running on single shifts, which is not efficient, but it is definitely a step in the right direction.

 

-----

 

Also, Ford has not announced its company wide buyout plan, nor has there been any indication that targeted buyouts offered thus far have been less than satisfactory, according to what Ford expected from the program, at the time it was launched.

 

Younger workers means that the $140k represents less, in comparison with pension reductions, but it also means fewer workers that will be headed straight into retirement. Many will take the $140k and utilize some or all towards education/training in different fields, in fact Ford is actively encouraging such endeavors.

[Bluecon]

They need to stop the bleeding and now.

Every loss of about 1% of market share is the loss of another assembly plant.

Unless you reverse the martket share slide you will not be able to achieve 100% utilization.

 

The problem with the buyouts is you lose a great amount of knowledge on the floor.

Despite what people like Zanatwork think there are many highly skilled dedicated brilliant people in the union, working on the floor keeping the lines running.

 

Take for example Sparky_OAC and Pioneer. I don't see eye to eye with them but I would bet they both are exceptional at there job. And good electrician are critical to make the lines run.

[bystander]

I agree with something written a few days back, saying that Ford should just privatize the core company and make PAG public.

 

Wall Street wants to know about how a company's shares trade at any given moment, and displays less patience than a small child on a long car ride. The "analysts" have completely blown enough calls that I read them for humor reference, mostly.

 

 

How much more patience is warranted? This is the third turnaround "plan" in the last five years and the failure of other two gives the skeptical analyst a hell of a lot more credibility than some of the rosy-attitude cheerleaders on here. Many on BON (and in the analyst community) have been highly critical of Ford's glacially slow and inadequate rate of new product introductions in the North American market. And no matter what flavor of argument you might choose to dispute that view, nothing you say can put a positive spin on the cold, hard, truth of Ford's free-falling market share. The bottom line is that if Ford had been more aggressive in bringing out new products, we wouldn't be witnessing the relentless erosion of its sales in so many segments.

 

And where have the analysts been wrong about Ford's big picture in the last five years? They've said the numerous turnaround plans were inadequate, not fast enough, not aggressive enough, etc. Well guess what? They have been proven right. The only blown calls I've seen are from the "Ford can do no wrong" crowd (you know who you are) who praise every (inept) decision as if it was divinely inspired. If things turned out as positively as many of you had predicted, Ford would be soundly in the black right now and out of the financial woods.

Edited September 22, 2006 by bystander

[marc-o]

How much more patience is warranted? This is the third turnaround "plan" in the last five years and the failure of other two gives the skeptical analyst a hell of a lot more credibility than some of the rosy-attitude cheerleaders on here. Many on BON (and in the analyst community) have been highly critical of Ford's glacially slow and inadequate rate of new product introductions in the North American market. And no matter what flavor of argument you might choose to dispute that view, nothing you say can put a positive spin on the cold, hard, truth of Ford's free-falling market share. The bottom line is that if Ford had been more aggressive in bringing out new products, we wouldn't be witnessing the relentless erosion of its sales in so many segments.

 

And where have the analysts been wrong about Ford's big picture in the last five years? They've said the numerous turnaround plans were inadequate, not fast enough, not aggressive enough, etc. Well guess what? They have been proven right. The only blown calls I've seen are from the "Ford can do no wrong" crowd (you know who you are) who praise every (inept) decision as if it was divinely inspired. If things turned out as positively as many of you had predicted, Ford would be soundly in the black right now and out of the financial woods.

 

I couldn't agree more. I am usually quite critical of Wall Street's short term outlook, but four years ago we were told Ford would be profitable in 2006 at the latest, now we are being told 2009? That's not exactly around the corner. No less than three turnaround plans in a decade (with 4 years to go)? Ford was just about the worst prepared company when gas prices went through the roof - was there NO foresight?

 

I wouldn't blame anyone for being highly skeptical of this latest turnaround. Although I think there are many steps in the right direction, there are many things missing and at some point you can't expect people to believe in you if you haven't delivered. Ford has had some successes over the last few years, but it's clear where the trend is going.

[RichardJensen]

I couldn't agree more. I am usually quite critical of Wall Street's short term outlook, but four years ago we were told Ford would be profitable in 2006 at the latest, now we are being told 2009? That's not exactly around the corner. No less than three turnaround plans in a decade (with 4 years to go)? Ford was just about the worst prepared company when gas prices went through the roof - was there NO foresight?

 

I wouldn't blame anyone for being highly skeptical of this latest turnaround. Although I think there are many steps in the right direction, there are many things missing and at some point you can't expect people to believe in you if you haven't delivered. Ford has had some successes over the last few years, but it's clear where the trend is going.

1) Expanding the worker buyouts announced in January and speeding up plant closings doesn't have the feel of a 'new' restructuring. Ford had completely finished the '02 restructuring by late '04.

 

2) I would not agree that Ford was 'worst prepared', in that Ford's product plans over the last two years, and going forward emphasize cars over trucks/SUVs. However, Ford's unaddressed capacity issues made it more vulnerable to the demand shift that has cost GM and DCX more truck market share. That, truly, is the irony: Ford's F-Series is weathering the decrease in fullsize truck demand better than GM and DCX offerings--but since Ford has structural issues worse than GM and DCX, they are more dramatically impacted.

 

I think it's a mistake to connect the unrelated issues of unexpected declines in truck volume and poor capacity utilization across the board (as in Atlanta, Wixom, STAP--all car plants).

 

3) Clearly Ford needs to address capacity. That means decreasing shifts (and decreasing staff), and closing plants. Ford will have some plants running 3 shifts in 2008 (KTP, DTP, probably AAI and Hermosillo, and maybe OAC), but it will have 1 and 2 shift plants that will probably be running well below capacity (LAP, MTP, STAP). 3M units of straight time capacity and 3M units of production is probably about the best you can hope for. I'm confident that Ford's addressing capacity issues. The Edge should make up for a lot of softness on the SUV side, and car volume should be flat to improved, excluding the Taurus/Freestar.

 

4) Product planning is the only open question-- I would like to think Ford's getting customer involvement earlier in the design and concept process will work, but it's not a given. You can't just bring customers in and show them stuff and ask them, "So, you think this is cool?" A big question is execution: Will Ford be able to properly integrate early customer feedback into the design process? Will Ford be able to properly integrate customer feedback throughout the development and engineering process?

[RangeRover]

He hit it on the head this week.

That is why Wall Street is not buying.

 

http://www.thetruthaboutcars.com/?p=2294

 

Why are you always focusing on negatives? I think we all understand the history of Ford's failed turnaround plans.

 

I get it! You like to point out Ford's failures. Sometimes people need to just take a situation for what it is and try like hell to make it better or focus on what needs to be done. Wall Street, U.S. Gov't, U.S. consumers, U.S. Media are not interested in supporting companies/industries that struggle. They are labeled as hopeless and doomed to failure and anything positive is quickly noted and followed up with bad news.

 

Bottom line is that I am a proud U.S citizen. I never want to work for a foreign company and I never want to see U.S. business lose!! I can handle honest and objective criticism about Ford. They are in big trouble and the product is improving but won't be good enough until 2009/10 MY.

 

The unfortunate part is that daily I hear misinformation being spread by the media and regurgitated by friends & family. Ford & GM don't stand a chance unless the attitudes and ill-sentiment towards the U.S. auto companies improves.

 

Please be more objective and interject some positives along with your negatives. I think you will be surprised by the level of discourse that you would initiate. I am one for good debate as are most on this board but constant negativity from the same people makes me not want to visit and contribute on this forum.

[sparks will fly]

I couldn't agree more. I am usually quite critical of Wall Street's short term outlook, but four years ago we were told Ford would be profitable in 2006 at the latest, now we are being told 2009? That's not exactly around the corner. No less than three turnaround plans in a decade (with 4 years to go)? Ford was just about the worst prepared company when gas prices went through the roof - was there NO foresight?

 

I wouldn't blame anyone for being highly skeptical of this latest turnaround. Although I think there are many steps in the right direction, there are many things missing and at some point you can't expect people to believe in you if you haven't delivered. Ford has had some successes over the last few years, but it's clear where the trend is going.

 

Now take what you said and be an employee in a plant. Moral is at an all time low, whipsawing plants against each other for future cars and trucks, and management running scared. Now more than ever the debate on taking a buyout or not , will Ford be around in 10 years, How about the UAW will they make it? Way to much to digest and I am surprised now one has gone postal yet. The best part is I am at a plant that always has had part of it working 10 hour days and saturdays (trucks or escapes) in the last 14 years, and they are still uneasy.

[ZanatWork]

The problem with the buyouts is you lose a great amount of knowledge on the floor.

Despite what people like Zanatwork think there are many highly skilled dedicated brilliant people in the union, working on the floor keeping the lines running.

 

Take for example Sparky_OAC and Pioneer. I don't see eye to eye with them but I would bet they both are exceptional at there job. And good electrician are critical to make the lines run.

 

 

Gosh, you sure showed me...that you don't read my posts clearly.

 

I want the best person possible for any and every job within my favorite carmaker. I'd love to know how that's a bad thing. Then again, the second your point falls apart, I'm sure the "ostrich" b.s. will start flying.

 

I have nothing against Pioneer's job, but I have had plenty of evidence that unions, by and large, are outmoded and I've yet to see that they inspire productivity.. I think I've been pretty clear on this, especially with Pioneer. Have I called all the employees layabouts? No...but I do suggest firing everyone that fills the description-with no buyout offered.

 

If the UAW folded tomorrow (to dreeeaaaammm...the impossible dreeeaaaammmm...) I'd hope Pioneer would be able to keep his job out of sheer merit. In fact, if that happened, we'd have nothing but his constant hacking on the CD3s to argue about...we agree on things regularly.

 

If that's not clear enough, I can't help you.

Edited September 22, 2006 by ZanatWork

[Bluecon]

Why are you always focusing on negatives? I think we all understand the history of Ford's failed turnaround plans.

 

I get it! You like to point out Ford's failures. Sometimes people need to just take a situation for what it is and try like hell to make it better or focus on what needs to be done. Wall Street, U.S. Gov't, U.S. consumers, U.S. Media are not interested in supporting companies/industries that struggle. They are labeled as hopeless and doomed to failure and anything positive is quickly noted and followed up with bad news.

 

Bottom line is that I am a proud U.S citizen. I never want to work for a foreign company and I never want to see U.S. business lose!! I can handle honest and objective criticism about Ford. They are in big trouble and the product is improving but won't be good enough until 2009/10 MY.

 

The unfortunate part is that daily I hear misinformation being spread by the media and regurgitated by friends & family. Ford & GM don't stand a chance unless the attitudes and ill-sentiment towards the U.S. auto companies improves.

 

Please be more objective and interject some positives along with your negatives. I think you will be surprised by the level of discourse that you would initiate. I am one for good debate as are most on this board but constant negativity from the same people makes me not want to visit and contribute on this forum.

"He hit it on the head this week.

That is why Wall Street is not buying."

 

What is not objective about that. Your post is the one that is not objective. Nothing but a bunch of whining. That will fix nothing.

 

This is not tiddly winks Ford is playing. It is a business and their inept management is destroying peoples lives.