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Ford 1st Quarter Sales


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1 hour ago, grbeck said:

Ford doesn't make money selling Edges, Explorers, Corsairs and Nautiluses? I find that hard to believe. 

 

Corsairs and Nautiliuses should definitely be profit-generators, but Edges and Explorers are looking dicey. I'm sure Ford burned whatever profit that could have earned from Explorer by shipping from Chicago to Flat Rock to further fix. The media reviews are not holding back mentioning that a loaded Explorer ST stickers at $60k, but of course Ford sells at some incentive which doesn't help.

 

I am pretty sure the Escape is a net-zero profit at best even without the product launch issues.

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20 minutes ago, akirby said:

 

Where would Ford be today if they had hired 25% more staff and built 2 more factories last year and are now having to deal with all that fixed cost?

 

Certainly a lot worse off given the current environment. Unfortunately, the billions allocated to mobility services rperez referred to are weighing heavily on Ford’s financial health now. 

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Summation, Ford decided it no longer wants bottom fruit customers (i get that)...but boring as hell product offerings certainly is not the way i would construct the current business model for profitability....why should somebody dump 25k into an escape for hard plastic interior when that went out of vogue 15 years ago?...consumers may test drive an escape but they are not returning after test driving a rav...escape is destined for cheap fleet rental....

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1 hour ago, Trader 10 said:

Unfortunately, the billions allocated to mobility services rperez referred to are weighing heavily on Ford’s financial health now. 

 

Yes sir Trader 10, it's unfortunate that Ford's Mobility businesses lost $300 million last year. But it's an essential investment. Cox Automotive analyst Michelle Krebs said "investment in future mobility is expected and required".

 

Good news is that Jim Hackett is committed to investing in these operations long term, even though they aren't profitable now. 

Edited by rperez817
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2 hours ago, rperez817 said:

 

Mobility services too, such as autonomous vehicle services like robotaxi and goods delivery, first/last mile personal and shared mobility, microtransit, etc.


To me they've wasted a TON of cash on those with absolutely nothing to show for it. That won't change for a long time still. 

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Just now, fuzzymoomoo said:


To me they've wasted a TON of cash on those with absolutely nothing to show for it. That won't change for a long time still. 


Sometimes you have to invest for the future even if it doesn’t pay off right away.  Sometimes it never pays off, but it’s risky to ignore future technologies that many are predicting will take off.  And I’m sure they’ve gotten something out of it. 

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3 hours ago, akirby said:

 

Ford has 2 choices in order to pursue those new higher margin vehicles.   1 - expand product development resources and expand factory resources (very very expensive, add a lot of fixed overhead) or 2 - reprioritize existing resources.

 

Where would Ford be today if they had hired 25% more staff and built 2 more factories last year and are now having to deal with all that fixed cost?

 

Hermosillo alone can do 350K vehicles - maybe more.

 

So yes, given Ford has chosen option 2 it means killing some lower profit margin vehicles - temporarily at least.    To make it simple, they're replacing Fusion and Focus and Fiesta with Bronco, Bronco Sport, Ranger and a new trucklet using the same amount of resources.  No additional overhead but hopefully a lot more net profit.   As a consumer who loves cars it sucks but as a business plan it's pretty sound assuming the new products are as good as expected.

 

What Ford needs to do and what it hasn't done the last 20 years is get these new powertrains, platforms and vehicles out the door and get into a much simpler cadence of minor updates and regular refreshes and new tophats.   Developing all new vehicles, all new powertrains and all new platforms is expensive and a huge resource drain.  Maybe then they can bring back Focus and Fusion in some fashion.

 

 

Remember too that Jim Hackett took $11 billion out of ICE product development budgets as a way of funding all of Ford’s future commitments to mobility, connectivity, AVs and electrification.

I can understand that hard decisions had to be made with what products get funding and which ones drop out. 
 

and yes, GM recently showed us an horrific alternative to replacing car plants with Mexican ones....but surely there was a way for Ford to have its cake and eat it too with Mexico. Yeah, I know there was a lot going on back at the time but building SLP would have meant brand new digs for Bronco Sport, TC  and new compact pickup leaving Hermosillo to a C2 Focus/ Fusion double act that was originally envisaged.

 

I sometimes like to take alternate views so we can expand the discussion, perhaps not the most achievable objectives for Ford but but alway interesting to consider alternatives.

Edited by jpd80
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3 hours ago, snooter said:

Summation, Ford decided it no longer wants bottom fruit customers (i get that)...but boring as hell product offerings certainly is not the way i would construct the current business model for profitability....why should somebody dump 25k into an escape for hard plastic interior when that went out of vogue 15 years ago?...consumers may test drive an escape but they are not returning after test driving a rav...escape is destined for cheap fleet rental....

 

Yep exactly my sentiment. If you want to sell overpriced good, then at least make it look & feel good.

If sales fall short of expectations because the product is underwhelming, then I assume you need to put more incentives to get it out of the lot which further damages the bottom line, and I suppose the solution to that is make even crappier product next time for more expensive price?

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11 hours ago, akirby said:

 

Ford has 2 choices in order to pursue those new higher margin vehicles.   1 - expand product development resources and expand factory resources (very very expensive, add a lot of fixed overhead) or 2 - reprioritize existing resources.

 

Where would Ford be today if they had hired 25% more staff and built 2 more factories last year and are now having to deal with all that fixed cost?

 

Hermosillo alone can do 350K vehicles - maybe more.

 

So yes, given Ford has chosen option 2 it means killing some lower profit margin vehicles - temporarily at least.    To make it simple, they're replacing Fusion and Focus and Fiesta with Bronco, Bronco Sport, Ranger and a new trucklet using the same amount of resources.  No additional overhead but hopefully a lot more net profit.   As a consumer who loves cars it sucks but as a business plan it's pretty sound assuming the new products are as good as expected.

 

What Ford needs to do and what it hasn't done the last 20 years is get these new powertrains, platforms and vehicles out the door and get into a much simpler cadence of minor updates and regular refreshes and new tophats.   Developing all new vehicles, all new powertrains and all new platforms is expensive and a huge resource drain.  Maybe then they can bring back Focus and Fusion in some fashion.

 

 

 

Regarding staffing... Ford historically adds a lot of staff anytime the Company is doing well. For as long as I can remember, there have been far too many layers of staff and management built into the corporate structure that prevent the Company from making timely decisions to react to changes in the Market. If I read every report, etc. that Ford generates I wouldn't be able to do my job at the dealership level managing inventory, marketing, etc. 

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10 hours ago, dlghtjr90 said:

If you want to sell overpriced good, then at least make it look & feel good.

 

Well said dlghtjr90. Ford has been able to do this with a few limited edition models. Especially Mustangs and trucks. But not much else. 

 

Hopefully Jim Hackett's "Design thinking" will address this issue in future Ford products.

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9 hours ago, passis said:

Dear moderators, please delete if this has been posted elsewhere (in a quick lookup I didnt find It)

 

https://www.forbes.com/sites/jimcollins/2020/04/13/is-ford-for-sale/amp/

 

9 hours ago, snooter said:

Forbes generally not a bad source....bronc should have been out 3 years ago....VW Ford....its not like they do not have historical ties...

 

Thank you passis and snooter. Jim Collins of Portfolio Guru fame knows his stuff and his analysis in the Forbes article is very logical.

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12 minutes ago, silvrsvt said:

In all seriousness, how is VW supposed to be able to afford to buy Ford after being put through the wringer for over $30 billion dollars in fines for Dieselgate?

 

Volkswagen AG had nearly half a trillion Euros in assets and over 120 billion Euros in equity last year. Ford market cap is currently around 21 billion U.S. dollars, and is likely to decline further in the coming months.

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29 minutes ago, fuzzymoomoo said:


Honestly, working at Ford was the backup to the backup plan. Working for the railroad has been a lifelong dream for me but they’re much harder to get into than Ford was. 

When I was 4, my lifelong dream was to be a lumberjack, marry Raquel Welch, and drive the Mach 5 from Speed Racer.

Somehow that never came about.

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1 hour ago, rperez817 said:

 

Volkswagen AG had nearly half a trillion Euros in assets and over 120 billion Euros in equity last year. Ford market cap is currently around 21 billion U.S. dollars, and is likely to decline further in the coming months.

 

Having assets and equity isn't the same as having cash on hand, nor is market cap a great indicator of health either. If VW was in such great shape they wouldn't be having Ford design their next gen pickup or vans either. 

 

We are far from that point right now. 

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