fuzzymoomoo Posted July 27, 2020 Share Posted July 27, 2020 2 hours ago, Flying68 said: The math there doesn't work. That would be $750 million in gross profit if they sold 100,000 units at a $7500 gross margin. Then you have to add in amortization of development expenses, tooling, and SG&A to that. Even if they included those expenses to come up with $7500 in net profit, you would still need 33% more production to get to $1 billion. You’re not factoring in Ranger to that though. 1 Quote Link to comment Share on other sites More sharing options...
Flying68 Posted July 27, 2020 Share Posted July 27, 2020 1 hour ago, fuzzymoomoo said: You’re not factoring in Ranger to that though. I hope I am just missing the sarcasm in that statement. Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted July 27, 2020 Share Posted July 27, 2020 (edited) 19 minutes ago, Flying68 said: I hope I am just missing the sarcasm in that statement. No sarcasm. The original thing you quoted was a little bit of a misquote. They don't expect a billion in profit from Bronco alone, they expect it between both Ranger and Bronco. The original quote left that part out. Ford expects MAP to be In the top 5 most profitable plants in the company worldwide by the time the Bronco launch is done. I'm not pulling that out of my ass, the body shop manager himself told me that. Edited July 27, 2020 by fuzzymoomoo Quote Link to comment Share on other sites More sharing options...
snooter Posted July 27, 2020 Share Posted July 27, 2020 Atp crowd is going to need more meds....drug companies is the smart play Quote Link to comment Share on other sites More sharing options...
Flying68 Posted July 27, 2020 Share Posted July 27, 2020 1 hour ago, fuzzymoomoo said: No sarcasm. The original thing you quoted was a little bit of a misquote. They don't expect a billion in profit from Bronco alone, they expect it between both Ranger and Bronco. The original quote left that part out. Ford expects MAP to be In the top 5 most profitable plants in the company worldwide by the time the Bronco launch is done. I'm not pulling that out of my ass, the body shop manager himself told me that. Well I could understand that completely, if the $1 billion profit target is from the total plant production and not just off of the Bronco alone. From this article I found from April 2019, it pretty clearly shows that at that time they expected $5,000 average improvement in operating margins by switching, which is a bit different from net profit. Quote Baumbick pointed to the production shift at Michigan Assembly as a proof-point. Ford made the slow-selling Focus and C-Max compact cars there before shifting production to the Ranger and the all-new Bronco expected to hit showrooms by the end of 2020. That move will generate more than $1 billion in operating earnings improvements in 2021 when compared to 2017. Ford expects to produce more than 200,000 Rangers and Broncos at the Wayne plant in 2021. In 2017, 200,000 Focus and C-Max cars rolled off the line there. Operating earnings improvements are a good indicator of overall profit improvements (you always have one time and other special charges that can affect overall profitability), but are not a direct indicator of actual gross or net profit. If the Focus and C-Max were generating operating losses, the improvement could be just shifting from a net loss to break even or just a smaller loss (I don't know what the margins were in 2017). As an investor though, it is a good to see companies ditch loss leaders for more profitable products. We will have to see how this actually materializes into Q3 and Q4 2021 when the plant is in full production for both vehicles, with time to see sales impact. Quote Link to comment Share on other sites More sharing options...
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