Ford CEO Jim Farley Says Build To Order Paradigm Is Company’s Future

[akirby]

1 hour ago, rperez817 said:

 

For a manufacturer like Ford encouraging retail sold orders for new vehicles? There's nothing illegal about that.

Allowing the customer to “order” the vehicle from Ford directly and choose the dealership to complete the sale is a grey area.

 

Ford tried this years ago with used vehicles.  Got sued and lost.  It’s one thing to do it on one or two vehicles - doing it on all of them might piss off some dealers who think they’re getting the shaft.

[rperez817]

1 hour ago, akirby said:

Allowing the customer to “order” the vehicle from Ford directly and choose the dealership to complete the sale is a grey area.

 

Ford tried this years ago with used vehicles.  Got sued and lost.  It’s one thing to do it on one or two vehicles - doing it on all of them might piss off some dealers who think they’re getting the shaft.

 

Thanks for the clarification. Ford (or other automaker) will need to ensure that encouraging customers to do sold retail orders on new vehicles isn't interpreted as the automaker dictating the terms of the sale. That was the factor resulting in Ford losing a case 21 years ago against the Texas Department of Transportation's Motor Vehicle Division involving the sale of used cars online. Texas Judge Bans Ford From Selling Cars on Web - The New York Times (nytimes.com) 

 

Jim Farley's approach should be OK here.

Edited August 2, 2021 by rperez817

[rmc523]

11 hours ago, HotRunrGuy said:

 

After dealing with PE's/blood clots a few years ago, I'm on the same mandate to stop every 2 or 2-1/2 hours and walk around.  Made a quick trip from Chicago to the DFW TX area last week, sure does add time to the trip.

 

Anyone seeing states adding charging stations to rest areas/oasis's?

 

HRG

 

I've been through Florida, Georgia, Tennessee, Kentucky, and Ohio on a road trip and haven't noticed any chargers in rest stops.

[FordBuyer]

50 minutes ago, rmc523 said:

 

I've been through Florida, Georgia, Tennessee, Kentucky, and Ohio on a road trip and haven't noticed any chargers in rest stops.

 

Tesla has charging stations at 8 service plazas on the FL Turnpike which is a toll road. 

[jpd80]

6 hours ago, rperez817 said:

 

Thanks for the clarification. Ford (or other automaker) will need to ensure that encouraging customers to do sold retail orders on new vehicles isn't interpreted as the automaker dictating the terms of the sale. That was the factor resulting in Ford losing a case 21 years ago against the Texas Department of Transportation's Motor Vehicle Division involving the sale of used cars online. Texas Judge Bans Ford From Selling Cars on Web - The New York Times (nytimes.com) 

 

Jim Farley's approach should be OK here.

The whole problem is scheduling customer orders in the same month, they are unplanned builds

compared to the planned supply of JIT parts, do too many of those and it mucks up all the JIT deliveries planned months in advance.

 

The reason Hackett’s plan of prioritising customer builds failed was that it caused major headaches

that the suits just don’t understand, they get lower prices from suppliers by locking in long lead delivery

profiles.………Do you see the conflict?

Edited August 3, 2021 by jpd80

[akirby]

8 hours ago, jpd80 said:

The whole problem is scheduling customer orders in the same month, they are unplanned builds

compared to the planned supply of JIT parts, do too many of those and it mucks up all the JIT deliveries planned months in advance.

 

The reason Hackett’s plan of prioritising customer builds failed was that it caused major headaches

that the suits just don’t understand, they get lower prices from suppliers by locking in long lead delivery

profiles.………Do you see the conflict?

I think once this is settled in they’ll be able to predict what customers will buy but it is going to require more supplier flexibility and probably more inventory and that will raise costs a little.  But more standard equipment and fewer standalone options will help.

[sullynd]

They need to come up with a way to negotiate the price online. The Mach-E reservation process was a challenge in that you were reserving something you wouldn’t be buying for a year or more with an unknown price and no ability to change dealers. I’ve bought my last three Ford’s from the same dealer (last two from same sales person) knew they’ve always treated me right, and went with them on blind faith.  I’ve bought my cars from them specifically to avoid the awful big Ford store in town. How many went with them because they were “local” with no existing relationship. I don’t know if they did ADMs or not, but it wouldn’t surprise me if they did.  Imagine waiting a year and then finding they’re going to hit you with a 5 or 10k markup. 

Edited August 3, 2021 by sullynd

[rperez817]

9 hours ago, jpd80 said:

The whole problem is scheduling customer orders in the same month, they are unplanned builds

compared to the planned supply of JIT parts, do too many of those and it mucks up all the JIT deliveries planned months in advance.

 

The reason Hackett’s plan of prioritising customer builds failed was that it caused major headaches

that the suits just don’t understand, they get lower prices from suppliers by locking in long lead delivery

profiles.………Do you see the conflict?

 

Good points jpd80 sir. Jim Hackett and now Jim Farley did the right thing to prioritize and encourage retail customer sold orders. But you're correct that relations between Ford and suppliers will need to improve in order for the conflicts to be worked out. Ford has a lot of room for improvement here. As mentioned in the Bronco/Bronco Sport thread, Ford's score in the OEM Supplier Working Relations Index declined significantly this year and is now in the "poor" category.

 

[jcartwright99]

23 minutes ago, sullynd said:

They need to come up with a way to negotiate the price online. The Mach-E reservation process was a challenge in that you were reserving something you wouldn’t be buying for a year or more with an unknown price and no ability to change dealers. I’ve bought my last three Ford’s from the same dealer (last two from same sales person) knew they’ve always treated me right, and went with them on blind faith.  I’ve bought my cars from them specifically to avoid the awful big Ford store in town. How many went with them because they were “local” with no existing relationship. I don’t know if they did ADMs or not, but it wouldn’t surprise me if they did.  Imagine waiting a year and then finding they’re going to hit you with a 5 or 10k markup. 

 

Can't you just negotiate over Zoom? 

 

Sales: "My sales manager says this is the lowest we can go. Here is the financing and payment info. All you have to do is sign the papers"

 

Customer: "That won't work for me. I need you take add another 1000 on the trade in and cut 1000 of the price. Then I will sign"

 

Sales: "Are you sure? They said we were at our bottom price but I will ask. I would just hate for you to lose out on this vehicle for a couple thousand dollars."

 

Customer: (Needlessly waiting for a half an hour for sales to come back to Zoom call. Rinse and repeat!)

 

Then they will submit your final price to the online reservation system. 

 

On second thought, there has to be a better way.

 

 

 

Edited August 3, 2021 by jcartwright99

[rperez817]

29 minutes ago, jcartwright99 said:

Can't you just negotiate over Zoom? 

 

Sure. But not on Vroom.

 

Vroom, like Carvana, Carmax, and other "no hassle, no haggle" retailers, doesn't negotiate vehicle pricing with the ultimate buyer. Used Cars for Sale: Buy Online + Home Delivery | Vroom

[akirby]

1 hour ago, sullynd said:

They need to come up with a way to negotiate the price online. The Mach-E reservation process was a challenge in that you were reserving something you wouldn’t be buying for a year or more with an unknown price and no ability to change dealers. I’ve bought my last three Ford’s from the same dealer (last two from same sales person) knew they’ve always treated me right, and went with them on blind faith.  I’ve bought my cars from them specifically to avoid the awful big Ford store in town. How many went with them because they were “local” with no existing relationship. I don’t know if they did ADMs or not, but it wouldn’t surprise me if they did.  Imagine waiting a year and then finding they’re going to hit you with a 5 or 10k markup. 

Reservations are different than ordering a vehicle already in production.  I think what Ford is proposing is that you spec it out online then take it to your dealer to negotiate price and place the order.  A lot of people negotiate with multiple dealers via email nowadays.

[rperez817]

15 minutes ago, akirby said:

Reservations are different than ordering a vehicle already in production.  

 

At Ford a reservation placed by a consumer for a new vehicle isn't an order at all. When my wife and I reserved a Mustang Mach-E First Edition, Ford made this very clear. The website used to place the reservation, as well as the e-mail we got after the reservation went through, had this message.

 

Quote

"By completing the Reservation Process, you are not ordering or purchasing a vehicle"

Edited August 3, 2021 by rperez817

[jpd80]

8 hours ago, akirby said:

I think once this is settled in they’ll be able to predict what customers will buy but it is going to require more supplier flexibility and probably more inventory and that will raise costs a little.  But more standard equipment and fewer standalone options will help.

That is entirely possible / doable, it needs to be a paradigm ship for Ford away from 

squeezing the last buck out of suppliers by signing up to longer lead supply profile.

 

The whole point of JIT manufacturing and parts supply is exactly what you said,

to have enough flexibility to follow customer orders, the cost of which is offset

by building less vehicles inventory that may take longer to move.

 

Now is the best time to commit to change before Ford tries to restart production 

with intent to grow inventory (some is good). I think the other big opportunity here

is if they get dealer inventory builds closer to right, walk-in sales might really take off.

 

Edited August 3, 2021 by jpd80