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Ford to Fund Its EV Efforts in Part by Laying Off 8000 Workers


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2 hours ago, bzcat said:

 

So instead of investing in core products, he dumped that money into buying bottomless pits like Jaguar and Land Rover. 

Two things,

His intent with forming Performance Auto Group was to create an income stream that rivalled Ford Europe. Unfortunately, he miscalculated the continual investment required to keep premium brands fresh. Of the brands purchased, Volvo actually contributed the most to Ford, introducing CAN bus and developing C1 plus (EUCD) platform was a major achievement.

Had Nasser spent that investment money on Ford’s own brands, Lincoln and Mercury, things may have turned out completely different.

 

the second,

Investing in core products only works if you invest in the right ones and follow the market, Ford has been guilty of being slow and late responses to the market for over a decade, Farley is fixing that.

 

Even today, the biggest profit earners at Ford are F Series, Ranger and Ford Transit, most of the other name plates barely cover development and manufacturing costs. Ford Blue’s only option to increase profitability is to keep charging more for its products and basically cut out traditional entry level models.

Edited by jpd80
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9 hours ago, jpd80 said:

Ford Blue’s only option to increase profitability is to keep charging more for its products and basically cut out traditional entry level models.

 

They can only charge so much until sales fall off...  What Ford will really need to do is discontinue models that are currently unprofitable as soon as possible and then reduce the models with the lowest margins.  They should be able to come up with the most profitable ICE product mix possible quickly.   

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7 hours ago, 7Mary3 said:

What Ford will really need to do is discontinue models that are currently unprofitable as soon as possible and then reduce the models with the lowest margins.  They should be able to come up with the most profitable ICE product mix possible quickly.   

 

Good recommendation 7Mary3, I think Ford is planning to do what you mentioned with the Blue division. It is an ideal strategy for a business unit that is in terminal decline.

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9 hours ago, 7Mary3 said:

 

They can only charge so much until sales fall off...  What Ford will really need to do is discontinue models that are currently unprofitable as soon as possible and then reduce the models with the lowest margins.  They should be able to come up with the most profitable ICE product mix possible quickly.   

Won't this drive loyal ford buyers to the competition if they do not offer what the customers want?  Kia and Huyndai are eating Ford's and gm's lunch picking up customers orphaned by Ford. 

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31 minutes ago, Footballfan said:

Won't this drive loyal ford buyers to the competition if they do not offer what the customers want?  Kia and Huyndai are eating Ford's and gm's lunch picking up customers orphaned by Ford. 

 

Ford has a serious quality issue and that is what is driving buyers away. It has had this problem for some time and it's not getting any better in fact it is getting worse.

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39 minutes ago, Footballfan said:

Won't this drive loyal ford buyers to the competition if they do not offer what the customers want?  Kia and Huyndai are eating Ford's and gm's lunch picking up customers orphaned by Ford. 

 

That is certainly possible Footballfan, and IHS Markit data confirms exactly what you indicated regarding Kia and Hyundai picking up "orphaned" customers from Ford and GM over the past decade.

 

It seems Ford and GM have been aggressively courting a wealthier, younger customer base attracted to high end products and services compared to the customers that got orphaned by those companies. As a result, Ford and GM probably won't mind losing otherwise "loyal" customers if those customers chose products and services from those companies that had low profitability and/ or poor brand image.

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34 minutes ago, rperez817 said:

 

That is certainly possible Footballfan, and IHS Markit data confirms exactly what you indicated regarding Kia and Hyundai picking up "orphaned" customers from Ford and GM over the past decade.

 

It seems Ford and GM have been aggressively courting a wealthier, younger customer base attracted to high end products and services compared to the customers that got orphaned by those companies. As a result, Ford and GM probably won't mind losing otherwise "loyal" customers if those customers chose products and services from those companies that had low profitability and/ or poor brand image.

 

Every company should be concerned about losing customers. You don't think ford has a brand image problem?  Ford has the most recalls of any U.S. auto maker in 2022, having launched 45 of them this year, according to NHTSA data.

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1 hour ago, Footballfan said:

Won't this drive loyal ford buyers to the competition if they do not offer what the customers want?  Kia and Huyndai are eating Ford's and gm's lunch picking up customers orphaned by Ford. 


I love it when people only look at half of an equation.  What about Ford eating the Koreans lunch with F150, Superduty, Transit, Lightning and E transit?  What about Bronco and Ranger and Bronco Sport and Maverick and EV versions of those?  

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38 minutes ago, coupe3w said:

You don't think ford has a brand image problem? 

 

Ford certainly does have a brand image problem, borne out of a dysfunctional organizational culture. However, the problem is mitigated by the following.

  • Even though Ford has its share of customer defections (especially the "orphaned" customers that Footballfan mentioned), it also has a contingent of hyper-loyal "sheeple" customers, especially for its high end pickup trucks and SUVs. This group of customers contributed heavily to Ford winning IHS Markit's Overall Loyalty to Make award for 12 consecutive years. News Release | IHS Markit Online Newsroom
  • Ford's recent split into Model e and Blue divisions is a good start in terms of fixing Ford's dysfunctional organizational culture. As long as each business units' respective strategies are implemented properly, Ford has a good chance of improving its brand image in the next few years.
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32 minutes ago, rperez817 said:

 

Ford certainly does have a brand image problem, borne out of a dysfunctional organizational culture. However, the problem is mitigated by the following.

  • Even though Ford has its share of customer defections (especially the "orphaned" customers that Footballfan mentioned), it also has a contingent of hyper-loyal "sheeple" customers, especially for its high end pickup trucks and SUVs. This group of customers contributed heavily to Ford winning IHS Markit's Overall Loyalty to Make award for 12 consecutive years. News Release | IHS Markit Online Newsroom
  • Ford's recent split into Model e and Blue divisions is a good start in terms of fixing Ford's dysfunctional organizational culture. As long as each business units' respective strategies are implemented properly, Ford has a good chance of improving its brand image in the next few years.

 

I've been hearing this crap about Ford quality for decades. It's just the same old corporate BS. It's never going to improve. Remember the slogan "Quality is job 1" yeah and Ford trucks were spitting out spark plugs how does that even happen? And then those long reach spark plugs getting stuck and breaking off when trying to remove them. No thanks. They try to improve things and they make it worse. Blown head gaskets on Focus RS. Stupid slits in the top of the cylinder bore to improve cooling? Just stupid stuff they keep doing over and over. They can't leave well enough alone. I feel bad for the engineer's that are trying to do the right things there. I really do. Hopefully when they are complete electric things will improve. But I won't hold my breath for that.

Edited by coupe3w
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32 minutes ago, coupe3w said:

I've been hearing this crap about Ford quality for decades. It's just the same old corporate BS. It's never going to improve.

 

Good points coupe3w. The underlying theme about Ford's organizational culture that caused what you mentioned is Ford's tolerance for making the same mistakes over and over. 

 

I think the "fitness" regime that Jim Hackett started combined with the Ford+ business plan is finally starting to chip away at that nowadays. But there's a LOT of room for improvement and a long journey ahead for Ford.

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1 hour ago, akirby said:


I love it when people only look at half of an equation.  What about Ford eating the Koreans lunch with F150, Superduty, Transit, Lightning and E transit?  What about Bronco and Ranger and Bronco Sport and Maverick and EV versions of those?  

 

Akirby I know you are a smart guy on this site and I do agree with you most times, but I can't understand why you keep defending Ford and their mistakes. We as consumers need to push back on these guys if we want a great company like Ford to improve not covering up for them

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33 minutes ago, coupe3w said:

 

Akirby I know you are a smart guy on this site and I do agree with you most times, but I can't understand why you keep defending Ford and their mistakes. We as consumers need to push back on these guys if we want a great company like Ford to improve not covering up for them


Because I understand good business decisions and killing vehicles that either don’t sell well or aren’t profitable and replacing them with new ones is not a mistake it’s good management.

 

Remember how killing Fusion and Focus was a “huge mistake”?  Turns out it was a smart move.

 

 

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Quotes from Jim Farley during yesterday's 2Q 2022 earnings call Q&A discussion with analysts and investors. Ford 2Q 2022 Earnings Advisory (q4cdn.com)

 

We absolutely have too many people in some places, no doubt about it.

We have skills that don’t work any more, and we have jobs that need to change.

We know our costs are not competitive at Ford. We are not satisfied.

The tension point for us, though, is complexity. Ford is way too complex.

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7 hours ago, coupe3w said:

 

Ford has a serious quality issue and that is what is driving buyers away. It has had this problem for some time and it's not getting any better in fact it is getting worse.

 

I think this is far more of an issue than Ford not offering what people want to buy.  We just took delivery of a bunch of new Super Duty trucks.  Panel alignment is awful and we are seeing multiple BCM failures.  And then there is the Bronco.....

 

All manufacturers are moving in the same direction with regards to product,  I don't think other manufacturers will be offering many types of vehicles Ford does not offer.  Sedans are dead and minivans are right behind.   

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13 hours ago, akirby said:


I love it when people only look at half of an equation.  What about Ford eating the Koreans lunch with F150, Superduty, Transit, Lightning and E transit?  What about Bronco and Ranger and Bronco Sport and Maverick and EV versions of those?  

Why can't ford be eating the Korean's lunch when it comes to sedans?  I realize it is a stagnating segment but Honda, Toyota, Kia, Hyundai seem to be doing ok.  Remember a butt behind the wheel of a Ford is better than a butt behind the wheel of a competitor. 

 

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12 hours ago, 7Mary3 said:

  Sedans are dead and minivans are right behind.   

 

Disagree on minivans - at least when it comes to Toyota and Honda. Toyota is sold out on the new Sienna hybrid, with waiting lists at dealers. Since Toyota just dropped significant investment into the Sienna to move it to their global chassis (I forget the designation) along with giving it a standard hybrid drivetrain, Sienna isn't going anywhere. If anything, they might add PHEV capability to Sienna from off the shelf parts already in use on RAV4 prime.

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7 hours ago, Footballfan said:

Why can't ford be eating the Korean's lunch when it comes to sedans?  I realize it is a stagnating segment but Honda, Toyota, Kia, Hyundai seem to be doing ok.  Remember a butt behind the wheel of a Ford is better than a butt behind the wheel of a competitor. 

 

When you have limited resources and the market is moving away from them, why spend money on a dying segment?

 



How bad were the sales to cause such a massive change? Let’s look at the data. In 2010, 11.6 million vehicles were sold. Of those, 50% were cars, 34% were SUVs, and 16% were trucks. In 2019, 17.1 million vehicles were sold. But this time, 50% were SUVs, 30% were cars, and 21% were trucks. This means that over that 10-year period, overall vehicle sales increased by nearly 50% – and during that time, cars went from being half of all vehicles sold to less than a third while SUVs swapped places with them.

 

https://www.autoinfluence.com/what-happened-to-the-sedan/

Accord sales

2010 311,381      
2011 235,625      
2012 331,872      
2013 366,678      
2014 388,374      
2015 355,557      
2016 345,225      
2017 322,655      
2018 291,071      
2019 267,567      
2020 199,458      
2021 202,676

 

Civic sales
 

2010 260,218  
2011 221,235  
2012 317,909  
2013 336,180  
2014 325,981  
2015 335,384  
2016 366,927  
2017 377,266  
2018 325,760  
2019 325,650  
2020 261,225  
2021 263,787  

 

Rather see that money put into a growth segment like the Maverick or Bronco

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7 hours ago, Footballfan said:

Why can't ford be eating the Korean's lunch when it comes to sedans?  I realize it is a stagnating segment but Honda, Toyota, Kia, Hyundai seem to be doing ok.  Remember a butt behind the wheel of a Ford is better than a butt behind the wheel of a competitor. 

 

Mainly because of the opportunity costs for Ford. Ford would need to invest a lot of resources in order to make the sedans previously in its U.S. product lineup competitive with the best in the segment (Honda, Toyota, Kia, Hyundai, Nissan). Those resources would provide Ford a better return if deployed to products for which Ford has a better reputation, or areas such as mobility services that have strong growth potential. 

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7 hours ago, Footballfan said:

Why can't ford be eating the Korean's lunch when it comes to sedans?  I realize it is a stagnating segment but Honda, Toyota, Kia, Hyundai seem to be doing ok.  Remember a butt behind the wheel of a Ford is better than a butt behind the wheel of a competitor. 

 

The Koreans are cancelling several sedans.  

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20 hours ago, akirby said:


Because I understand good business decisions and killing vehicles that either don’t sell well or aren’t profitable and replacing them with new ones is not a mistake it’s good management.

 

Remember how killing Fusion and Focus was a “huge mistake”?  Turns out it was a smart move.

 

 

I was referring to the recalls and quality issues. Not talking about killing off products.

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9 hours ago, Footballfan said:

Why can't ford be eating the Korean's lunch when it comes to sedans?  I realize it is a stagnating segment but Honda, Toyota, Kia, Hyundai seem to be doing ok.  Remember a butt behind the wheel of a Ford is better than a butt behind the wheel of a competitor. 

 


Again, you’re only looking at half the equation.  The products that replaced fusion and focus are bringing in more conquest customers and these customers should be even more loyal than sedan buyers who buy mostly on price anyway.

 

Every sale is not a good sale and some sales are better than others.  If Ford was just cancelling vehicles you might have a point but they’re not doing that - they’re replacing cancelled vehicles with new ones.

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33 minutes ago, akirby said:

Every sale is not a good sale and some sales are better than others. 

 

Definitely. This highlights a tenet of both Jim Hackett's fitness initiatives and the current Ford+ plan, to make quality of sales > quantity of sales at Ford.

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2 hours ago, akirby said:


Again, you’re only looking at half the equation.  The products that replaced fusion and focus are bringing in more conquest customers and these customers should be even more loyal than sedan buyers who buy mostly on price anyway.

  

Every sale is not a good sale and some sales are better than others.  If Ford was just cancelling vehicles you might have a point but they’re not doing that - they’re replacing cancelled vehicles with new ones.


I know I'm not the best example being an employee but I would 100% be driving a Ranger or F-150 right now if I didn't get a Fusion with a better engine, AWD and more features than my last one for essentially the same monthly payment as my last one. 
 

I can check the window stickers when I get home (I have both of them) but I'm pretty sure the MSRP between the two is within $2500. 

Edited by fuzzymoomoo
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