Ford to unveil radical new business plan to improve quality and profitability

[rperez817]

38 minutes ago, Captainp4 said:

Remember the part in the article where Farley wants to eliminate bracket engineers and make pieces/fasteners have multiple uses? This is what he's talking about and TSLA is far ahead of everyone else on reducing manufacturing cost because of things like this, even if you guys don't like the company. https://electrek.co/2021/10/05/tesla-building-model-y-bodies-single-front-rear-castings-manufacturing-first/

 

Statement from Farley.

Fasteners have to have at least three jobs. In the ICE world, fasteners can do one job fasten a carpet to the floor. But in the world we're going to, fasteners have to have three roles at a minimum. To do -- they have to locate, they have to fasten something. They have to make sure that it's put correctly together. It's a different world. You'll see it.

 

He is absolutely correct. Manufacturing BEV profitably requires totally different strategies and approaches compared to old fashioned ICE vehicle manufacturing. In particular, agile methods that Tesla pioneered for automotive manufacturing.

[Captainp4]

29 minutes ago, rperez817 said:

 

Statement from Farley.

 

 

 

He is absolutely correct. Manufacturing BEV profitably requires totally different strategies and approaches compared to old fashioned ICE vehicle manufacturing. In particular, agile methods that Tesla pioneered for automotive manufacturing.

Which is why I said it sounds like Farley is copying Elon's homework in the first place. Ford says it, Tesla says it, guys on a Ford forum: No, that can't possibly be true, you're a fanboi

[7Mary3]

I agree with what Farley says about fasteners, but he is pointing out the obvious.  Musk didn't come up with that idea.  Look at this part.  It locates an interior door panel, it fastens an interior door panel, and it makes an audible click when it is properly assembled.  And it's been around for decades.... 

 

Edited February 22, 2023 by 7Mary3

[fuzzymoomoo]

1 hour ago, Captainp4 said:

Remember the part in the article where Farley wants to eliminate bracket engineers and make pieces/fasteners have multiple uses? This is what he's talking about and TSLA is far ahead of everyone else on reducing manufacturing cost because of things like this, even if you guys don't like the company. https://electrek.co/2021/10/05/tesla-building-model-y-bodies-single-front-rear-castings-manufacturing-first/

Hackett was saying similar things. His example was having different wheel hubs for every vehicle when they could probably get away with only 4 or 5 or something like that. 

[fuzzymoomoo]

29 minutes ago, 7Mary3 said:

I agree with what Farley says about fasteners, but he is pointing out the obvious.  Musk didn't come up with that idea.  Look at this part.  It locates an interior door panel, it fastenes an interior door panel, and it makes an audible click when it is properly assembled.  And it's been around for decades.... 

 

I have PTSD from these damn things from my days installing door panels in final. 

[Captainp4]

36 minutes ago, fuzzymoomoo said:

I have PTSD from these damn things from my days installing door panels in final. 

I have PTSD from breaking them on any interior part I disassemble in my shop ?

[zipnzap]

On 2/17/2023 at 6:48 PM, rperez817 said:

J.D. Power's 2023 Vehicle Dependability Survey was publicized recently. To no one's surprise, Ford and Lincoln are 2 of the most problematic brands. 

 

 

How are Dodge, Jeep and Ram so far apart from Chrysler?

[Captainp4]

40 minutes ago, fuzzymoomoo said:

Hackett was saying similar things. His example was having different wheel hubs for every vehicle when they could probably get away with only 4 or 5 or something like that. 

Remember when Ford thought it was a good idea to use a 7 lug wheel on the F150HD/F250LD on the 97-03 trucks? Ford always does goofy stuff like that across the board, makes customizing a nightmare. I know they don't care about the aftermarket, but being a Ford guy can suck sometimes with how much they change everything.

[akirby]

51 minutes ago, Captainp4 said:

Which is why I said it sounds like Farley is copying Elon's homework in the first place. Ford says it, Tesla says it, guys on a Ford forum: No, that can't possibly be true, you're a fanboi

Nobody said Tesla hasn’t innovated the assembly process or that they haven’t simplified and cut costs or that Ford needs improvement in those areas,   But that doesn’t change the facts about Tesla’s financials and the difference between making the same 4 similar body styles for a decade at lower volumes and making a full range of vehicles at 10x the volume.  Some things don’t scale up as easily.  
 

Try looking at the facts and don’t just blindly accept all the hype.

[Captainp4]

40 minutes ago, akirby said:

Nobody said Tesla hasn’t innovated the assembly process or that they haven’t simplified and cut costs or that Ford needs improvement in those areas,   But that doesn’t change the facts about Tesla’s financials and the difference between making the same 4 similar body styles for a decade at lower volumes and making a full range of vehicles at 10x the volume.  Some things don’t scale up as easily.  
 

Try looking at the facts and don’t just blindly accept all the hype.

The oldest is the S. I'll concede the sheetmetal hasn't changed much, but to say they haven't changed under the sheet metal is just flat out wrong.
the 3 is 5? years old, Y even newer. Semi ramping, Cybertruck coming this year even if you still think it won't. I don't particularly care for the looks of most of the models (I do think the S plaid is pretty damn cool),  but the processes and results are what Ford needs to be looking at when going after BEV sales. The giga plants are scaling as we speak and they are pretty much on target for their 50% yoy long term growth while maintaining industry leading margins.. and still able to cut prices. They're definitely doing something right and I think Farley recognizes that.

[rperez817]

1 hour ago, Captainp4 said:

the processes and results are what Ford needs to be looking at when going after BEV sales. The giga plants are scaling as we speak and they are pretty much on target for their 50% yoy long term growth while maintaining industry leading margins.. and still able to cut prices. They're definitely doing something right and I think Farley recognizes that.

 

Yup, Farley is paying full attention to Tesla - its industry leading BEV operations, and its mission for sustainability - because he knows that Ford Motor Company's survival depends on it. I think Farley is among the most perceptive legacy automaker CEOs in this regard.

[tarheels23]

3D printing?

[tarheels23]

7 hours ago, rperez817 said:

 

Yup, Farley is paying full attention to Tesla - its industry leading BEV operations, and its mission for sustainability - because he knows that Ford Motor Company's survival depends on it. I think Farley is among the most perceptive legacy automaker CEOs in this regard.

but more importantly the Ford Family knows their future depends on it, that is why the $23.5 B loan was made so the family can continue to be the owners.

[mackinaw]

48 minutes ago, tarheels23 said:

but more importantly the Ford Family knows their future depends on it, that is why the $23.5 B loan was made so the family can continue to be the owners.

 

What 23.5 billion dollar loan?

[tarheels23]

30 minutes ago, mackinaw said:

 

What 23.5 billion dollar loan?

2006

[Bob Rosadini]

9 hours ago, 7Mary3 said:

I agree with what Farley says about fasteners, but he is pointing out the obvious.  Musk didn't come up with that idea.  Look at this part.  It locates an interior door panel, it fastens an interior door panel, and it makes an audible click when it is properly assembled.  And it's been around for decades.... 

 

Case closed...I was going to make same point.  I guess I'm thick.  By the way in that press event interesting comment....most of Electric 150 buyers were first time picks up buyers.  If so not a good supporting statement about commercial application..at least at this point given our charging nertwork.km, 

[mackinaw]

2 hours ago, tarheels23 said:

2006

 

That's 17 years ago!  Who in the hell even cares.

[AM222]

On 2/18/2023 at 1:48 AM, rperez817 said:

J.D. Power's 2023 Vehicle Dependability Survey was publicized recently. To no one's surprise, Ford and Lincoln are 2 of the most problematic brands. 

 

Not surprising after Ford having the most recalls in 2022 (at least in North America), they just had another recall that involves the Ford F-150, Mustang, Explorer, Bronco, & Lincoln Aviator, and it's only the second month of 2023.

On the EV side, Ford had to pause F150 Lightning production because a Lightning's battery caught fire during its pre-delivery quality check. Hopefully this is isolated and won't cause any recalls. 

There are many issues that don't extend to Ford vehicles built outside North America but it does affect the image of the blue oval every time it come up on the news. 

-------------------------------------------------------------------------------

 

11 hours ago, zipnzap said:

How are Dodge, Jeep and Ram so far apart from Chrysler?

Perhaps the Pacifica (a Chrysler exclusive platform/model) contributed to its low ranking?

Edited February 23, 2023 by AM222

[rperez817]

48 minutes ago, AM222 said:

There are many issues that don't extend to Ford vehicles built outside North America but it does affect the image of the blue oval every time it come up on the news. 

 

Speaking of image, Ford's constant quality issues certainly give credence to the saying "Fix Or Repair Daily". Both for Ford vehicles themselves and for the company's operations.

[AM222]

11 hours ago, rperez817 said:

 

Speaking of image, Ford's constant quality issues certainly give credence to the saying "Fix Or Repair Daily". Both for Ford vehicles themselves and for the company's operations.

I see that a lot, it's sad. Considering the fact that Ford in other parts of the world have a better track record.

Edited February 23, 2023 by AM222

[tarheels23]

20 hours ago, mackinaw said:

 

That's 17 years ago!  Who in the hell even cares.

my point which I evidently missed was that the F family will do everything they can do to keep F a viable entity as that is their only hope of future $$.  If F went BK the family would lose their ownership advantage with special stock.

[jpd80]

On 2/23/2023 at 2:54 PM, rperez817 said:

 

Speaking of image, Ford's constant quality issues certainly give credence to the saying "Fix Or Repair Daily". Both for Ford vehicles themselves and for the company's operations.

Ironically, the premium prices being asked by Ford are actually making buyers pay for Ford’s own inefficiencies.

 

Buyers have been doing their part but it’s clear that Farley has been asleep at the switch for years, all began

under Jim Hackett and his cost cutting. It’s been that long since anyone spoke about quality because they,

the Ford Executives all knew to a man that quality is the first thing to suffer under cost cutting.

[Bob Rosadini]

18 hours ago, jpd80 said:

Ironically, the premium prices being asked by Ford are actually making buyers pay for Ford’s own inefficiencies.

 

Buyers have been doing their part but it’s clear that Farley has been asleep at the switch for years, all began

under Jim Hackett and his cost cutting. It’s been that long since anyone spoke about quality because they,

the Ford Executives all knew to a man that quality is the first thing to suffer under cost cutting.

No doubt.  As I said before, Farley was pursued by Mulally as he was perceived as a marketing genius-at least I think that was the reason.  Along the way he convinced Bill Ford he was the solution to Ford's problems-as did Hackett before him.

Again, seems to me Farley has bet the farm on an all  out EV future, and that made him look good to the financial media ...

As for the recent "press call", seems like a lot of BS and I would like to see someone make a logical summary of all of that BS.  No Kool Aid please, just a concise summary that this dumb old blue collar guy who flunked out of engineering but managed to get a business degree will understand.

Again, something that jumped out of  that "call" was the statement that while the electric 150 is  such a success, the majority of the people that are shelling out big numbers for that vehicle are first time pick up buyers-not the base that made the 150 the  number one selling vehicle for how many years?

 

And while we will see another big cut in manpower to "cut costs so the ICE side of the business can continue to fund the success of the EV side", everyone thinks the F1 rabbit hole makes a lot of sense at this critical time?

[Harley Lover]

On 2/18/2023 at 2:46 PM, Harley Lover said:

Here's a transcript of the 'fireside chat' - I hope everyone reads through this and come back with commentary and thoughts:  https://seekingalpha.com/article/4578609-ford-motor-company-f-presents-wolfe-research-global-auto-auto-tech-and-auto-consumer

 

A lot to unpack from the 'fireside chat', most of which has not been commented on here. Points of interest:

 

Farley believes the Direct Sales Model (Tesla) will be forced to change as a critical mass of their vehicles are on the road in a market: 

Quote

But the direct model that's emerged is going to change, too. If I could take this whole room and everyone online and go to Norway, you would see a very different Tesla in Norway, physical outlets, a lot higher cost because their UIO (units in operation) was so large in Norway. They can't get by with just online and remote service. It's there's a point where your units in operation gets so big that you need to handle used cars and trade-ins, complicated financing and especially physical repair service. So, the direct models will get more expensive. 

 

At the same time, Farley reiterates that Ford must move closer to the direct model via its dealers: 

Quote

But we think we have to really change fundamentally the cost of our distribution for retail EVs. Go online, okay? We need to cut the number of people it takes to sell a vehicle, and that needs to be a really simple couple of clicks to buy online e-commerce. We have to get the inventory out of the system. Inventory is -- the cost of inventory is very expensive and it's spread across many different people. So it's not obvious. But when you actually do the calculation, it's an enormous cost of that $2,000 (cost differential), it's like 1/3. So, we have to get the inventory out, and we're going to go to that model.

The next thing is we have to make sure that we do things remotely so people don't have to go into a physical dealership and so all transactions, pickup delivery. And probably the most fundamental change for us is non-negotiated price at the brand level. So when you buy a Ford EV in January next year, customers will negotiate. And that takes people and money and time for all that to happen. Non-negotiated price really facilitates e-commerce, and it's good for the customer too.

 

 

Edited February 26, 2023 by Harley Lover

[Harley Lover]

More from the 'fireside chat'. 

Farley looks at Blue as a carefully constructed portfolio of products/services: 

Quote

And what's different about Ford is our Blue business, we have reconstructed the segments we compete in very carefully, and they are the segments that probably won't go electric immediately. The brands that are in the two-row crossover business and the passive car business, the EV transition will be much faster for their customers. A Super Duty, an F-150, a Bronco customer, they're different. So -- and we've seen that already.

In the very first inning of a nine-inning game, RVs are like 70% incremental to the Company. And I mean we have so much upside on Pro. We're 50% of the market. When we get the cycle going, like we're seeing now, I mean, we haven't had a new product in Europe for several years in commercial, and our share keeps going up. We use that as we're focusing on Pro, the services side of Pro.

 

I bolded a comment above: "They are segments that probably won't go electric immediately". In the context of F150, I think this is a very important comment. I think Farley seems to be implying that Ford recognize that there is a tremendous amount of ongoing revenue potential in the ICE F150, and Ford will not walk away from that any time soon. As upcoming quotes will indicate, Farley sees incremental growth and market share increase from BOC (and a new/different customer to Ford).

 

Expectations for future sales and the composition of those sales (and market growth):

Quote

Q: You're targeting 2 million electric vehicles capacity by 2026. We assumed about 3/4 of that will be North America. It's kind of proportionate to the size of the Company. Maybe that's right or wrong. But we have applied some assumptions to the ramp and thought, okay, maybe by then, there's 1.5 million EVs sold here in North America and maybe 1/3 of those are incremental to Ford's market share.

James Farley

1/3?  The design of the vehicles in our hands, right?

Q:  Yes.

James Farley

 I'm not putting in that kind of capacity for 1/3 incrementality.

Q: Where do you see that coming from (sales growth in EVs)?

James Farley

We see it on the commercial side coming from our traditional competitors who have not moved in the same way we do. We'll be on our second cycle of EVs while they're coming out with their first. Some won't even have their first. And then on the passenger car side, we see it from the import brands like we're already seeing it. We're already seeing it from them. It's interesting. Lightning customers are mostly new to pickups. Think about that. Pickup is 13% of the industry. Almost all of our Lighting sales are not to traditional pickup customers.  The people who have hesitated to buy a pickup but like the imagery and the capability but now they have lockable storage, they have a mobile generator, it's a different kind of product than a traditional pickup, and we're seeing new people. So -- but I think a lot of those, the trucks and the commercial EV from our traditional competitors who aren't moving in fast or investing or executing as well, but we'll have a lot of conquest like we're seeing a Maverick. Most of Maverick sales are Toyota and Honda Civic, Corolla, especially RAV4.

 

Edited February 25, 2023 by Harley Lover