Ford losing $5000 a car

Interesting:

http://www.businessweek.com/autos/content/may2007/bw20070531_148026.htm?chan=autos_autos+index+page_ top+stories

But there is clearly much more work to be done in union negotiations and the vehicles Detroit is selling. In North America last year, GM lost $1,436 a vehicle, Chrysler lost $1,072 per car, and Ford bled a staggering $5,234 per vehicle in red ink, according to Harbour

That's what happens when your static costs are built like the widest portion of an inverted pyramid. They need to slim down, just like GM, because in today's market they just can't sell as many vehicles as they need to in order to stay profitable.

They need to slim down bigtime.

Although, that figure could confuse some as I believe that's total losses divided by vehicles sold. So, they're not really losing that money on each car; they're just spending more then they are bringing in... if that makes any sense.

Ford losing $5000 a car

Yeah, but they're making it up on volume ;)

As to their structural costs, remember that Ford had a huge buyout program too, even larger than GM's based on the number of employees. It was just started later so the effects won't be showing up yet.

If they would just keep outsourcing things to China and S Korea more they could save cost.....:rolleyes:

It was just reported that Ford saw a 6.8% decrease in May auto sales, but results are better than expected.

A few items:

1. US automakers will ALWAYS be at a handicap to Japanese automakers as far as labor cost per vehicle. Japan has has universal health care coverage since 1961. Japanese businesses are unburdened by retiree health coverage (the majority of health care expense is on people over 60).

2. Ford is in the midst of a buyout. Not a big one like GM, but a gigantic one that will eventially par down nearly 50% of it's total blue collar force. That cost is being factored in.

3. Finally, according Time magazine, Ford has the lowest retiree health care costs of all 3 US automakers:

GM is at $1600 per car, Chrysler is at $1500. Yet Ford is only at $1200 per car.

Obviously, there's something else other than health care that accounts for the other $4,000 of that $5200 per car that Ford is "supposedly" losing.

If they would just keep outsourcing things to China and S Korea more they could save cost.....:rolleyes:

Maybe if UAW workers didn't expect $20-$30 an hour plus rediculous benefits, automotive companies wouldn't have to.

Maybe if UAW workers didn't expect $20-$30 an hour plus rediculous benefits, automotive companies wouldn't have to.

The UAW only expects what they are given. The big three have been very generous in the past and now are paying the consequences. I'm not defending the UAW or the domestic makes but the UAW has gotten just about everything they wanted over the years and only nobody had the guts nor the foresight to see what was going to happen. If the big three started their pushing back of the UAW 20 years ago things may have been move even by now. The damage is already done and now the contracts must be altered or they face bankruptcy.

Maybe if UAW workers didn't expect $20-$30 an hour plus rediculous benefits, automotive companies wouldn't have to.

Yeah but you know as well as I do that no American would work for the same wage as Kia would pay a Korean.

Yeah but you know as well as I do that no American would work for the same wage as Kia would pay a Korean.

Koreans do not work cheaply, and Korea is not a LCC.

A few items:
Obviously, there's something else other than health care that accounts for the other $4,000 of that $5200 per car that Ford is "supposedly" losing.
Apparently they just figured Losses / Cars Sold -- so that "per car" loss includes all of the restructuring charges that Ford has taken to get back to profitability.

Maybe if UAW workers didn't expect $20-$30 an hour plus rediculous benefits, automotive companies wouldn't have to.

Thats not an unreasonable wage, at $30.00 thats less than 60k a year, now I don't know about all the other UAW perks, but if they switched to a 401k and some sort of healthcare that required money every pay check, plus paying into things like long term disability, life insurance, dental, no bonus pay, ect then 30 bucks an hour would just make a livable wage (assuming they dont have any tax shelters)

It's not the Unions fault.

It's Bill Fords fault and Company.

He wasn't asked to leave...he was FORCED out. There was an internal audit when he was chairman and it all fell on his shoulder. He had to fork out the big $$$$ on whomever was available to cover his ass.

I've also been hearing (here is a scoop) that Mark Fields will not be around much longer as well. Take it for what you will but from what I've heard the Mullet wearing man won't be around much in the next say....year.

Good thing Lutz wasn't available...cause I have a feeling Lutz would have told them to go **** themselves.

I don't believe they are losing that much per car. They'd be out of business.
Instead, they are losing money when, and here's the kicker, compared to their PLAN.
Most companies have an idea, or a plan of what they want their profits to be in a month or quarter. When they don't meet their plan, they say they have lost money. Which, of course, is BS.
They didn't lose money, they just didn't make as much as they wanted. And they call that a loss. Rediculous!

I find it curious that there are people that defend the expectation that someone is justified to make 60k a year for a largely manual and not horribly skilled job. I make a lot less than that and am busting my tail, keeping detailed metrics of my impact to the company and my department, and am a significant part of actual growth.

But you guys think some fella bolting in car-seats on a Focus over and over should get almost double my wage? And more, if he can get away with it?

I find it curious that there are people that defend the expectation that someone is justified to make 60k a year for a largely manual and not horribly skilled job. I make a lot less than that and am busting my tail, keeping detailed metrics of my impact to the company and my department, and am a significant part of actual growth.

But you guys think some fella bolting in car-seats on a Focus over and over should get almost double my wage? And more, if he can get away with it?

It's not that they should be making less. You should be making more.
I'm not sure what you do, but if you have a college degree and have been working a few years in your industry, they're not paying you enough.
Unfortunately, most companies don't want to pay a good wage these days.

Oh, and autoworkers don't start out at $30 per hour. They start around $14 per hour. Maybe after 20 or 30 years they will be up to that higher amount.

Interesting articles below:

Report reveals that American men in their 30s earn less than their fathers did, as family income growth decelerates.

http://money.cnn.com/2007/05/25/pf/mobility_study/index.htm?postversion=2007052518


Workers lose traction over past 10 years

http://money.cnn.com/2006/09/01/news/economy/state_working/index.htm

Maybe if UAW workers didn't expect $20-$30 an hour plus rediculous benefits, automotive companies wouldn't have to.

The issue is not about pay or benefits. It's about healthcare costs. Period. The job bank's days are numbered, and even the union knows this. The recent buyouts cleared a good portion if not most of "The Bank". If GM got the UAW to agree to an HMO or pay the same for health care as white collar workers do, or the UAW agrees to take over management of member's healthcare, there wouldn't be a need for any negotiations, and GM, Ford, and Chrysler would be in Nirvana.

Today, the UAW is essentially a shadow of itself because over the past 30 or so years, efficiency has cut the amount of time as well as the number of workers to manufacture a vehicle.

In 1980, UAW membership was 1.5 million and it took 45 hours to make a car. By last year membership decresed 67% (only half million total) and time to assemble a vehicle at GM is down to 32 hours. Today, a UAW worker is just as likely to man a machine console, do preventive maintence on assembly line equptment as he or she is to turn a wrench.

The problem is that it required so many workers in the old days to make a car, and those armies of workers have retired and are covered for life. Wouldn't be a big deal say, if GM still owned 52% of the US new vehicle market and health care costs barley rose more than inflation. But when you are scrapping to maintain 22% of the market, can't raise prices due to intense competition, unchecked health care costs you're paying are rising an average of 12% per year and doubling every 8-10 years, and are competing with companies from countries where health care is covered by government and pressure to keep increases down is enormous, and each worker you have has to produce enough to support 3 or more retired workers, things start looking pretty dismal. Paying union wages is childs play and covering today's workforce's medical cost would be a welcome break (there's far fewer of them, they're healthier, and they contribute to their costs).

As far as pay, as pointed out pay starts at $14 per hour. As skilled labor, that's not much. Anyone who thinks $20 to $30 per hour for someone who has worked many, many years doing a particular job is alot of money needs their head examined. Plumbers make more. ALOT more. Garbage men..er... Sanitation Engineers make as much if not more. There are Hosts and Maître des at resturants that make $16 to $20 per hour. The average person bringing food to your table at a medium class resturant is making an average of at least $20 per hour including tips. Minimum wage in San Francisco is $10 per hour, and it isn't even in the top 10 of areas of highest minimum wages. Washington DC ($11.75 for any contract, including concessions), Albany NY ($10.25), Nassau Co. NY and Ventura Calif (both at $12.50), Brookline MA ($10.25), Syracuse NY ($10.08 w/ health care, $11.91 w/o), Miami ($10.58 on any business that recieves city contracts), Louisville KY ($11 per hour starting next month).
http://www.livingwagecampaign.org/index.php?id=1958

If you live in a depressed area, you're going to be making peanuts compared to what is actually the norm everywhere else.


If you are jealous of someone earning $20-30 per hour because you have a college degree and they don't, it's your own fault. You picked an area where pay is low. Hopefully, you were at least smart enough to pick an area that you love so money isn't the reason for getting up in the morning.

http://www.bls.gov/oco/cg/cgs012.htm



It's not the Unions fault.

It's Bill Fords fault and Company.

He wasn't asked to leave...he was FORCED out. There was an internal audit when he was chairman and it all fell on his shoulder. He had to fork out the big $$$$ on whomever was available to cover his ass.

I've also been hearing (here is a scoop) that Mark Fields will not be around much longer as well. Take it for what you will but from what I've heard the Mullet wearing man won't be around much in the next say....year.

Good thing Lutz wasn't available...cause I have a feeling Lutz would have told them to go **** themselves.

Yes, I'd be placing bets against Fields lasting much longer as well. Ford's outlook is improving, but I think Alan Mulally's getting to the point where he's going to clean more house. Unfortunately, I think Fields is the biggest next target.

Fields was behind most if not all of the questionable vehicle naming decisions, got into hot water about his commuting vehicle (company plane to fly to Florida every week), but most of all it's the lack of success of Ford's "Way Forward", and the flexibility he supports which was an asset at first seems like (rightly or wrongly) indecision today.

It's not that they should be making less. You should be making more.

bingo! Your job has been devalued. In the mad rush to become gobally competitive, we are aiming for the lowest common denominator. Worse yet, we've had this crap shoved down our throats for so long, we accept it hook line and sinker and get pissed when we see somebody earning a decent wage (and to be honest, who wouldn't do the same as the UAW if given the chance - dont BS yourself) for what we see as an otherwise menial task.

Everyone is entitled to get whatever they can for their work. I don't begrudge the guy who screws rear-view mirrors on Crown Vic's all day his $30an hour or his free Viagra any more than I do Alex Rodriguez's $120 million.

That said, there is no reason that anyone should expect to live at the level of comfort that they choose doing precisely what they want in the precise location that they want to do it, simply by virtue of being born. You have to compete if you want to succeed.

If you want to get paid more for what you do, do something that is of more value to the world.

Sure, do more - earn more, but there still needs to be a fair wage, I dont give a crap if your flipping burgers, screwing widgets together or designing artifcial brain implants or determining the fate of western civilization. Driving down the standard of living of somebody for the sake of global competitiveness is BS. Where does it stop, and what level does it stop at?

It stops when the industrialized nations have the same standard of living as the poor nations :shrug:

It stops when the industrialized nations have the same standard of living as the poor nations :shrug:
EXACTLY.

And how do you percieve that to be?
Will we ALL be happy and wealthy, or will we ALL be stretched and struggling?

Remember, there is only so much cake on the table... the more who show up at the party, the less cake for each person there. :think:

I find it curious that there are people that defend the expectation that someone is justified to make 60k a year for a largely manual and not horribly skilled job. I make a lot less than that and am busting my tail, keeping detailed metrics of my impact to the company and my department, and am a significant part of actual growth.

But you guys think some fella bolting in car-seats on a Focus over and over should get almost double my wage? And more, if he can get away with it?

You don't really know what goes on inside a car factory, do you Craig?

Wow! You guys are complaining for making "only" $16/hour when most poor nations earn around $5/day (thats govt mandated minimum wage). A lot of families in depressed areas outside the US survive on less than $2 a day. Millions live below poverty line. I see alot of skilled people in asia who cant even find decent jobs. And you guys are whining because you cant eat most of the "cake"? You guys are living like kings compared to these poor fellows. But of course, they were born at the wrong place.

Wow! You guys are complaining for making "only" $16/hour when most poor nations earn around $5/day (thats govt mandated minimum wage). A lot of families in depressed areas outside the US survive on less than $2 a day. Millions live below poverty line. I see alot of skilled people in asia who cant even find decent jobs. And you guys are whining because you cant eat most of the "cake"? You guys are living like kings compared to these poor fellows. But of course, they were born at the wrong place.

And in these countries less money goes a LOT farther. Indian phone support techs got paid $5k a year when I was there on business and I assure you that afforded a very comfortable lifestyle for them

You don't really know what goes on inside a car factory, do you Craig?

I know that a factory worker on a line is not doing CAD-work, project management, product launch, brand management, or electrical engineering.

I know you're just doing your usual "take a swat when I can to look superior" routine, but the fact of the matter remains that working on an assembly line is not rocket science, especially as robotics take over more and more of the precision-skilled tasks. It's probably little different from working in a factory (a job I have done), where there is some shakiness at first but the neverending repetition makes for a quick learning curve.

I will concede that my interpretation of the thread initially was that these guys were making 60k a lot earlier than has now been explained. But it reminds me of garbage men getting paid out the ass or union folks ensuring that a city bus driver gets a sizable chunk of change in each check. More money makes everybody happy, but it doesn't make sense when you're dealing with a basic skillset.

But anyway, Guy has explained that it is the healthcare costs that kill. So I guess this is all a moot point.

EXACTLY.

And how do you percieve that to be?
Will we ALL be happy and wealthy, or will we ALL be stretched and struggling?

Remember, there is only so much cake on the table... the more who show up at the party, the less cake for each person there. :think:

True, but the slices of cake, depending on the strata are becoming disporportionate as time goes on. My boss who is fond of telling me that I make alot of money for what I do was shocked when we were talking about what sort of house I could comfortably afford in my AO. I had to remind him, at best I could be considered upper lower income class.

Wow! You guys are complaining for making "only" $16/hour when most poor nations earn around $5/day (thats govt mandated minimum wage). A lot of families in depressed areas outside the US survive on less than $2 a day. Millions live below poverty line. I see alot of skilled people in asia who cant even find decent jobs. And you guys are whining because you cant eat most of the "cake"? You guys are living like kings compared to these poor fellows. But of course, they were born at the wrong place.

Why are we comparing ourselves to foreigners? Who gives a rat's a$$ about them?!
They've been stealing OUR jobs, taking food off of OUR tables and now I'm supposed to worry about their standard of living but I can't worry or complain about the declining standard of living for AMERICANS? Are you kidding??!!

As far as I'm concerned, they all should be dirt poor. They shouldn't have ANY industries.
America should produce EVERYTHING the world needs. Keeps them weak and us strong. The way it should be.

Wow! You guys are complaining for making "only" $16/hour when most poor nations earn around $5/day (thats govt mandated minimum wage). A lot of families in depressed areas outside the US survive on less than $2 a day. Millions live below poverty line. I see alot of skilled people in asia who cant even find decent jobs. And you guys are whining because you cant eat most of the "cake"? You guys are living like kings compared to these poor fellows. But of course, they were born at the wrong place.

You are not far off, but your attitude about it is wrong IMO.

I DO WANT to stay on the high side of the curve - no question.
I want to be healthy, and I want my family to be healthy too... as much as can be.
I want to afford them the best opportunitites for a safe and free life.

Meanwhile, I am actually an advocate for the help and support of those less fortunate.
Who on this board is constantly complaining about the working conditions in China? The environmental issues they face? Who advocates support for elimination of exploitation of child labor? You won't have to search far to see that I cry out for the little man - especially those outside our borders.

I also choose to support them personally when and how I can.
I taught english to Mexicans in a Catholic Church's life-training program (no pay to enroll, no pay to volunteers).
I have given (and still do) money to charities that support my beliefs.
I have helped Chinese "kids" while I was there and email them from home still to check on their progress. (One girl - Michelle Zhang - actually applied and has been accepted to University of Michigan this fall. Her father was a school teacher in the Guangzhou province, but was stripped of his job and benefits when his wife accidentally became pregnant with another child - Michelle. They had no jobs, no healthcare, and no income thanks to their government when Michelle was born.)
For the record, we were hiring machine operators at $.29USD/hr last year when I was there. Engineers were getting $120USD/month. That's hideous by our standards... BUT... did you know....
They get to live in dorms at the worksite free for $20/month
They get meals provided in the cafeteria free
They get free medical care and assistance at the worksite
They get medications free at the worksite
They get hygiene and oral care provided free
Girls get "those things" free
Birth control is free (condoms or pills)
Field trips and education is provided free
They are provided uniforms and services
They have access to free washers and dryers in the dorms
I can go on and on. Point is, the average Chinese person can live on less than $1 USD per day. No, it's not a luxurious lifestyle, but it's not a bad one by their standards, and it's a helluva lot better than living in a grass hut in a rice paddy with no income and no healthcare and no social assistance.

Out of curiosity, just how much have you done to help improve the world for the "have-nots"? It's easy to talk about things, but different to act on them.

Turns out that I am going to a Mexican wedding this Saturday. A long-time friend of mine is getting married. He started out as a bus boy in a Mexican restaurant in Lexington, NC. I befriended him back in about 1998 or so. He was so timid and shy because he was not smart, didn't speak english (why he was a bus boy and not a waiter), and wasn't too great-looking either. Today, he is managing a restaurant in Elkin, NC and is doing great - ready to marry and start a family. I am proud to be associated with this guy and have no problems going to his wedding.

So preach your sermon, but be very careful of your audience.
It is more practical to help others when you are able, than for everyone to be in need all at the same time.

Personally, I want to stay on top and help others to climb up to MY level - as opposed to reducing my standards to accomodate those below me. Self-preservation is not an evil - it's a force of nature.

Your high stock in my book climbed even higher. :cool:

Your high stock in my book climbed even higher. :cool:

Tx. :bow:

Not trying to impress anyone or be some kind of role-model, just living my life based on values and the way I was taught by some ol' Appalachian mountain folks that climbed out of literal nothingness to become "something" - no matter how small. My parents are my role models - have been, still are.

If I had a wish, it would be for others to start realizing the bigger picture - how well we have it here and how easily we can lose it.

:)