Ford: $4/gal gas is here to stay; "we reached a tipping point"
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Ford: $4/gal gas is here to stay; "we reached a tipping point"
Ford: $4 gas through '09 = more losses
Ford Motor Co. executives say they believe that $4 gas is here to stay, resulting in a fundamental consumer shift away from gas-guzzling SUVs and pickups and causing continued losses at its core North American auto unit.
The company said it expects gas prices to remain in the range of $3.75 to $4.25 a gallon through the end of 2009. And that expectation prompted the nation's No. 3 automaker to announce deep production cuts for what has been its best selling and most profitable vehicles for several decades and could lead to more plant closings and job cuts down the road.
"We saw a real change in the industry demand in pickups and SUV in the first two weeks of May," said Ford Chief Executive Alan Mulally. "It seems to us we reached a tipping point."
Ford now believes that the change in vehicle choice is structural, not cyclical, Mulally said. Ford reduced its forecast for industrywide sales and said its own market share will now be about 14% of retail sales, at the low end of its earlier forecast.
The company said it expects gas prices to remain in the range of $3.75 to $4.25 a gallon through the end of 2009. And that expectation prompted the nation's No. 3 automaker to announce deep production cuts for what has been its best selling and most profitable vehicles for several decades and could lead to more plant closings and job cuts down the road.
"We saw a real change in the industry demand in pickups and SUV in the first two weeks of May," said Ford Chief Executive Alan Mulally. "It seems to us we reached a tipping point."
Ford now believes that the change in vehicle choice is structural, not cyclical, Mulally said. Ford reduced its forecast for industrywide sales and said its own market share will now be about 14% of retail sales, at the low end of its earlier forecast.
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From: Sterling Heights, MI
It's amazing to me that it has taken this long for Ford (AND GM, which is not immune to similar criticism) to realize that rising gas prices were not just a temporary hiccup but a sign of things to come.
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From: Wichita, KS
Ford is doing better IMO at changing with the Escape hybrid which has been out a while now and with the upcoming Fusion hybrid. They also have the eco-boost engines which will help even further. I still think they need a focus hybrid and maybe a direct competitor to the Prius. A distinct hybrid only vehicle.
GM has the truck and SUV hybrids, but I am not sure that will be enough. I think unless people really need the utility of one of these vehicles they will not buy one. The days of buying an SUV just to have one are over.
The Volt should be here now, along with a cobalt hybrid and/or a hybrid exclusive vehicle.
It will be interesting to see how much affect the collapsing high profit segment of GM and Ford has on their respective recovery efforts.
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Joined: Sep 2005
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From: Motor City
Its not that they havent realized it all along that high gas prices were here to stay. Its that up until this point, the effects were not very drastic at all. Large pickup sales were relatively stable even at 3.30/gallon, but since the start of 2008. just in the past few months though, the market has completely collapsed as people hit the "tipping point" where it is no longer worth their while to enjoy the luxury of the nicer gas guzzler, myself included...i bought a new F-150 in November and was completely fine at 3.50/gallon, but this past hike to the 4.00 mark is tough, its only honestly a few extra bucks a month, but mentally it is alot harder to let $90 fillups slip by vs. $65 a week like i had been used to
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Joined: Aug 2000
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From: Sterling Heights, MI
Its not that they havent realized it all along that high gas prices were here to stay. Its that up until this point, the effects were not very drastic at all. Large pickup sales were relatively stable even at 3.30/gallon, but since the start of 2008. just in the past few months though, the market has completely collapsed as people hit the "tipping point" where it is no longer worth their while to enjoy the luxury of the nicer gas guzzler, myself included
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From: Oakland, California
I fully expect to see more reaction like this coming from GM in the near future.
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From: Albany, NY
I just saw Diesel for $5.19 on my way to work today 
I'm glad now to see GM had the foresight to cancel the next Northstar. They need to put that money into getting more 6 speeds out as soon as they can.
Its time the automakers start gearing the 4cyl cars for MPG and not 0-60
I'm glad now to see GM had the foresight to cancel the next Northstar. They need to put that money into getting more 6 speeds out as soon as they can.
Its time the automakers start gearing the 4cyl cars for MPG and not 0-60
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From: Wichita, KS
Oh really? GM is already reacting to this. Case in point, the 2.4L-4/A6 package was made available in the Malibu LTZ, and will be available this fall (MY2009) in the LT. Using the EPA's data on the Malibu Hybrid vs. the Malibu LTZ 2.4L, the Hybrid will save you less than $200 a year on fuel. Does $200 justify buying the hybrid version? It certainly wouldn't for me once the 2009's roll out.
I fully expect to see more reaction like this coming from GM in the near future.
I fully expect to see more reaction like this coming from GM in the near future.
the 2.4L-A6 is definitely a good step and they are putting it on the right car.
Even if the actual money saved is not a lot, the perceived difference between a hybrid will probably be enough to drive quite a few sales.
I think people would be willing to pay more up front for a hybrid because they feel like it would be a buffer to gas prices that seem to be climbing with no end in sight (buying peace of mind).
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From: Oakland, California
Even if the actual money saved is not a lot, the perceived difference between a hybrid will probably be enough to drive quite a few sales.
I think people would be willing to pay more up front for a hybrid because they feel like it would be a buffer to gas prices that seem to be climbing with no end in sight (buying peace of mind).
I think people would be willing to pay more up front for a hybrid because they feel like it would be a buffer to gas prices that seem to be climbing with no end in sight (buying peace of mind).
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From: All around
I'll go find the article later tonight - but most people just dont look at the numbers. Never overestimate stupidity of a consumer
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From: SoCal
The Domestic brands have reacted to this current energy issue like they always do. Several days late and millions of dollars short. The writing has been on the wall for a solid 5 years that gas is going up because of increased consumption by developing nations. They should have seen this first hand because the cost of steel and other products used to build cars was going up before oil did.
They are always late to make the change and because of it suffer the worst economicly.
You'll like that truck. I had a '99 S10 5spd extended cab with 4.10 gears and it was a fun and useful truck. Lots of shifting but it was good on gas and fun to drive.
They are always late to make the change and because of it suffer the worst economicly.
You'll like that truck. I had a '99 S10 5spd extended cab with 4.10 gears and it was a fun and useful truck. Lots of shifting but it was good on gas and fun to drive.
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From: Kansas City, MO
The Domestic brands have reacted to this current energy issue like they always do. Several days late and millions of dollars short. The writing has been on the wall for a solid 5 years that gas is going up because of increased consumption by developing nations. They should have seen this first hand because the cost of steel and other products used to build cars was going up before oil did.
They are always late to make the change and because of it suffer the worst economicly.
They are always late to make the change and because of it suffer the worst economicly.
Good thing GM hasn't been working on anything like BAS, BAS II, the 2-Mode system, the plug in system, the Cobalt XFE, the 4 Cylinder 6-speed auto Epsilons, the 1.4 Liter turbo Ecotec, HCCI and the Volt.
Would they (and Ford and Chrysler) like to make less big trucks in the short term? Throttle down production tomorrow? Sure, I bet they would. But if they shut down big truck plants tomorrow you know what will happen? They'll lose MORE money because then they'll be paying thousands of people to not work.
You can't simply say "let's not make these big trucks now." There's way more to it than that.
Toyota has already said they'll need to start exporting Siennas, Tundras and Sequoias to the Middle East from their U.S. factories to find them homes.
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From: Wichita, KS
https://www.camaroz28.com/forums/sho...85&postcount=4
When it comes to cars, a lot of people buy on emotion and the dis-information given to them by the sales people.