How Ford's dealing... without government help.
#16
Guy -- I read that article and it describes EXACTLY what GM's been doing albeit with GMAC......(which is a huge problem...)
We have not killed any product plans other than next gen SUVs.........a couple of programs have delays of 3 to 9 months....that's about it.
We just haven't trumpeted what our product plans are at this point.
You talk about killing off Divisions -- do you have any idea of the costs involved? (we're talking Billions and Billions in liabilities...)
We have not killed any product plans other than next gen SUVs.........a couple of programs have delays of 3 to 9 months....that's about it.
We just haven't trumpeted what our product plans are at this point.
You talk about killing off Divisions -- do you have any idea of the costs involved? (we're talking Billions and Billions in liabilities...)
It almost seems as if the choice is to lose billions and billions now and save them in the future, or spend billions and billions now and continue loosing billions and billions in the future.
In that light the choice is pretty clear, isn't it?
#17
You do realize that what you are saying is that while GM is bleeding billions and billions of dollars, GM shouldn't shed divisions that are (from what I understand) huge drags on GM's profitability because it will cost billions and billions?
It almost seems as if the choice is to lose billions and billions now and save them in the future, or spend billions and billions now and continue loosing billions and billions in the future.
In that light the choice is pretty clear, isn't it?
It almost seems as if the choice is to lose billions and billions now and save them in the future, or spend billions and billions now and continue loosing billions and billions in the future.
In that light the choice is pretty clear, isn't it?
How much of a drag is Pontiac, Saturn, etc., on GM's profitability?
It's not clear to me at all that the choice is as you put it, Guy. I'm all for cutting everything but Chevy and Caddy, if it makes sense. I don't think we have the data to say, one way or the other. The decision would come down to how much money would it save (I haven't even seen a convincing estimate there), and how much would it cost (how much did it cost to close Olds -- several billion $$?).
I do think that if the federal government is going to lend billions to GM to keep them from having to declare bankruptcy, taxpayers do deserve to have some details on how they'd be spent, and I would hope that Congress would ask some of these questions. We do deserve enough information to make an informed judgment as to the likelihood of getting the money back. But we're just speculating at the moment.
On the other hand, the way the financial institution rescue money is being spent doesn't really satisfy the above paragraph, in my opinion.
#18
Kuzak told The News that he saw little point in preserving cash at the expense of Ford's lineup.
"Outstanding products are the heart of any turnaround of our business and its future success," he said. "The whole intent from the beginning was to protect the product plan and the capital spending and engineering that goes with it and look for every other element of cash that isn't directly tied to the products."
"Outstanding products are the heart of any turnaround of our business and its future success," he said. "The whole intent from the beginning was to protect the product plan and the capital spending and engineering that goes with it and look for every other element of cash that isn't directly tied to the products."
Ford might have more cash than GM, but the future is still bleak unless significant products are released within the next 12 months or so. God knows the current lineup isn't sustainable for Ford's long term survival.
#19
You do realize that what you are saying is that while GM is bleeding billions and billions of dollars, GM shouldn't shed divisions that are (from what I understand) huge drags on GM's profitability because it will cost billions and billions?
It almost seems as if the choice is to lose billions and billions now and save them in the future, or spend billions and billions now and continue loosing billions and billions in the future.
In that light the choice is pretty clear, isn't it?
It almost seems as if the choice is to lose billions and billions now and save them in the future, or spend billions and billions now and continue loosing billions and billions in the future.
In that light the choice is pretty clear, isn't it?
you mention 2 options...
- lose billions and billions now and save them in the future - shed divisions
- spend billions and billions now and continue loosing billions and billions in the future - not doing anything to change
but you forgot that there could be a 3rd option...
- invest billions and billions now and turn the divisions profitable - make the right choices so you have the cars that the people want and need
#20
But you could run with that and study Saturn- Even with their all new products they are still a flop. and Buick with their 3 models which are new, but all re-badged or shared models with other GM's.
#21
Where are they going to get the billions and billions to spend now?
How much of a drag is Pontiac, Saturn, etc., on GM's profitability?
It's not clear to me at all that the choice is as you put it, Guy. I'm all for cutting everything but Chevy and Caddy, if it makes sense. I don't think we have the data to say, one way or the other. The decision would come down to how much money would it save (I haven't even seen a convincing estimate there), and how much would it cost (how much did it cost to close Olds -- several billion $$?).
I do think that if the federal government is going to lend billions to GM to keep them from having to declare bankruptcy, taxpayers do deserve to have some details on how they'd be spent, and I would hope that Congress would ask some of these questions. We do deserve enough information to make an informed judgment as to the likelihood of getting the money back. But we're just speculating at the moment.
On the other hand, the way the financial institution rescue money is being spent doesn't really satisfy the above paragraph, in my opinion.
How much of a drag is Pontiac, Saturn, etc., on GM's profitability?
It's not clear to me at all that the choice is as you put it, Guy. I'm all for cutting everything but Chevy and Caddy, if it makes sense. I don't think we have the data to say, one way or the other. The decision would come down to how much money would it save (I haven't even seen a convincing estimate there), and how much would it cost (how much did it cost to close Olds -- several billion $$?).
I do think that if the federal government is going to lend billions to GM to keep them from having to declare bankruptcy, taxpayers do deserve to have some details on how they'd be spent, and I would hope that Congress would ask some of these questions. We do deserve enough information to make an informed judgment as to the likelihood of getting the money back. But we're just speculating at the moment.
On the other hand, the way the financial institution rescue money is being spent doesn't really satisfy the above paragraph, in my opinion.
is not that clear cut...
you mention 2 options...
but you forgot that there could be a 3rd option...
you mention 2 options...
- lose billions and billions now and save them in the future - shed divisions
- spend billions and billions now and continue loosing billions and billions in the future - not doing anything to change
but you forgot that there could be a 3rd option...
- invest billions and billions now and turn the divisions profitable - make the right choices so you have the cars that the people want and need
I know that GM can not today or tomorrow cut Pontiac-Buick-GMC. However, does anyone disagree that GM has seemingly starved the group and made questionable decisions with it? How did the G3 (Aveo) even make it into the equasion? How can a few large rustbelt Buick dealers wreck a good GM plan to make the division relevent to the other 2/3s of the country?
My view is that GM either needs to invest in making Buick the American road car division promised and Pontiac the performance division promised, or kill them off and redistribute the cream of the lineup to other divisions.
#22
It's pretty much the point I've been making all along... the cash reserves have little to do with Ford's ultimate survival. Ford need a product led revival in as much as they need to reign in their costs.
Ford might have more cash than GM, but the future is still bleak unless significant products are released within the next 12 months or so. God knows the current lineup isn't sustainable for Ford's long term survival.
Ford might have more cash than GM, but the future is still bleak unless significant products are released within the next 12 months or so. God knows the current lineup isn't sustainable for Ford's long term survival.
You all talk like the F150 is the last product that Ford is releasing.
January 2009: New Fusion, Milan, MKZ, and Hybrid models
March 2009: New Mustang
June 2009: New Taurus
July 2009: V6 Ecoboost engines (MKS, Taurus, Flex, etc)
Sometime 2009: Transit Connect
Late 2009: New Edge, MKX
January 2010: New Fiesta
June 2010: New Global Focus
Somewhere in there, there is also the possibility of the Ka. The Global Ranger is supposed to be somewhere in there also.
Ford is working to move up many of the timelines also.
Do understand that much of this involves retooling factories. The tooling has been bought for much, which has been a large cash drain. However, if the gov ever figures out how to distribute the loan program that they already approved, Ford will get money out of it. 4 truck plants are being converted to cars, or car based vehicles.
I know that there are things that I missed in there.............. like the Mercury cars.............. but I am not sure of the timeline for those.
This is Fords plan, and they are sticking to it. When they are done, they will have a full range of cars, from tiny to large.............. crossovers, from tiny to large............. and trucks, from small to large.
Thus, they will be ignoring no segments, and will have fully up-to-date, and highly competitive products in all segments.
#23
Do some of you have any idea what Ford is releasing in the next 2 years???
You all talk like the F150 is the last product that Ford is releasing.
January 2009: New Fusion, Milan, MKZ, and Hybrid models
March 2009: New Mustang
June 2009: New Taurus
July 2009: V6 Ecoboost engines (MKS, Taurus, Flex, etc)
Sometime 2009: Transit Connect
Late 2009: New Edge, MKX
January 2010: New Fiesta
June 2010: New Global Focus
Somewhere in there, there is also the possibility of the Ka. The Global Ranger is supposed to be somewhere in there also.
Ford is working to move up many of the timelines also.
Do understand that much of this involves retooling factories. The tooling has been bought for much, which has been a large cash drain. However, if the gov ever figures out how to distribute the loan program that they already approved, Ford will get money out of it. 4 truck plants are being converted to cars, or car based vehicles.
I know that there are things that I missed in there.............. like the Mercury cars.............. but I am not sure of the timeline for those.
This is Fords plan, and they are sticking to it. When they are done, they will have a full range of cars, from tiny to large.............. crossovers, from tiny to large............. and trucks, from small to large.
Thus, they will be ignoring no segments, and will have fully up-to-date, and highly competitive products in all segments.
You all talk like the F150 is the last product that Ford is releasing.
January 2009: New Fusion, Milan, MKZ, and Hybrid models
March 2009: New Mustang
June 2009: New Taurus
July 2009: V6 Ecoboost engines (MKS, Taurus, Flex, etc)
Sometime 2009: Transit Connect
Late 2009: New Edge, MKX
January 2010: New Fiesta
June 2010: New Global Focus
Somewhere in there, there is also the possibility of the Ka. The Global Ranger is supposed to be somewhere in there also.
Ford is working to move up many of the timelines also.
Do understand that much of this involves retooling factories. The tooling has been bought for much, which has been a large cash drain. However, if the gov ever figures out how to distribute the loan program that they already approved, Ford will get money out of it. 4 truck plants are being converted to cars, or car based vehicles.
I know that there are things that I missed in there.............. like the Mercury cars.............. but I am not sure of the timeline for those.
This is Fords plan, and they are sticking to it. When they are done, they will have a full range of cars, from tiny to large.............. crossovers, from tiny to large............. and trucks, from small to large.
Thus, they will be ignoring no segments, and will have fully up-to-date, and highly competitive products in all segments.
I'm not disagreeing with your basic premise here...just want to point out that the difference in capital (and expense) investment between a major redesign and a minor redesign is significant which may play a part in how Ford can "afford" the "new" vehicles.
#24
Many of them are major refreshes.
Ford really isn't doing the "new headlights and grille" refreshes anymore.
The platforms are updated, interiors are reworked, everything except the roof........... or roof and doors are changed............... engines are changed, and transmissions are changed/updated.
The Hermosillo triplets are major refreshes, as is the Mustang. The Taurus is pretty much all new, as there will be no remaining sheetmetal, and the platform is getting an update to the MKS version (much stronger, to allow Ecoboost V6). Edge/MKX are major refreshes. Transit Connect, Fiesta, Focus, Ka, Global Ranger, other Euros coming .............. are all completely new, or new to assembly and sale in the US. In 2011 you will get the Global Escape/Kuga, Fusion/Mondeo, etc.
In all, Ford is completely retooling 4 or 5 plants.............. one of which is in Mexico (for the Fiesta).
Expedition/Navigator is moving to KTP with the Superduty, as we speak, and retooling of the Cautitilian (sp??) plant (Mexico) is beginning.
This is a major upheavel of Fords US operations. The idea is to make them better able to respond............ quickly............ to any changes in the marketplace. They will also be doing major refreshes every 3 years, with complete redesigns every 5-6. There will also be yearly updates. They understand that the competition here is fierce, and they have to be able to show a "new" (doesn't have to be complete redesign, just look it) face on their products frequently.
Oh, I know what I forgot............... the D3 Explorer is due in fall of 2009.
Ford really isn't doing the "new headlights and grille" refreshes anymore.
The platforms are updated, interiors are reworked, everything except the roof........... or roof and doors are changed............... engines are changed, and transmissions are changed/updated.
The Hermosillo triplets are major refreshes, as is the Mustang. The Taurus is pretty much all new, as there will be no remaining sheetmetal, and the platform is getting an update to the MKS version (much stronger, to allow Ecoboost V6). Edge/MKX are major refreshes. Transit Connect, Fiesta, Focus, Ka, Global Ranger, other Euros coming .............. are all completely new, or new to assembly and sale in the US. In 2011 you will get the Global Escape/Kuga, Fusion/Mondeo, etc.
In all, Ford is completely retooling 4 or 5 plants.............. one of which is in Mexico (for the Fiesta).
Expedition/Navigator is moving to KTP with the Superduty, as we speak, and retooling of the Cautitilian (sp??) plant (Mexico) is beginning.
This is a major upheavel of Fords US operations. The idea is to make them better able to respond............ quickly............ to any changes in the marketplace. They will also be doing major refreshes every 3 years, with complete redesigns every 5-6. There will also be yearly updates. They understand that the competition here is fierce, and they have to be able to show a "new" (doesn't have to be complete redesign, just look it) face on their products frequently.
Oh, I know what I forgot............... the D3 Explorer is due in fall of 2009.
#25
Ford is also due to make a decision on the Crown Victoria and Ford Falcon replacements pretty soon.
That pretty much covers the entire Ford lineup, so I would hardly say Ford doesn't have anything new coming on the product side.
That pretty much covers the entire Ford lineup, so I would hardly say Ford doesn't have anything new coming on the product side.
#26
Two points I wanted to touch on:
Global product development chief Derrick Kuzak -- backed by Mulally -- countered: If Ford has a future, it depends on delivering a new generation of class-leading cars and trucks that people actually want to buy.
This would imply there were people in the room that were disagreeing with this idea. For the sake of everything in Detroit, I hope there is no auto executive for any of the big three that thinks NOT making class-leading cars and trucks is a found financial model.
Second, Doug makes a very valid point here. While Ford is being aggressive in their road map, it's because they have to be. Most of the products listed on Ford's release map outlined below need to come out ASAP because the current generations are not only behind Japan, Inc, but also GM.
The place where Ford can get ahead is with the small cars, but those are not to be released for the next twelve months, and we saw this year that anything beyond about the next three months would be considered a long-term plan.
It'll be interesting to see how the next 2, 3, 6 months hash out. We'll find out if GM's problems is their cars or their management, as well as Ford.
Global product development chief Derrick Kuzak -- backed by Mulally -- countered: If Ford has a future, it depends on delivering a new generation of class-leading cars and trucks that people actually want to buy.
This would imply there were people in the room that were disagreeing with this idea. For the sake of everything in Detroit, I hope there is no auto executive for any of the big three that thinks NOT making class-leading cars and trucks is a found financial model.
Second, Doug makes a very valid point here. While Ford is being aggressive in their road map, it's because they have to be. Most of the products listed on Ford's release map outlined below need to come out ASAP because the current generations are not only behind Japan, Inc, but also GM.
The place where Ford can get ahead is with the small cars, but those are not to be released for the next twelve months, and we saw this year that anything beyond about the next three months would be considered a long-term plan.
It'll be interesting to see how the next 2, 3, 6 months hash out. We'll find out if GM's problems is their cars or their management, as well as Ford.
#27
Outside of my view that GM can not be allowed to fail, that GM have a damn good plan to turn itself around, and have a detailed investigation that results with heads in baskets, my thinking is pretty fluid on this subject (meaning my thinking isn't in concrete, and I'm open to other thoughts on this).
I know that GM can not today or tomorrow cut Pontiac-Buick-GMC. However, does anyone disagree that GM has seemingly starved the group and made questionable decisions with it? How did the G3 (Aveo) even make it into the equasion? How can a few large rustbelt Buick dealers wreck a good GM plan to make the division relevent to the other 2/3s of the country?
My view is that GM either needs to invest in making Buick the American road car division promised and Pontiac the performance division promised, or kill them off and redistribute the cream of the lineup to other divisions.
My view is that GM either needs to invest in making Buick the American road car division promised and Pontiac the performance division promised, or kill them off and redistribute the cream of the lineup to other divisions.
My amateur analysis of the problem is that GM had run for too long with costs that were so much higher than the transplants. You're right that this was mostly fixed last year (though I think it still leaves GM with a disadvantage relative to Toyota/Honda, but very minor compared to where they were), but the benefits really won't show up until 2010 or so -- once the VEBA payments have been made and the other changes fully take effect.
So I'm not convinced that tweaking divisions and product are as essential as just getting some loans to survive this severe downturn until the mostly competitive labor costs take effect. Even after that, things won't be easy, since in addition to (at least only) slightly higher labor costs, there will be principal and interest payments on the loans.
By the way, I believe that if it were not for the UAW and the domestic three, workers at the transplants would be making far less than they do now. I think that Toyota, Nissan, Honda, et al, pay their employees just enough to keep them from unionizing and that the baseline is the payscales at the domestics. Am I alone in that belief?
#29
It's likely that most of their current cash on hand has come from the sales of Jag and (the other nameplate escapes me at the moment).
#30
....By the way, I believe that if it were not for the UAW and the domestic three, workers at the transplants would be making far less than they do now. I think that Toyota, Nissan, Honda, et al, pay their employees just enough to keep them from unionizing and that the baseline is the payscales at the domestics. Am I alone in that belief?
In some cases, transplant workers have better benefits than union workers even without the UAW.
It's also reasonable to assume that, left to its own, the marketplace will/would correctly determine the "correct" wage for a given job (that is how it works for most jobs after all) so assuming that a union will always get you more money is not necessarily a valid assumption.
The transplants have had plenty of opportunities to vote on unionizing with the UAW...to date, not a single transplant facility (that I'm aware of) has ever voted in the union...in the last vote held at Nissan, the UAW lost by 3 to 1. All that to say, a lot of folks have looked at what the UAW has to offer and apparently decided it didn't offer enough to justify their monthly dues.