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Ford stresses that they’re really going to make their goal
Just yesterday I talked about how analysts did not believe Ford was going to make their 2008 goal of being a profitable company. Well, I think analysts still believe Ford will not make it, but Mark Fields, Ford’s president of Americas, believes they’re right on track.
He admits that they’re behind in some areas, but in other areas, he claims, Ford is way ahead of the game. So, that, in his mind, puts Ford in an “ok” position.
Like I said before, analysts still don’t believe Ford will make that goal. They say this because a weak inventory of new vehicles and a weary product strategy.
Ford has a lot of work to do. They’re supposed to be “innovation” driven, but it seems they’re still relying on large SUVs and trucks to keep them afloat. The buoyancy of their business is dependant upon a style of car that is becoming too expensive to drive and frowned on because of environmental issues.
Maybe Ford will stop trying to be “innovative” in their eyes and really become innovative. They’ve become innovative to their own definition, but I think their definition could be a tad off.
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The auto industry struggles some more
Back when Ford Motor Co. stated that they would cut 30 thousand jobs, William Clay Ford Jr., chief CEO and great 
grandson to Bill Ford, announced that, in 2008, Ford would be back on their feet (maybe you can guess where I’m going with this article).
It seems, however, that Mr. Ford Jr. might be eating his own words about having the company back on track by 2008. The reason, or at least part of it, is the declining sales of SUVS. The explorer SUV dove 27 percent, and the expedition fell 30 percent, while gas prices rose 34 percent. Not many people are buying SUVs because of economical concerns and high gas prices. And, since Ford’s flagship car was the explorer, there are major problems.
Restructuring a company is a difficult task; however, it seems that the company is doing a good job at cutting jobs. While Ford announced they would cut 30,000 jobs in x amount of years, they’re actually ahead with that statistic.
Ford’s rival, GM, is looking better. GM’s restructuring plan is actually showing progress; because, their money-making-cars were not SUVs. Toyota, on the other hand, is thriving. Toyota can’t stop 10 min from building new factories and producing cars in the US.
The future of Ford is based on the dependence that Ford will “innovate” with cars that actually make money and people want. Times have changed, hence, companies, including Ford need to change. The auto industry is going through major changes, I sure hope the company Ford is build Ford Tough
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Used SUV prices are plummiting
Anyone with any sense knows that the automotive industry is not in the best of shape right now. And everyday it seems as things are getting worse. Yesterday was actually the first good news about the auto industry in a while. However, today we’re back to the problem with American auto makers.
Most of Ford and GM’s revenues come from large SUV sales, and with high gas prices, less and less people are buying used SUVs. This, in the long run will be detrimental to ford and GM, since they have such a high volume of large SUVs. The price for large SUVs has been declining extremely fast over the past few months because of high volume and high gas prices.
Ford Sales analyst said that he expects to see a double-digit percentage decline in 2006 for large SUV sales. So, what does this mean for the consumer? Well, it means if you’ve ever wanted a large SUV now is probably the time to buy one, or you can wait a few more months to see what will happens with the prices. However, I think by consumers not buying large SUVs we’re showing auto makers we want more fuel efficient cars.
Honestly, Ford and GM should’ve seen this coming 10 years ago. It seems that foreign automakers saw it, so why were American automakers oblivious to this trend? Well, I’m not too sure, but I hope that they get the picture soon.
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Ford to offer more all-wheel drive vehicles.
The Ford Motor Company lost $1.2 billion in the first quarter of this year but they don’t plan on staying down for long. They have big plans to make a splash in the AWD market. Right now Subaru is king of the hill when it comes to all-wheel-drive cars but Ford could challenge them for dominance.
Ford’s goal is to sell half a million by next year. This would definitely make them a major player in this area because the total sold for this year was only 1.5 million. Ford’s aim will be to capture the middle market. BMW and Audi, among others, offer AWD luxury models while Subaru has catered to the other end of the market.
The plan will bring all-wheel-drive to the company’s Ford Fusion, Mercury Milan and Lincoln MKZ mid-sized sedans in August and to the new Ford Edge and Lincoln MKX crossovers this fall. Ford already offers it as an option in other vehicles, such as the Freestyle crossover and the Five Hundred full-sized sedan.
Many drivers value AWD vehicles for their stability in harsh conditions and off-road terrain. Currently, most AWD vehicles are trucks or SUVs. Ford is hoping to attract these SUV buyers as some are turning to crossover SUVs based on car designs.
Ford is not the only automaker getting into this field. GM and Chrysler will offer new AWD options soon, although on a smaller scale than Ford. You might expect Subaru to feel some pressure now, but they seem to welcome the help to convert the masses to all-wheel-drive passenger cars.
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Criticism from some Ford shareholders.
This country’s second leading auto maker has had a tough time over the last few years. Ford lost over $2.5 billion in the first quarter of this year. As with most companies, when things are going wrong you look to the person at the top. In this case it is Bill Ford.
He may have seen this coming or he might just be a generous guy because last year he pledged not to earn a salary or accept a bonus until Ford was profitable again. However, that move did not silence the critics for long.
"Mr. Ford is a failure. He has put shareholders and the company at bankruptcy’s door," said Sam Joanette, a Ford retiree and shareholder from Miami Beach, Fla., who said he has lost more than $1 million since investing most of his retirement money in Ford in 1999.
"Mr. Ford knows he is not qualified, that he is in over his head."
There are plenty of critics, but he has supporters as well. There are many shareholders standing behind him.
"He’s been a chairman who’s very responsive to small shareholders," Davis said.
Ford hopes that the restructuring plan and a move away from a more bureaucratic setting will help the company get back on the profitable side. I’m sure he loves this company and has many reasons why he wants it to become profitable again, but I’m sure the resumption of his salary has to be one of those reasons.
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Ford endured a first quarter loss and more may be coming.
Just yesterday gas was going for $2.85 a gallon in the city where I live. And I’m not talking about the premium stuff. We all know that it will continue to climb as summer approaches. Right now there is talk of $4.00 a gallon in the near future!
This is definitely not good for our wallets. It is also not good news for Ford. The automaker just posted a $1.19 billion first quarter loss. The company has a lot of problems right now, but the one that directly correlates with the high gas prices is the fact that they have been heavily dependent on their SUVs for years. Ford’s SUVs, along with its F-series trucks, have been bailing out the companies weak car sales for years now.
Ford’s CEO, Bill Ford Jr. seems to be ready to turn the company around inspite of gas prices:
"Three months in, we are in the very early stages of this strategy to transform the way we do business, down to its very core," said chairman and CEO Bill Ford Jr.
However, as gas goes higher they may see declining SUV sales as motorists turn to smaller vehicles with better fuel economies. Their F-series trucks will also have to face some new competition as GM and Toyota take aim at them with their new truck offerings.
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Recent news about auto parts suppliers.
Here in America, our cars and trucks are a very important part of our everyday lives. Most of us could not function without them. Many of you know that if one little part goes wrong, it could put the whole vehicle out of commission. And there are a lot of parts.
The auto makers, such as Ford, GM, Toyota, etc., who make our cars, do so with parts they receive from their suppliers. And many of these suppliers are experiencing tough times right now. Some, including Delphi Corp., have had to file for bankruptcy. This definitely can put a kink in the auto makers plans. However, the auto makers themselves might be partly to blame.
One of the reasons many auto parts suppliers are facing difficulties is because auto makers have been demanding lower prices. This would hurt by itself, but the suppliers have had to face rising costs for the materials used to make their parts.
How has this affected the auto makers? Two, specifically, have made news in this department of late.
Toyota has been working hard to secure its relationship to its suppliers by working more closely with them. They hope this will help bring costs down for the parts makers and keep their supply chain moving properly.
Meanwhile, Ford has made news advocating some bankruptcy reform for the parts suppliers. Naturally they would be worried because when their suppliers file for bankruptcy the supply chain is rudely interrupted.
This just goes to show that when one part fails the whole chain is in trouble.
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The popularity of sub-compact cars is on the rise.
Until recently, sub-compact cars have not fared very well in America. The SUV has been king for some time now but its position of dominance might not be as secure as it used to be. This does not mean that small cars will come to dominate American highways the way they have in Europe, but they are getting a lot more respect these days.
It’s not hard to figure out the reason behind the rise in popularity of the smaller cars. It’s the rise in gas prices. It’s not uncommon for motorists to turn to smaller cars when gas prices increase because smaller cars tend to get better gas milage. Car manufacturers are wise to provide affordable cars at the smaller size not only for this reason but it is a great way to get young, first time car owners. This can help build up your brand, especially if these young buyers are loyal later in life.
Many foreign car manufacturers started out primarily making sub-compacts and still excel at doing it today. However, the North American “Big Three” (GM, Ford, Daimler Chrysler) have a lot to learn. Peter Johnson pointed out some shortcomings in a recent article.
Toyota has introduced the Yaris, Hyundai has significantly revised the Accent, Kia has updated the Rio, Honda has just introduced the Fit, and Nissan will introduce the Versa in May of this year. And let’s not forget Scion with the xA and xB.
The Chevrolet Aveo is essentially a re-badged Daewoo and doesn’t offer the level of refinement as the others. The Ford Focus is larger and more expensive, as is the new for ’06 Dodge Caliber.
Many of our North American manufacturers have been in decline recently. Maybe a new fleet of small fuel-efficient cars could be a step in the right direction for these companies. I want to see them succeed, but if they don’t provide consumers with what they need, the consumers will go elsewhere.
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Zero-Percent Financing on Certain Hybrid SUVs
Ford is now offering zero-percent financing on new Hybrid SUVs. They’re expanding the zero-percent financing options to increase sales of the Escape and Mariner models. The zero-percent incentives have been successful in California and Washington D.C. and now the incentives are available nation wide.
The incentive on the gasoline-electric SUVs was offered last month in California and Washington, D.C., but was expanded effective Monday and runs through July 5, Ford spokesman Monte Doran said.
"We’re really committed to making hybrids mainstream and also keeping hybrids affordable," Doran said.
In March, Ford sold 1,441 Escape hybrids, up nearly 17 percent from February and down about 8 percent from March 2005, Doran said, while 149 Mariner hybrids, which went on sale in October, were sold in March, up 38 percent from February.
Ford is trying to make hybrid models available and affordable to all, which is something that more car companies need to do. Ford is demonstrating their commitment to the environment and innovation by allowing the commoner to actually consider buying a hybrid.
This news makes me actually want to consider the hybrid Escape. I’ve always been a fan of the Escape, but now, since the hybrid’s financing options are so good, I’ll probably look at the hybrid models.
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Bill Ford Talks about the future of Ford.
Bill Ford, Chairman and CEO of Ford Motor Co., gave strong words to reporters, saying that, Ford would not even consider a Chapter 11 bankruptcy restructuring. Ford made this statement just before he was going to be awarded the 2006 Automotive Industry Executive of the Year.
"We don’t see it at all," Bill Ford said of a possible Chapter 11 filing. Ford Motor has ample liquidity, he said, stressing that the company was profitable in 2005.
He acknowledged that the U.S. auto industry is in a "precarious" state.
Ford Motor’s biggest problem is the bleeding North American auto business, which lost $1.6 billion before taxes and charges in 2005. Turning around that unit, the objective of the company’s Jan. 23 Way Forward restructuring announcement, requires tough decisions and nimble thinking, he said.
Ford Motor Co. plans to close 14 plants through 2012 and cut 30,000 jobs in the hopes of saving the company.
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