The "Way Forward"

Trimming the fat only goes so far. Cost reduction is an effective short-term solution. A long-term strategy based upon market trends and technological capabilities will be a more important focus.

Look at why they are closing plants? Consumers don't want their products. Why? Imports are doing it better (apparently) and cheaper (often in multiple aspects).

The Big3 have their work cut out for them in times to come. They need to move ahead of resting in domestic complacency and forge concrete, progressive strategies that secure the interest, hopes, and dreams of every targeted market segment.

They also need to break the unions.

duner said:

They also need to break the unions.

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A 70+ year battle that will likely continue for another 70 years.

4u2nv said:

A 70+ year battle that will likely continue for another 70 years.

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For sure.

i've been reading alot of history dealing with unions back in the railroad building days....and they really helped workers get fair wages and benefits and stopped businesses from taking advantage of them....

i work for Ford the F-150 plant, and I am proud of our Union, at our plant there is a very nice balance between management and laborers....

Check this out my Blue Blooded Homies, this is cool! http://www.foxnews.com/story/0,2933,182984,00.html

I think the root of the problems is labor, for that I blame the unions.

Cars are overpriced. For most Americans that is the most expensive investment they make except for a home. Look at the hit we take as soon as it leaves the dealers lot.

Last Aug I bought my 04 F150 XLT with 7300 miles on it for 16K. Thats a truck that 9 months earlier had a window sticker of 27K.

The Big 3 have to lower overhead, that includes labor.

That means the Unions have to go.

Giving up Market Share is a losing proposition!!

Twofocused said:

I think the root of the problems is labor, for that I blame the unions.

Cars are overpriced. For most Americans that is the most expensive investment they make except for a home. Look at the hit we take as soon as it leaves the dealers lot.

Last Aug I bought my 04 F150 XLT with 7300 miles on it for 16K. Thats a truck that 9 months earlier had a window sticker of 27K.

The Big 3 have to lower overhead, that includes labor.

That means the Unions have to go.

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It goes way beyond that ....

Ford has Pension Liabilities (both Union and Non Union) and an Older Plant Infrastructure that the Japanese plants dont have (yet)

Add to that the need to satisfiy their US Stock holders (Dividends) and a Board of Directors, a demanding Dealer Network and things are cumbersome at best ...

I personally feel that this so-called Way Forward is a step backward. Closing plants and giving up market share is not the answer and you are going to see some implosion among Ford Dealerships this fall because of that ...

They should bite the bullet, lower prices, cut the dividend and retool with the workers on furlough (instead of laid-off). In the meantime renegotiate with the UAW.

Come back with guns blazing with new products and hopefully a lower cost structure.

I read somewhere that it takes $2,000 from every vehicle Ford sells to cover pensions.
That's a cost foreign (now domestic for practical purposes) don't have.

stanmckinney said:

I read somewhere that it takes $2,000 from every vehicle Ford sells to cover pensions.
That's a cost foreign (now domestic for practical purposes) don't have.

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a minor consolation is that GM's cost are higher than that!

As someone who has owned 26 Fords, I hate to say it but Ford is in a death spiral that Ford will never recover from.

Ford knew 5 years ago it was in deep ***** and for the last 5 years has been totally unable to fix one thing. So who in their right mind would think that Ford can fix anything over the next 5 years. Espcially since Ford has 9% smaller market share, has already shrunk from selling 4M vehicles / year in the US to 3.1M vehicles and competition is tougher than ever with the Koreans now a significant force in the US market and the Chinese coming soon.

The only reasonably successful car that Ford N America has designed in the last 5 years is the 05 Mustang. The few smart things that Ford did was to buy Volvo and buy as much of Mazda that they could. 40% of Fords new N American cars are going to be based off the Volvo S80 platform. And 50% of Ford's cars will be based off the Mazda platform. Without Volvo and Mazda all Ford would be able to do is retread the obsolete Taurus platform one more time.

If you look at Ford's history, it was in deep trouble after WWII. The 49 Ford bailed it out. In the 60s Ford was again in trouble. Ford's "Total Performance" campaging, the Mustang and the 65 LTD saved Ford's ass that time.
In the late 70s Ford's tit was again in a ringer, the Fox cars and Panther saved the day. But that lasted only a few years when in the Mid 80s Ford was again in trouble and the Taurus saved the company. In the 90s Ford rode the SUV craze to record profits and was poised to overtake GM, when everything came crashing down due to some very bad product / marketing decisions and Ford's legacy costs.

I'll say that the ONLY cars (cars not trucks / SUVs) that Ford has made a profit on over the last 20 years has been the Taurus, Mustang and Panther cars. Today only the Mustang has been updated and made competitive. The Taurus is on death watch and the Panther lingers on with minimal investment selling half the # of Panthers in 2005 than were sold only 5 years ago.

So as large SUV sales tank and the Japanese make a full frontal assult on the F-150, is there a new vehicle that can once again hold the Grim Reaper at bay?

I think one aspect of this is that Ford is experiencing the same thing as many other industries in the US - the basic cost/standard of living here means that, even without the unions, labor (skilled and unskilled) costs here just can't compete with developing countries. Even if every Ford employee agreed to work for minimum wage, they'd still pay more in healthcare contributions per month than a foreign worker earns (ok, not Japanese).

Add this to the observations above, and you've got tough times ahead for Ford. Ford should have seen this coming, like they should've dealt with the Japanese when they had the chance. I get the feeling that instead of doing so, however, they arrogantly assumed that they were "American" and impervious to the threat posed by these upstart newcomers.

I think the US oil industry took advantage of Katrina and dealt a blow to the US auto industry. When gas was up to $3.50 a gallon for no reason, the big three lost sales while the asian cars maintained through a lot of stereo typed hype enforced over the years about how broke you will be if you drive American. Most of us enthuisiusts went ahead and bought our 05 and 06 V* powered muscle cars because we know the real deal, but the common Joe is brainwashed into thinking the only way he can eat and drive at the same time is to buy an import.

What about quality ? It's not there anymore . Nobody wants a car thats always in the shop . Just my 2 cents

bat24 said:

What about quality ? It's not there anymore . Nobody wants a car thats always in the shop . Just my 2 cents

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Quality? ok,

While I have some minor complaints about a few of the design features of my 2005 Mustang,
it has never been anything but perfect in preformance and reliablity ....
(12K + miles so far / knock wood)

My `97 F150 Lariat currently sits at 150K miles, with no major problems (NONE!)

So in my experience, Ford has given excellent quality ...

YMMV ~

bat24 said:

What about quality ? It's not there anymore . Nobody wants a car thats always in the shop . Just my 2 cents

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While quality is not always the best. If you look at JD Powers. Buick has a higher quality rating than toyota and Honda. Is that helping them save GM? You have to have a product people want to buy. Personally I think all the incentives aren't helping. When you discount everything by thousands of dollars. What that tells me is. You have been over charging in the past. And that is not the only problem. Medical costs are starting to hurt every industry. If they don't start controlling the rate of increase. No one is going to be able to afford any car. Or companies will be paying enough to go bankrupt and it won't matter because peole will be unemployed. And yes some unions don't help. But breaking the unions isn't necessarily the right answer. At least not yet. Unions didn't come about for no reason. And until all the reasons are eliminated unions will continue.

http://www.jdpower.com/news/releases/pressrelease.asp?ID=2005069