Ford Production

[Frankenkubota]

Just In Time manufacturing is in place for several reasons.

Inventory tax is one of them. You don't want to get caught holding personal property (inventory) at tax time. So you don't keep anything in stock until you absolutely need it.

That applies to both the maker of a product and the makers and suppliers of the parts and materials for those products.

So they aren't going to keep a bunch of finished products in stock. They aren't going to keep a bunch of parts to assemble those products in stock. And their suppliers of the materials to make the product aren't going to make the materials far in advance.

All of those factors result in a very thin supply line, from raw materials to finished products, that is easily disrupted and hard to restore back to full capacity.

Here's a list of states that still have full or partial inventory taxes as of July, 2020.

View attachment 698183

We used to play so many stupid games trying to hide inventory.....or avoid the penalties. I remember getting overtime pay once for staying to load a truck. Once it was on the truck it was no longer our inventory. Sometimes a signed document changed the status of the inventory from ours to theirs. Bonded on site 3rd party stocking....lots of games.

I remember knowingly shipping scrap to Chrysler just so we could say we met contractual shipping requirements.

 

[MoKelly]

It is what it is ...is a legal term. When you hear that, you just got screwed.

I guess, as someone famous once uttered, “it depends on what the meaning of is is”.

MoKelly

 

[Frankenkubota]

This Chip shortage still doesn't make sense. The power issue in Feb didn't halt TI here in NTX and I really don't believe the Austin interruption was but a few days and it takes no time to get everything back to full production. There is something else going on here. I suspect maybe a labor issue elsewhere due to the unemployment payouts with the covid addition is just keeping more people from going back to work and not necessarily in the chip making sector.

I don't understand how labor costs have so much impact on semi conductor prices.

I was in the semi business but in a very very odd corner of that world. The companies I represented did only 1 off, application specific, defense related god awful expensive stuff. The cost there is mostly high level engineering and development and of course, stroking the govt. They also used a very expensive semiconductor material, not silicone.

I guess the semis used in consumer goods are pretty basic and well established both in terms of performance and process?

I've been in a number of big fabs. It was almost all automated. Where's the labor costs?

 

[Bearsixty7]

I don't understand how labor costs have so much impact on semi conductor prices.

I was in the semi business but in a very very odd corner of that world. The companies I represented did only 1 off, application specific, defense related god awful expensive stuff. The cost there is mostly high level engineering and development and of course, stroking the govt. They also used a very expensive semiconductor material, not silicone.

I guess the semis used in consumer goods are pretty basic and well established both in terms of performance and process?

I've been in a number of big fabs. It was almost all automated. Where's the labor costs?

It's not the semiconductor fab labor is what I'm saying, it's possibly labor issues elsewhere. I know the trucking industry is hurting for drivers, raw material company's may have labor issues, not sure. All I know is it isn't the south Texas semiconductor manufacturers momentary production interruption due to the weather months ago.

Now since most automakers use chips from overseas, it may be they are having issues getting them off the ships. One example someone stated was if a US port is full when a cargo ship arrives, it may bypass it and go on to another country and offload it's shipments there, then return back to try and unload in the US on the return route which could be days or even weeks.

I still think this is someone's chess move to increase prices.

 

[MoKelly]

Ford stock price increased about 3% today in a down market as they announced they would reveal an electric F-150 on Wednesday.

Electric vehicles equals greater shareholder value, even before the vehicle is even unveiled!

MoKelly

 

[Jstpssng]

Ford stock price increased about 3% today in a down market as they announced they would reveal an electric F-150 on Wednesday.

Electric vehicles equals greater shareholder value, even before the vehicle is even unveiled!

MoKelly

That's the new thing, whether we agree with it or not. Too many companies have failed after a century or more because they stuck with their old business plans and couldn't change. Sears, Roebuck and Co is just example.

 

[Hay Dude]

That's the new thing, whether we agree with it or not. Too many companies have failed after a century or more because they stuck with their old business plans and couldn't change. Sears, Roebuck and Co is just example.

You know what’s interesting about Sears? They were actually one of the first big retailers with on line shopping and ordering. I think they had a on line system, but it was a too far ahead of its time and it didn’t take off.

 

[MoKelly]

You know what’s interesting about Sears? They were actually one of the first big retailers with on line shopping and ordering. I think they had a on line system, but it was a too far ahead of its time and it didn’t take off.

Absolutely correct.

In business you need both a good idea and good management to be successful. One of two doesn’t cut it.

MoKelly

 

[Ford850]

Too far ahead of cutting edge is bleeding edge. Dangerously risky. Ford, and others, have been teasing with their electric truck promos. By the time they are produced there will be a much bigger market for them with many buyers who were once dead set against electric. Once people see the power and torque capabilities, like Ford's F150 pulling that train in near silence, they start thinking electric might not be so bad.
And at the same time, the truck companies are building gas and diesel engines that are bigger than ever. They are covering every inch of market share capabilities.

 

[Hay Dude]

Too far ahead of cutting edge is bleeding edge. Dangerously risky. Ford, and others, have been teasing with their electric truck promos. By the time they are produced there will be a much bigger market for them with many buyers who were once dead set against electric. Once people see the power and torque capabilities, like Ford's F150 pulling that train in near silence, they start thinking electric might not be so bad.
And at the same time, the truck companies are building gas and diesel engines that are bigger than ever. They are covering every inch of market share capabilities.

Very true about the capability of electric, but they won’t tell you much about the downside of EVs that needs to be addressed. I am a perfect candidate for a HD electric truck (I need huge towing capacity, but run mostly short trips).
I wouldn’t expect gas and Diesel engine manufacturers to sit around and watch their products legacy go into the dust bin of history without a fight, either.
They will be upping their game tremendously before the war between IC and EV is settled.
I just wish they wouldn’t force it on us. Let capitalism decide the winner, not subsidies.