Ford Production

[5030]

Having worked for a 3rd tier supplier of automotive components, I know all about the lowest bidder scenario. The automakers are continually pushing for price cuts but I don't ever see price reductions in their finished products.

They want it cheap and they want it NOW and that isn't working out so well for them presently.

JIT has turned into lots full of unfinished vehicles and unhappy customers. You know as well as I do that there will be no price reduction for any of those vehicles that are sitting, baking in the sun and getting older. Probably what will happen is a price increase instead. Blame it on Covid like the government does.

 

[MoKelly]

I always hated that expression "it is what it is".
We put a man on the moon. Deep down, we still are a nation of "do-ers" and although its dwindling, I think we can manage to produce chips here.
Good grief.

^^^^ Absolutely!!! The experts said you couldn’t get a vaccine in under a year. No way. Can’t be done.

Well - it got done.

MoKelly

 

[5030]

Yes, what I said. I was responding to your earlier post about takes years to setup production and that is not correct. Production could begin in a very short amount of time, it's the higher price the US chip makers require that prevents the auto makers from using them.

It don't 'prevent' them from using them. It does however impact their 'for maximum profit' bottom line so, they are 'stacking up new vehicles' and waiting for the off shore chip makers to provide the cheaper imported stuff.

The markup on a new vehicle, especially a new pickup truck is way over the top, why I only buy low mileage off lease vehicles with a clean record. I can get a low mileage vehicle (under 20K miles) for basically 1/2 of sticker.

Bought a Chevrolet Suburban LTZ 4x4 with every factory option off lease last year, Stickered for 75 grand, bought it for 30 from a local dealer. 22K miles and all service records (the dealer took care of it). Never in a wreck, third row seating was never even used. Too much gee-gaw for me but she wanted it. Paid cash too. I hate payments. All I had to do to it was new pads on the brakes and only reason I did that was I wanted to loose the organic pads and replace them with ceramic pads, I don't like black wheel dust on alloy rims. Don't need to be the first owner and take the depreciation hit. I let someone else do that.

My wife's buggy.

 

[Bearsixty7]

JIT has turned into lots full of unfinished vehicles and unhappy customers.

JIT.. My company loved to use that buzz word back in the 90's, JIT manufacturing, It became known as "Just Isn't There"!

You know as well as I do that there will be no price reduction for any of those vehicles that are sitting, baking in the sun and getting older. Probably what will happen is a price increase instead. Blame it on Covid like the government does.

I blame it on the government, shelter in place too long, mask mandates for too long, additional covid benefits on top of normal unemployment that disincentivizes people going back to work.

 

[chevy]

Big article on the front page of the local rag this morning about GM and Stellantis stacking up unfinished vehicles everywhere. I just wonder when the automakers will have enough and start layoff's.

I have seen reports on Ford doing this also & wondered why they were doing it. Then I remembered all of the money that came from the PPP program. They have to keep people working or they have to pay back the PPP loans.

 

[MoKelly]

JIT.. My company loved to use that buzz word back in the 90's, JIT manufacturing, It became known as "Just Isn't There"!


I blame it on the government, shelter in place too long, mask mandates for too long, additional covid benefits on top of normal unemployment that disincentivizes people going back to work.

Some would say that all you note above was an intentional ploy to make as many people as possible dependent upon the government.

The more on the dole the better for certain government types. Once on the dole, it’s very hard to remove.

MoKelly

 

[MossRoad]

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.

 

[5030]

You can get around that as a 2nd or 3rd tier supplier by listing in house inventory as assigned to a particular customer. The outfit I worked for did that all the time. Full warehouse of steel coils, all assigned to customers so no incurred inventory tax.

 

[MossRoad]

You can get around that as a 2nd or 3rd tier supplier by listing in house inventory as assigned to a particular customer. The outfit I worked for did that all the time. Full warehouse of steel coils, all assigned to customers so no incurred inventory tax.

Yes, we know that whoever owns it has to pay the inventory tax if applicable.

 

[Frankenkubota]

^^^^ Absolutely!!! The experts said you couldn’t get a vaccine in under a year. No way. Can’t be done.

Well - it got done.

MoKelly

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