Will Ford go under financially ?

[Spiveyman]

I am always baffled at how these auto companies can be going broke. Look at the roads. Around here people drive nice cars and seem to trade up all the time. I see $50k diesel dually trucks everywhere, $40K SUV's... etc. All brand new. How in the world can they be going broke? (Now this will likely ruffle a few feathers) UAW. It would probably be better if they could go broke, dump the union, and start all over. We have a Toyota plant right next door, no union, the workers make a very decent living, the vehicles are pretty daggone good, and less expensive. It's a win/win/win situation there. Don't get me wrong, I still think of them as rice rockets and will likely only buy Ford as long as there are Fords to buy, but you can't argue with success.

 

[Bird]

Everyone remembers Iacocca worked for $1 per year when he took over Chrysler, but no one remembers he was still being paid a huge severance package by Ford. In reality Ford was paying him to dig Chrysler out of the hole.

If you've never read the book, Iacocca, you might find it interesting reading. He was a hero to some, although I really can't understand why. Ford made him very wealthy, but he cried like a baby about how bad Ford treated him, then he went to Chrysler and treated people as bad or worse than he claimed Ford treated him. And of course he never would have taken the job at Chrysler if he hadn't expected a huge income; the dollar a year deal was just silly.

 

[SnowRidge]

If you've never read the book, Iacocca, you might find it interesting reading. He was a hero to some, although I really can't understand why. Ford made him very wealthy, but he cried like a baby about how bad Ford treated him, then he went to Chrysler and treated people as bad or worse than he claimed Ford treated him. And of course he never would have taken the job at Chrysler if he hadn't expected a huge income; the dollar a year deal was just silly.

Remember how all the auto execs testified to congress that airbags would kill the industry. Later, they were all touting them, and Iacocca was at the forefront. Remember his TV ads? My favorite quip back then was, "Chrysler products come with two airbags, one in the car and the other on TV."

He also tried to get Congress to forgive the Chrysler loan, which would have enriched the stockholders at the taxpayers' expense. For once, Congress did the right thing.

 

[cp1969]

It's those darn pensioneers, I tell ya!

-Mike Z.

There's a lot of truth in that. George Will (I think) wrote that GM is a pension and medical benefits distribution entity that coincidentally makes cars.

I read in Tuesdays paper that GM has $55 billion worth of pension liabilities.

 

[Red55]

Ya GM has 55 billon in liablities that the ceo/ management never funded while helping themselves to the loot ($$$$$). Toyota workers have it good because of the other unions (pay them crap> then they'll push to unionize) By the way I'm or was anti union. Kinda hurts though when you see the union people passing you by in terms of real salary and benefits. Hurts even more when they dump decaded 30yr + employees to save a few pesos. Enough - thanks for listening ED

 

[jmc]

There's an interesting web site whose premise is that the automotive press is so corrupted by ad revenue that they tend to sugar coat the news about the auto industry and their products. One of their regular features is a series of editorials called "Ford Death Watch" that chronicles Ford shooting themselves in the foot. Also available is "General Motors Death Watch" and "Chrysler Suicide Watch". The site contends that while the Detroit auto industry likes to whine about their "Legacy Costs" to the unions, their REAL legacy costs are 30 years of poor products, bad service, and customer abuse.

John

Automotive news and editorials, weekly car industry editorials from TTAC

 

[Spiveyman]

I suspect there are lots of factors that all add up. Certainly poor quality will get you as fast as anything, but are sales really that poor? I see so many new cars and trucks all over the road, if sales were any higher we wouldn't have any place to put all of them. Maybe sales are down, but cars cost a fortune these days and most families have 2 or 3 or 4... of them. How many teenagers have to borrow dad's car these days. Most of them have their own cars that are more expensive than mine.

One piece of automotive "press" if you call it that, which is not biased towards the big 3 - consumer reports. If it ain't Toyota, they hate it. The only possible exception is the F-150 which gets Toyota-like reviews.

 

[dgl24087]

Profits are being compromised by rebates and low or no interest financing. If the manufacturers hadn't gotten greedy by starting their own finance companies and price gouging the consumer with outrageous margins on trucks and SUV's, and had built more economical vehicles instead of believing that fuel costs would be low forever, they wouldn't be in the position they are in today, but this is just my opinion.

 

[jmc]

One piece of automotive "press" if you call it that, which is not biased towards the big 3 - consumer reports.

Exactly. They have never accepted advertising to avoid a conflict of interest.

Mostly what that site considers "automotive press" is Car and Driver, Motor Trend, etc.

John

 

[300UGUY]

I hope not, I don't work for Ford, but I don't wish unemployement on anyone. I think there will be a lot more cutting jobs, pay and benefits. The auto industry is changing very quickly. Ford has the capacity to produce 25% of the cars and trucks in the US market. It's actual market share is maybe 10 - 12%. The unused capacity is expensive to maintain. It is facilities, managers, workers and suppliers. Getting shed of that is painful. I sure wouldn't want to make the decision that a given plant, or employee has to go for the good of the business. American workers have it tough, no matter if youre union or not. Manufacturing is this country is declining very quickly. For every job at Ford, ther are 8 or more jobs at suppliers.