Ford Inside News banner

21 - 40 of 512 Posts

·
Mercury C557
Joined
·
22,734 Posts
...It seems very likely we'll get to some layoffs and plant closures soon, especially with this much volume going away.
waiting for PBS/NightlyBusinessReport... ...wonder if the stock will plummet or ...


Ford brand sedans to be nixed in N.A. under deeper cost targets
Venerable Taurus, Fiesta, and Fusion, won't be replaced

AutomotiveNews
- Nick Bunkley - April 25, 2018


UPDATED: 4/25/18 6:23 pm ET - adds details

DETROIT -- Ford Motor Co. on Wednesday said it plans to stop selling all sedans in North America and that it has nearly doubled its cost-cutting target by 2022 from the plan it laid out only six months ago. The automaker said it will either fix or eliminate unprofitable portions of the business.

Ford said the only cars it will keep in North America beyond their current generations are the Mustang and the Focus Active arriving in 2019.

The automaker said it now expects to achieve an 8 percent global profit margin by 2020, two years sooner than planned. It upped its five-year cost-cutting goal to $25.5 billion, from the $14 billion projected by CEO Jim Hackett in October.

Ford CFO Bob Shanks announced the improved guidance as the company reported a 9 percent increase in first-quarter net income. Its global profit margin was 5.2 percent in the quarter, as higher commodity costs reduced earnings in North America. The company posted a 6.4 percent margin during the same quarter last year.

Ford shares rose 2.6 percent to $11.40 in after-hours trading, as of 5:48 p.m. ET Wednesday.

"Our intention is to raise the level of performance on all parts of the business through fitness," Shanks told reporters at Ford's headquarters near Detroit. "But frankly, that is not going to address completely the underperforming part of the business. We will have to make choices around how we disposition those businesses going forward. We can make different investments; we can partner; we can exit products, markets. And we will do that."

Small cars lose money
Shanks said small cars and "most Lincoln products" are among those losing money.

Ford officials already signaled that some cars would be removed from the portfolio as consumers gravitate toward far more profitable pickups, SUVs and crossovers. He said the Lincoln brand as a whole is not in danger but noted that it lost money in China because it is in ramp-up mode there after being introduced in 2014.

While Ford didn’t mention them, analysts say the future of the Lincoln Continental and MKZ sedans, which share platforms with many of the Ford cars slatted to be scrapped, also remain in doubt.

Shanks suggested that Ford could reduce investment in certain geographic regions or exit them completely if it did not see adequate returns on the horizon. That echoes the strategy General Motors has employed in selling its European business and abandoning several other countries, including Russia.

Less capital spending
He also said the company was reducing its planned capital spending from 2019 through 2022 by $5 billion to $29 billion through such actions as using common “modules” to account for 70 percent of the value of each vehicle and reusing tools and equipment.

Shanks wouldn’t say whether Ford would need to eliminate jobs to achieve the additional $11.5 billion in cost cuts. Nearly half of the cuts would be in sales and marketing -- through incentive optimization, reduced advertising and other actions -- with the rest coming from engineering and product development, material costs, manufacturing and information technology, in that order.

About $4 billion of the $11.5 billion in cuts would be accomplished in 2019 and 2020, Shanks said, with the rest occurring in the subsequent two years. He said the company used “hard work” to find more efficiencies after Hackett unveiled his plan in October. The plan was met with a tepid reaction from analysts and investors, who have been eager to hear more specifics.

“We have looked at every single part of the business,” Shanks said. “I don’t think they’re done yet.”

In the first quarter, net income rose $144 million to $1.74 billion, and revenue grew 7.4 percent to $42 billion. About $100 million of its income was due to a lower tax rate.

Ford’s North American pretax profit fell 9.2 percent to $1.94 billion, with commodity costs accounting for more than the entire decline. It lost $149 million in South America, 37 percent less than in the first quarter of 2017, and earned $119 million in Europe, down 43 percent. Its Asia Pacific business swung to a $119 million loss, from a $148 million profit a year ago.

Ford Credit’s profit jumped 33 percent to $641 million, while the automaker’s fledgling mobility ventures lost $102 million, 59 percent more than a year ago.

This story will be updated.




Ford confirms the only cars it will sell are Mustang, Focus Active
Hybrid F-150, Mustang, Explorer, Escape and Bronco also confirmed

Autoblog
- JAMES RISWICK - Apr 25th 2018


Confirming what has long been suspected, Ford today announced in its quarterly financial report that it will not invest in a next generation of sedans for North America.

"Over the next few years, the Ford car portfolio in North America will transition to two vehicles — the best-selling Mustang and the all-new Focus Active crossover coming out next year," the statement reads. "The company is also exploring new 'white space' vehicle silhouettes that combine the best attributes of cars and utilities, such as higher ride height, space and versatility."

By 2020, Ford says 90 percent of its portfolio in North America will be trucks, SUVs and commercial vehicles. This move is due to consumer demand and product profitability.

The company also announced that it is committed to developing "new propulsion choices," indicating it would add hybrid powertrains to the F-150, Mustang, Explorer, Escape and upcoming Bronco. It also announced it will produce an EV starting in 2020 that will be a "performance utility," and that there will be 16 battery-electric vehicles by 2022.

Now, let's delve into this a bit. First, it's important to note that these announcements concern North America. The recently redesigned Fiesta and Focus will still be sold in other markets (after all, the Focus Active is just a Crosstrek-ified Focus), and sedans like the Fusion continue to have appeal elsewhere. We also wouldn't be shocked if one of those "white space" vehicles with higher ride height, space and versatility turned into a Outback-ified Mondeo Estate.

Another point is that "few years" could mean anything, and that without a firm timetable, the exact discontinuation of each car can be determined at a later date. Given the age of each, though, none seem long for this world. The Fiesta and Focus have been replaced in other markets by next-generation models and therefore are likely to meet their makers first. The Ford Taurus is a million years old, and no one buys full-size sedans, so it's got seconds to live. The Fusion has held up well, but dates back to 2013, putting it in its sixth year (typically the point of a generational change even if Ford tends to drag things on longer than most). The C-Max would be the only other car model, and we don't know anyone who would miss it. The Focus ST and Focus RS ... ah, you'd better move to Europe.

One would imagine the announcement reinforcing Ford's commitment to electrification would be aimed to answer the inevitable questions about the danger of rising gas prices and a product lineup devoted almost entirely of trucks. Certainly, Ford's reliance on trucks and lack of car development in the late 1990s and early 2000s left it ill-prepared for the skyrocketing gas prices and focus on fuel economy that would come later in the decade. The promise of EVs seems meant to assuage the fears of investors and the wagging fingers of the environmentally conscience.

Look for more updates on Ford's grand car cull as questions are asked and further details are discovered.
olo
 

·
Super Moderator
Joined
·
7,893 Posts
Bad move on Ford's part, and quite short sided. This is the whole Ranger discontinuation mistake magnified several times. Lincoln should be losing the MKZ and Continental as well which means Ford will no longer be a full line automaker in NA.

Shanks said small cars and "most Lincoln products" are among those losing money.

I am sure GM, Tesla and ALL the imports are jumping for joy....

Ford officials already signaled that some cars would be removed from the portfolio as consumers gravitate toward far more profitable pickups, SUVs and crossovers.

Better stated Ford is just going to limit their sales to ONLY to pick-ups, crossovers and SUVs....and ONLY customers looking for those vehicles. Ford is giving up on the subcompact, compact, midsize and large car segments, Can't compete...QUIT!

Ford said the only cars it will keep in North America beyond their current generations are the Mustang and the Focus Active arriving in 2019.

No Focus hatch, Sedan, ST, RS....NADA!

I bet the dealerships are PISSED!! This will cut down the number of consumers visiting Ford/Lincoln dealerships and potential sales, to roughly half of what it is today. Millions of consumers just took Ford and Lincoln off their shipping list. Who want's to buy a discontinued model unless it's at a deep discount.

FYI....consumer brand midsize car sales are expected to be over 1.5 Million for 2018.
 

·
Registered
Joined
·
1,812 Posts
Discussion Starter #24 (Edited)
Except Ford has all of this coming in the same time frame. I'm certain they won't be starving for customers.

New Escape
New Explorer
New Focus Active
New Bronco
New Ranger
New Maverick
New Mach1

Not to mention MCEs like Edge ST, SuperDuty, Transit, F-150 and all the Hybrids.

It's really not going to be a big shock, we'll have shiny new stuff to buy either way.

I'm not clear on what is happening with the Mustang timeline either but that may be all-new by 2020.

I'm not sure what to do about Lincoln but I imagine only the SUVs are making money and so be it...get rid of the cars...they aren't so great anyway. I remember thinking that the Continental didn't make much sense at the time when it came out because clearly there was not going to be a growing appetite for it. I wonder if MKC is a profit problem for them but as long as China is key to their future, I'm sure a NG MKC is in the works. I still think Lincoln hasn't cracked the midsize SUV market with MKX/Nautilus but Aviator should help.
 

·
Mercury C557
Joined
·
22,734 Posts
Bloggin said:
...This will cut down the number of consumers visiting Ford/Lincoln dealerships and potential sales, to roughly half of what it is today. Millions of consumers just took Ford and Lincoln off their shipping list. Who want's to buy a discontinued model unless it's at a deep discount...
 

Attachments

·
Super Moderator
Joined
·
7,893 Posts
It looks like Ford is having serious problems they are not talking about. How are they not able to make a profit on a full line of automobiles and the rest of the industry is? This looks like a bad fix for previous bad management decisions.

But I wonder if this has much to do with how Ford has had no word on an EV platform, while killing off the sedans that would use that powertrain. Eliminating the dramatic EV comparison in at the dealership, while they focus on pushing big ICE and hybrid crossovers, SUVs and trucks. Unfortunately for Ford, consumers will just go to another manufacturer who makes the vehicles they want, not just what the manufacturer sees as 'most' profitable for the company.

Ford just seems to be de-evolving as a auto manufacturer, while their competition is clearly focused on the customer and the future.
 

·
Registered
Joined
·
1,812 Posts
Discussion Starter #28 (Edited)
There's no question Ford is going to be a smaller company by marketshare, but they've had to take this route before to get back to profitability. It's not about making profit on a full-line, it's about investing in the future of the full-line. Ford is just getting to it first, I guarantee you the rest will follow one way or another.

And with the new segments and replacements, I don't think it's going to be a dramatic contraction. The biggest hit to their sales will probably happen later this year or early next year with Focus going away without anything new to offset the loss besides the lackluster EcoSport. By the time Fusion goes away we will have new products to help out. F-Series will also likely get hit by the new GM and RAM trucks which MIGHT cause them the biggest grief.
 

·
Super Moderator
Joined
·
7,893 Posts
Except Ford has all of this coming in the same time frame. I'm certain they won't be starving for customers.

New Escape
New Explorer
New Focus Active
New Bronco
New Ranger
New Maverick
New Mach1
But these are all mostly the same 'vehicle'. If you don't want a SUV or Truck...Ford has nothing for that consumer. It's like going to a restaurant and all they sell is chicken in 8 different ways, and you don't want chicken. So you go to a restaurant that offers what you want.

Ford is marketing themselves in a corner. I guess next the only color they will offer is black, since it's more profitable than offering so many colors.

Again...this will not work out well for Ford or Lincoln.
 

·
Registered
Joined
·
1,812 Posts
Discussion Starter #30 (Edited)
But these are all mostly the same 'vehicle'. If you don't want a SUV or Truck...Ford has nothing for that consumer. It's like going to a restaurant and all they sell is chicken in 8 different ways, and you don't want chicken. So you go to a restaurant that offers what you want.

Ford is marketing themselves in a corner. I guess next the only color they will offer is black, since it's more profitable than offering so many colors.

Again...this will not work out well for Ford or Lincoln.
Ford doesn't sell a minivan either and even with automakers taking advantage of it, they have no interest in competing because they know how small that pie really is, especially for the cost of getting back into it. Ford will have products for new customers, it doesn't have to keep all of them if they aren't worth it. Ford also has a new BEV platform which may come with some new vehicle form factors to get excited about. We won't see the 3-box sedan again, but new sleek and versatile crossovers are promised. I'm certain we will have plenty to get excited by now that they don't have the sedan ball-n-chain to sort out.

BTW, Tesla is also loosing money and it's survival remains in doubt. Until Tesla starts making cars in volume, reliably, and profitably over an extended period of time, they are not a benchmark for anybody...by which time Ford will already have entered the market with the Crossover BEV Tesla still lacks. Ford has the RIGHT BEVs coming and I'm pretty excited. I see a tremendous amount of positives, they are doing exactly what I was expecting and predicting they would do. Today is an awesome day for Ford, the future is finally coming into focus and I think they look the most poised moving forward. I couldn't be more excited...I just hope all the products are good.
 

·
Super Moderator
Joined
·
7,893 Posts
There's no question Ford is going to be a smaller company by marketshare, but they've had to take this route before to get back to profitability. It's not about making profit on a full-line, it's about investing in the future of the full-line. Ford is just getting to it first, I guarantee you the rest will follow one way or another.

And with the new segments and replacements, I don't think it's going to be a dramatic contraction. The biggest hit to their sales will probably happen later this year or early next year with Focus going away without anything new to offset the loss besides the lackluster EcoSport. By the time Fusion goes away we will have new products to help out. F-Series will also likely get hit by the new GM and RAM trucks arrive which MIGHT cause them the biggest grief.
So not only is Ford reducing in market share, Lincoln will become even more of a niche market brand. MKZ, Continental, MKT are all gone. Just big SUVs for a luxury brand marketed to an older consumer.

This is just goofy. Normally an automaker would build a better product in the segment that attracts more sales, and work their way back to profitability. But Ford just QUIT! Gave up and ran the opposite direction toward big crossovers, SUVs and trucks.

It's like struggling in a trig class, and instead of studying more, using the tutor or asking for extra credit, Ford just dropped the difficult class and enrolled in a PE.

This is a very weak move on Ford's part, and shows that they can't step up their game and compete with the global competition in ALL segments, but instead retreats back into what's safe.

This is a BIG opportunity for the consumer and luxury competition to take that market share Ford is giving up, where today cars make up over 50% of the consumer auto market.
 

·
Mercury C557
Joined
·
22,734 Posts
...Today is an awesome day for Ford, the future is finally coming into focus and I think they look the most poised moving forward than any other carmaker.
okay - something I've been wondering this afternoon: WHY NOW/TODAY?!?
[ esp re: my nothing but NEGATIVES ]
WHY couldn't they -didn't they- wait for a time when they could have said
"While we won't have X Y Z, we're bringing out ABC D...??"
.
 

·
Registered
Joined
·
1,812 Posts
Discussion Starter #33
Ford is doing everything it needs to in the markets they compete in. The updated US portfolio reflects the market conditions.

They aren't quitting, they are adapting to the market and anticipating the future. I think you're ignoring the realities of the market forces, you believe the automakers dictate the market (If you build it, they will Come!). Ford can build the NICEST Compact or Midsize car in the world and loose every penny they put into it because people don't care and you can't make them care if they don't want that type of car. More importantly, the customers that do want that car are going away or want to spend less for it.
 

·
Super Moderator
Joined
·
7,893 Posts
^...Tesla's survival has never been in doubt. The company has more investor clout that any other automaker in the US. Then there is this..

“2018’s likely to be a very big year for us,” Musk said in a conference call, after describing 2018 as a “transformative year” in a letter to shareholders. “At some point in 2018, we expect to begin generating positive quarterly income on a sustained basis, operating 5,000 per week of Model 3 production and I’m optimistic that we will be GAAP profitable.”

Model 3 production just got another upgrade..

According to Musk, the upgrades made to the production line last week will enable a ramp up for “Model 3 production of 3000 to 4000 per week” over the next month.

Therefore, I wouldn’t be surprised if those ~5,000 new VINs are registered for the next two weeks of production.


Model 3 production should hit 5k per week before the June date provided and reach Musk's profitability target along the way. :)

Ford on the other hand has retreated back into SUVs and trucks.....and diminished market share. I guess Canada will lose sedans as well and lose market share.
 

·
Registered
Joined
·
2,700 Posts
okay - something I've been wondering this afternoon: WHY NOW/TODAY?!?
[ esp re: my nothing but NEGATIVES ]
WHY couldn't they -didn't they- wait for a time when they could have said
"While we won't have X Y Z, we're bringing out ABC D...??"
.
I thought I stumbled across some old April fools fake news from earlier this month until I saw today's date on the news reports. Crazy. :surprise2:
 

·
Registered
Joined
·
744 Posts
Ford should have thought about this years ago. The first few years they started to see crossovers increase, they should have planned hard.

Okay, so crossovers are becoming more popular than sedans so we have to build more of those. But what about people who like /need/still want sedans? Let's design a new style of car that sits high, is stable, has lots of legroom, lots of trunk space and still looks and feels like a sedan, but better. We should get a concept of this new segment ready.
 

·
Super Moderator
Joined
·
7,893 Posts
Ford is doing everything it needs to in the markets they compete in. The updated US portfolio reflects the market conditions.

They aren't quitting, they are adapting to the market and anticipating the future. I think you're ignoring the realities of the market forces, you believe the automakers dictate the market (If you build it, they will Come!). Ford can build the NICEST Compact or Midsize car in the world and loose every penny they put into it because people don't care and you can't make them care if they don't want that type of car. More importantly, the customers that do want that car are going away or want to spend less for it.
Toyota sold over 35k new Camry models in March. Honda sold over 32k Civic compact cars in March....it's not the 'segment' that has the problem, it's Ford's old models that are less attractive to consumers that impact their sales.

Big winners and Big losers in a segment does not indicate a problem with the segment, but only with what the big loser. Ford just conceded the small, compact and midsize car segment BACK to the imports who owned the segment before Ford tried to gain traction.....but lost their focus.
 

·
Mercury C557
Joined
·
22,734 Posts
...I guess Canada will lose sedans as well and lose market share.
along with the being-considered exit from SouthAmerica, they can leave Canadia and close Oakville alltogether


Ford should have thought about this years ago...
...they should have planned hard...
another thing I've wondered about - along the lines of thinking outside the box:
HAS FORD REALLY DONE ENOUGH WORST-CASE SCENARIOS? ...don't look like it
 

·
Registered
Joined
·
5,401 Posts
So not only is Ford reducing in market share, Lincoln will become even more of a niche market brand. MKZ, Continental, MKT are all gone. Just big SUVs for a luxury brand marketed to an older consumer.

But Ford just QUIT! Gave up and ran the opposite direction toward big crossovers, SUVs and trucks.
Buyers are the one's who're quitting. They're no longer buying traditional sedans in the same volume, and that number continues to drop rapidly. People who want steak don't care how much better your new and improved hamburger is, they want what they want. There is no evolution/innovation of the sedan as we know it that is going to suddenly change the market's momentum towards crossovers.

The funny thing about all this gnashing of teeth is if we just take a step back and look at the broader picture we'd see that crossovers are simply the evolution of the family sedan. Is it better to invest in a dying market, or redirect that investment towards where the market is heading? I know after 100 plus years this big of a change is more than a little shocking, but I think people are overreacting in a big way.
 

·
Super Moderator
Joined
·
7,893 Posts
Ford should have thought about this years ago. The first few years they started to see crossovers increase, they should have planned hard.

Okay, so crossovers are becoming more popular than sedans so we have to build more of those. But what about people who like /need/still want sedans? Let's design a new style of car that sits high, is stable, has lots of legroom, lots of trunk space and still looks and feels like a sedan, but better. We should get a concept of this new segment ready.
Exactly!!

New Camry... selling over 35k units monthly NOW...



New Civic, also selling over 35k monthly...



Ford just got cheap with a habit of letting models go too long before new models, and the competition upgrades and leaves Ford in the dust. Ford responds wit blaming the 'segment' when their products that are slow selling are the oldest in the segments.
 
21 - 40 of 512 Posts
Top