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June 2012 Sales Results

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When is it not desirable to increase market share? When the cost of expansion to gain that market share outweighs the potential profit.

 

Adding production at a new or existing plant is extremely expensive and requires capital investment. If you miscalculate and don't need that capacity a year or two down the road you've just wasted billions of dollars.

 

If the plant has a capacity of 300K, it's better to sell 300K with a 20 day supply and low incentives than to add a new plant or retool an existing plant to sell 320K.

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long term ford will be fine, but this year and the next will see alot of money being left on the table because of capasity issues.

 

And that's the important part. Short term capacity "problems" aren't going to have a very big negative impact on the health of Ford. On the contrary, being saddled with huge amounts of excess capacity for years just on the chance that it might be needed again at some point could have been devastating to Ford's bottom line. Additionally, most of the plants Ford closed would have required huge investments to modernize if they were going to be used to produce vehicles today. It may not have even been any cheaper than building a new assembly plant from scratch elsewhere.

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And that's the important part. Short term capacity "problems" aren't going to have a very big negative impact on the health of Ford. On the contrary, being saddled with huge amounts of excess capacity for years just on the chance that it might be needed again at some point could have been devastating to Ford's bottom line. Additionally, most of the plants Ford closed would have required huge investments to modernize if they were going to be used to produce vehicles today. It may not have even been any cheaper than building a new assembly plant from scratch elsewhere.

 

Well, if Ford thinks that it will indeed need added capacity in a few years even after taking over AAI, then it will need to make up its mind soon on building a new plant somehere probably in some rural setting. The plants Ford closed are gone for good. So it will have to be a new one in some cornfield. It will take a few years to plan a new plant, build it, tool it, and put in a rail head. And of course with that comes supplier plants within same complex. I don't think Ford is capacity constrained yet with capacity still left at AAI and OAP, but if Ford is to make a decision about added capacity over that, you do have to plan years before just as planning a new vehicle. A new plant could be part of the next UAW contract as a sweetener to get them to agree.

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Well, if Ford thinks that it will indeed need added capacity in a few years even after taking over AAI, then it will need to make up its mind soon on building a new plant somehere probably in some rural setting. The plants Ford closed are gone for good. So it will have to be a new one in some cornfield. It will take a few years to plan a new plant, build it, tool it, and put in a rail head. And of course with that comes supplier plants within same complex. I don't think Ford is capacity constrained yet with capacity still left at AAI and OAP, but if Ford is to make a decision about added capacity over that, you do have to plan years before just as planning a new vehicle. A new plant could be part of the next UAW contract as a sweetener to get them to agree.

 

I would think that Ford's first thought, if needed, would be to expand existing plants. If that was not viable, then the purchase of an existing facility (or at least something that has infrastructure in place or nearby, like the railhead you mentioned) would probably be pursued next. Breaking ground on a brand new facility in a new location would probably be the last option they would consider. Not saying it won't happen, but it'll probably be awhile.

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Well, if Ford thinks that it will indeed need added capacity in a few years even after taking over AAI, then it will need to make up its mind soon on building a new plant somehere probably in some rural setting. The plants Ford closed are gone for good. So it will have to be a new one in some cornfield. It will take a few years to plan a new plant, build it, tool it, and put in a rail head. And of course with that comes supplier plants within same complex. I don't think Ford is capacity constrained yet with capacity still left at AAI and OAP, but if Ford is to make a decision about added capacity over that, you do have to plan years before just as planning a new vehicle. A new plant could be part of the next UAW contract as a sweetener to get them to agree.

Well, in addition to AAI and OAP, KCAP and Avon Lake will have extra capacity after the E-series/Transit swap. Personally, I don't see Ford open a new plant unless they decide to re-enter the small/compact truck market, in a big way. IF that happens, I could see a new ~200k/year "new Ranger"/F150 flex plant.

 

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I would think that Ford's first thought, if needed, would be to expand existing plants. If that was not viable, then the purchase of an existing facility (or at least something that has infrastructure in place or nearby, like the railhead you mentioned) would probably be pursued next. Breaking ground on a brand new facility in a new location would probably be the last option they would consider. Not saying it won't happen, but it'll probably be awhile.

 

Not that many years ago, just before the financial crisis or thereabouts, Ford did talk about building an all new plant somewhere in rurual area. But of course the Big Recession ended that. I personally would rather see Ford using an existing site that at least had an assembly plant at one time, and the surrounding infrastructure needed, but unfortunately that's not what most developers do. I would look for Ford to do same as transplants...build in cornfield unless the UAW stops it. And I'm assuming auto sales stay in 14-15 million range for years to come. There is still a lot of pent up demand, and people are not buying homes and furnishings like they did before meaning more money for nice vehicles.

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Well, in addition to AAI and OAP, KCAP and Avon Lake will have extra capacity after the E-series/Transit swap. Personally, I don't see Ford open a new plant unless they decide to re-enter the small/compact truck market, in a big way. IF that happens, I could see a new ~200k/year "new Ranger"/F150 flex plant.

 

Isn't the Transit Connect going to KCAP also? I don't know what else Avon Lake could build as I doubt if Ford has other plans, but maybe. AAI will be at capacity late 2013 I would think. Only OAP could use some more production and probably another product or two depending upon volume. Looks to me like every other plant will be at capacity or is already. Nice problem to have for a change. I would imagine Ford is visiting the new plant question from time to time at meetings as it does take a few years to get one going from scratch and is long term decision.

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It didn't look good when it was launched either, so I don't see what its age has to do with it. The GM and Ford fullsizers are much more attractive, albeit more conservative. Those fenders on the Armada are just...awful. Godly awful.

And that's why we're all entitled to our own opinion. I personally find the Armada as good if not better looking than practically any large SUV/CUV on the market. It's on par if not better looking than the Expy, and better/worse due to the powertrain (1 less gear & worse mpg, but better performance than the Expy). Not fond of the styles of the Tahoe/Burban, Durango, Explorer, Acadia, Traverse and Sequoia for a few. Now the Flex, that is a thing of beauty.

 

Similar to when I purchased my F150, the Titan was a close 2nd, with the Silverado, Tundra and Ram being distant behind them. Biggest downfall of the Titan/Armada in my eyes is the mpg's.

Edited by V8-X

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long term ford will be fine, but this year and the next will see alot of money being left on the table because of capasity issues.

Only for the Summer Months, Fields is expecting that Ford's increases in Q3 should begin to make up the shortfall in numbers

and by Q4 the seasonal slowing will allow Ford to catch right up but they can still trade on higher ATPs because of tight inventories

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Isn't the Transit Connect going to KCAP also? I don't know what else Avon Lake could build as I doubt if Ford has other plans, but maybe. AAI will be at capacity late 2013 I would think. Only OAP could use some more production and probably another product or two depending upon volume. Looks to me like every other plant will be at capacity or is already. Nice problem to have for a change. I would imagine Ford is visiting the new plant question from time to time at meetings as it does take a few years to get one going from scratch and is long term decision.

Would love to see Ford do a LWB Explorer "EL" out of OAP, I think that would have a real shot at increasing Explorer numbers even further..

and maybe have that EL version also done as a new Lincoln Aviator

Edited by jpd80

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And that's why we're all entitled to our own opinion. I personally find the Armada as good if not better looking than practically any large SUV/CUV on the market. It's on par if not better looking than the Expy, and better/worse due to the powertrain (1 less gear & worse mpg, but better performance than the Expy). Not fond of the styles of the Tahoe/Burban, Durango, Explorer, Acadia, Traverse and Sequoia for a few. Now the Flex, that is a thing of beauty.

 

Similar to when I purchased my F150, the Titan was a close 2nd, with the Silverado, Tundra and Ram being distant behind them. Biggest downfall of the Titan/Armada in my eyes is the mpg's.

 

Yes, looks are subjective. But sales tend to bear out that my subjective opinion on them is more common than yours. :P

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Isn't the Transit Connect going to KCAP also? I don't know what else Avon Lake could build as I doubt if Ford has other plans, but maybe. AAI will be at capacity late 2013 I would think. Only OAP could use some more production and probably another product or two depending upon volume. Looks to me like every other plant will be at capacity or is already. Nice problem to have for a change. I would imagine Ford is visiting the new plant question from time to time at meetings as it does take a few years to get one going from scratch and is long term decision.

1. TC built here is not a sure thing. If it does come, it better has a config for 3-row seating, not cargo van only.

2. Avon Lake will only have medium truck after E-van is gone, but Ford has not said it will be closed. So it's a prime target to be retooled, flexed, for mid/long term extra capacity.

3. IMHO, next Taurus will be CD4 based, but PI and MKS will stay on D4. Then the natural consolidation would be D4's (Exp./Lincoln Exp./MKS/PI/PIU/Flex/MKT-if not axed) all go to Chicago. OAP and AAI will be CD4 flexed. This is of course, if the Taurus does not go GRWD.

 

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1. TC built here is not a sure thing. If it does come, it better has a config for 3-row seating, not cargo van only.

2. Avon Lake will only have medium truck after E-van is gone, but Ford has not said it will be closed. So it's a prime target to be retooled, flexed, for mid/long term extra capacity.

3. IMHO, next Taurus will be CD4 based, but PI and MKS will stay on D4. Then the natural consolidation would be D4's (Exp./Lincoln Exp./MKS/PI/PIU/Flex/MKT-if not axed) all go to Chicago. OAP and AAI will be CD4 flexed. This is of course, if the Taurus does not go GRWD.

With less emphasis on large cars, the need for Taurus to shift platforms is not there, Ford could play D3 Taurus for a few more years yet.

I have learned that apart from unconfirmed web documents, there is no link between D568 and CD4 Taurus

in the same way that U375 was assigned to 2015 Explorer only to discover it was actually T6 SUV.

Not everything written on the web is true.

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Personally the Armada is a good looking rig, especially for its age and lack of updates, with plenty of power, but a little thirsty. Compared to large CUV's, which this is more your traditional SUV, being of Titan architecture, it may have the best style. Actually see one everyday (neighbor has one) and it actually drives quite well and is nice inside and out.

 

 

:hysterical2: The Escape, even the new 2013 model, is not a premium vehicle. If you consider the Escape premium, then you must also consider the Focus premium. Cause each come in stripped models, as well as your Titanium or Platinum models with bells and whistles.

 

And what evidence supports your case that Escape owners are more likely auto owners and Fiesta/Focus owners are former manual owners? I see absolutely no basis for those comments.

 

And I did see my first 2013 Escape on the road this past weekend. Didn't get to check out the interior, but on the exterior it's "Meh". Front clip from the front view is nice and aggressive. The rear, well leaves a lot too be desired, but not much you can do with that design. And the profile, just as I thought from the pics posted here, is plain ugly IMO. Looks like a CRV/Rav-4 cabin connected to a Focus like front end. The entire area prior to the windshield/doors, is too low, making it look like a car connected to a CUV.

 

The Armada is a huge monstrosity! A friend's mother has one she never drives it, prefers her 2010 Focus instead (which has SYNC, one of the reasons she got it, he has a 2011 Focus with SYNC, they talk all the time).

 

And I consider the Escape and the Focus to be Premium vehicles, especially in the Titanium versions. Navigation, self parking, leather, etc. etc are not the signs of a car with modest aspirations. Even the basest model is very good, the solid structure and great driving dynamics are built in, without all the extras.

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And I consider the Escape and the Focus to be Premium vehicles, especially in the Titanium versions. Navigation, self parking, leather, etc. etc are not the signs of a car with modest aspirations. Even the basest model is very good, the solid structure and great driving dynamics are built in, without all the extras.

While the whole range would not fit the classification of a Premium vehicle, it does fit with Ford's goal of Affordable Quality.

I did a build and price exercise on a loaded Focus Titanium versus a loaded Buick Verano and the Focus was around $1500 less.

Focus and the '13 Fusion are good examples of the Ford brand moving to a new higher level, a notch above Chevrolet and more like Buick.

 

Having Ford originator vehicles this well endowed with options and quality bodes well for development of future Lincoln vehicles.

 

Not meaning to derail the thread but part of me wonders what might have been with a Full Mercury line, those becoming re-skinned Fords

instead of Lincoln which is now confirmed as moving to dedicated top hats. You just feel that under different circumstances, Ford could have

pulled it off by remaking Mercury as a North American "Volvo"...Imagine that greater volume of product helping Mercury/Lincoln dealers.

 

In any case, I am sure that 100% focus on the Ford brand has reaped scales of quality and volume not otherwise possible with divided brands.

Edited by jpd80

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...Not meaning to derail the thread but part of me wonders what might have been with a Full Mercury line, those becoming re-skinned Fords

instead of Lincoln which is now confirmed as moving to dedicated top hats. You just feel that under different circumstances, Ford could have

pulled it off by remaking Mercury as a North American "Volvo"...Imagine that greater volume of product helping Mercury/Lincoln dealers...

 

2ic5rw7.jpg

 

(don't mind me)

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