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A not so nice view on Hackett


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3 hours ago, akirby said:

I don’t mean to sound dismissive, but what you and your friends want to buy (or me and my friends) is irrelevant in the bigger picture.   What matters are actual sales and profits and 3 things are really clear:

People want and are willing to pay a premium for Utilities of all sizes.

People are not buying as many sedans and what they are buying are cheaper models that don’t yield much, if any, profit.

F150, SD, Navi and Expy are setting sales and ATP records with their current drivetrains.

In fact, engine choices on trucks and high performance options on mustang have never been better.

With the 7.3 coming (pretty sure this one will be here in my lifetime), I'll agree with you on powertrains for the trucks. It took 10+ years for them to bring a better gas engine to the SD. The F-150 has the best power trains in 1/2 tons, hands down. 

 

As far as the Mustang goes: it's bad ass no doubt. I just happen to like the 197 better...specifically the 13-14's.

 

The whole elimination of sedans is yet to be seen as right or wrong. I think we can both agree that the way it was handled was a clusterfuck of epic proportions. This whole SUV thing could change over night; and if does, it won't end well for Ford. 

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2 hours ago, mackinaw said:

I've soured on GM as of late.  Even sold my stock.  Barra has done some good things, like exiting Europe, but pulling out of India (the fourth largest auto market in the world, and growing) makes me question her priorities.  

And I really question GM's push to be a 'modern tech" company.  Yeah, EV's and AV's are the future, but widespread public acceptance of both is probably decades off.  In the meantime, their latest products seem to mediocre at best.  Their new full-size pickup is a disappointment, usually ranking dead last in a comparison test with Ford and Ram.  The Camaro is another botched attempt (so bad that GM is rushing through another styling update so as to make it more competitive with the Mustang and Challenger), and Cadillac's latest full-size SUV, the XT6, was met with yawns at the Detroit Auto Show.   

Maybe Barra will surprise me, but for now, this investor will sit on the sidelines.

I agree, early on she seemed to be making some smart decisions. Now I think what she is doing will end up with GM sold to the Chinese, she is Wall street CEO who cares more about finance that building good product. GM's new product of late is a disaster, and for their existing decent product they have been on a decontenting spree the past two years. She is probably the worst Automotive CEO there is currently, GM really needs to go outside its corporate culture for its next CEO.

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1 hour ago, silvrsvt said:

There is no reason why the stock price should be as low as it is-its Wall Street punishing them for not operating like a Tech Company. 

Wall street punishes them because they are a family run company, it also doesn't help they have almost 4 billion outstanding shares, in 2006 there was 1.8.

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9 hours ago, Harley Lover said:

Part two of the Autoextremist opinion:  http://www.autoextremist.com/

They don't call him Autoextremist for nothing! 

Autoextremist is correct when he says "Ford is in a real state of urgency at this very moment." It sure is. And correct as well saying "Ford business is down everywhere in the world, in some cases by double digits, and it’s not getting better."

But he fails to understand Ford's predicament when he says "What about growth, which is the lifeblood of any company?"

Growth is not the lifeblood of any company. And certainly not of Ford right now or in the near future. I said this before on this forum.

Sales growth should not be a priority for Ford right now. Particularly in non-core segments and regions. Ford has a lot of organizational issues that have to be fixed first.

Here are some thoughts business consultants Jim Blasingame and Peter Meyer had about the fallacies of growth.

  • "If a tree is bent, fertilizing it won't make it grow straighter – only faster in the wrong direction. If you have organizational challenges, don't grow until they’re resolved."
  • "One of the rudest awakenings any business can have is when projected sales growth is achieved, but profit is no better, or perhaps worse, than a period of lower sales."
  • "Being the market leader is overrated. Peter cites research showing only 29% of market leaders were also profit leaders. Not only are you not going to sell every customer, you don't want every customer. Many customers, and some customer profiles, aren’t profitable. Remember, you don't spend sales."
  • "Write this on a rock ... Just because you can grow your business doesn't mean you should."
I think Hackett understands all this.
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11 hours ago, 351cid said:

The whole elimination of sedans is yet to be seen as right or wrong. I think we can both agree that the way it was handled was a clusterfuck of epic proportions. This whole SUV thing could change over night; and if does, it won't end well for Ford. 

I don't think so-SUV/CUV's have been a thing for almost 40 years now and it seems like its accelerating as time goes on. The difference in fuel economy is minuscule between a Sedan and CUV and CUV sales started pulling away from sedan sales in 2013, when gas was still around $3-4 gallon.  Gas prices are physiological-changes are often a knee jerk response that change after the initial impact of it.  

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People misunderstand the driver behind cancelling Focus and Fusion in NA.   They need the plant capacity for new trucks and utilities and they need to use the people resources on other new projects.  There is a fixed amount of capital and fixed amount of people resources so to add one you have to cut something else.

And I'll say it again - once they convert Louisville and the Mexican plants to C2 they can easily add car production side by side with the utilities if they have the capacity and the market will support it.

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29 minutes ago, akirby said:

People misunderstand the driver behind cancelling Focus and Fusion in NA.   They need the plant capacity for new trucks and utilities and they need to use the people resources on other new projects.  There is a fixed amount of capital and fixed amount of people resources so to add one you have to cut something else.

And I'll say it again - once they convert Louisville and the Mexican plants to C2 they can easily add car production side by side with the utilities if they have the capacity and the market will support it.

Yes, with a fixed amount of capacity, capital, and resources, the best option is to produce the product that will most likely result in a more profitable sale.

 

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Quote

And what about those board members? How can they sit back and watch this train wreck unfolding without doing something? Why has it taken so damn long to get worried about the state of the company?

Because they've seen the internal plans and business cases that haven't yet been made public.

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16 hours ago, rmc523 said:

I wasn't aware that practice stopped?  Based on ads I see anyway.

For awhile, it did seem as though GM was putting more effort into its vehicles - particularly the interiors. We rented a first-generation Cruze while in Florida in 2013, and I was pleasantly surprised. It felt solid but not ponderous. The current one seems like a step back from the first Cruze.

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16 hours ago, akirby said:

Why?  Are you really concerned about Ford's future or are you just worried that they won't be building something you want to buy?

Clearly akirby has not read the following or has dismissed it as "fake news"

20 hours ago, Harley Lover said:

Part two of the Autoextremist opinion:  http://www.autoextremist.com/

From that article

Quote

Ford business is down everywhere in the world, in some cases by double digits, and it’s not getting better. What about growth, which is the lifeblood of any company? It’s nowhere to be found in Hackett’s strategy, unless you count the drunken-sailor-like spending on Mobility. Talk about vague. Spending on “mobility” is like betting on the come that’s just not there, and even if it should happen to work out for the company, Ford’s slice of the mobility pie threatens to be miniscule, at best. Needless to say, a “zero growth” strategy does not bode well for the long-term health of the Ford Motor Company.

 

16 hours ago, akirby said:

With the products coming out this year and next year I think they’re in great shape, but profits aren’t going to be great for another year or two.   

As for Hackett, you can’t change the company from a board seat.  He needs to stay in place another year or two at least until his plans play out one way or the other

Assuming the American buying public (and Ford is relying on Ford US for pretty much ALL of its profits) don't quickly and dramatically change their buying habits (SUVs/CUVs and pickups) Ford is indeed in a good position short term.  Re-tooling for the Explorer will be very expensive.  Tooling for the Bronco should be much less.  An insider told me that Ford's worldwide commitments for tooling for 2017-2018 far exceeded the previous 5 years !

But there are other HUGE expenditures pulling down the bottom line.  Something very few people see or hear about is the rebuilding of the Dearborn Research and Engineering Center.  Two new Computer Data Centers, one in Dearborn and the other in Flat Rock got "pulled ahead" (probably a good idea) and should be near completion.  Then there is the Michigan Central Train Station (does it have an official Ford name yet ?). These real estate developments will cost BILLIONS over the next couple of years..   Is there enough profit to sustain thee projects and pay their generous dividend ?  While some Wall Street experts are "gushing" about the dividend yield (6.8%), the stock has lost 33% of it value in the past year and more than 50% in the past 5 years.  I would not touch it with a 10' pole !

Let's not forget Brexit !  Ford has made some announcements, but will have to make more changes to production across the pond, meaning more costs.

I agree with The Autoextremist.  Hackett is NOT the guy.  The only possible quick replacement is Joe Hinrichs who was passed over in favor of Hackett.  He knows the company and he knows Wall Street.  Farley should probably go, if even a small percentage of what Peter M. DeLorenzo wrote about him is true.  There is a Board of Directors meeting coming up. Those tend to be very anti-climactic.  Unless all of the negative press about Hackett has influenced Bill Ford, I don't expect any changes in the leadership.

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13 hours ago, 351cid said:

The whole elimination of sedans is yet to be seen as right or wrong. I think we can both agree that the way it was handled was a clusterfuck of epic proportions. This whole SUV thing could change over night; and if does, it won't end well for Ford. 

Well said and I concur 100%

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have to pull this freaking chart out again....cars have been trending DOWNWARDS for almost the past 30 years (outside of the knee jerk response to gas prices in 2007-08) and it really accelerated in 2012-13

 

1914790171_IMG_2011(1).JPG.f0308318f0142a4c6231cfbd2f101522.JPG

Edited by silvrsvt
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47 minutes ago, grbeck said:

For awhile, it did seem as though GM was putting more effort into its vehicles - particularly the interiors. 

It still is. GM's U.S. product lineup is newer and more extensive than Ford's. And GM vehicles over the past 5 years have won more industry awards.

The real test will come in a few years as both automakers introduce new electrified vehicles (particularly BEV) and autonomous vehicles. GM has the lead currently, but Ford is coming on strong. And Tesla and Rivian are going to give both some serious competition. It will be fun to see how things play out.

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1 minute ago, rperez817 said:

It still is. GM's U.S. product lineup is newer and more extensive than Ford's. And GM vehicles over the past 5 years have won more industry awards.

Do awards really mean more sales? How many awards has the Accord and Camry won? Awards are like masturbation-all your doing is fucking yourself. More often then not its just advertising that is paid for by companies (i.e. Motor Trend etc) 

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Just now, silvrsvt said:

Do awards really mean more sales?  

For GM, yes more sales to real retail customers. Chevrolet for example increased its retail market share every year from 2014 to 2017.

GM's overall market share dropped in that period due to major cuts in fleet sales. Both are good things.

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3 minutes ago, rperez817 said:

For GM, yes more sales to real retail customers. Chevrolet for example increased its retail market share every year from 2014 to 2017.

GM's overall market share dropped in that period due to major cuts in fleet sales. Both are good things.

*Shuffles deck, pulls card*

LOL

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17 minutes ago, rperez817 said:

It still is. GM's U.S. product lineup is newer and more extensive than Ford's. And GM vehicles over the past 5 years have won more industry awards.

The real test will come in a few years as both automakers introduce new electrified vehicles (particularly BEV) and autonomous vehicles. GM has the lead currently, but Ford is coming on strong. And Tesla and Rivian are going to give both some serious competition. It will be fun to see how things play out.

The Chevrolet Silverado/GMC Sierra, Cadillac XT4 and XT5 and Chevrolet Cruze have received mixed reviews, at best. The GMC Acadia has been criticized for being too small, and there has been some sales resistance. I wouldn't characterize GM's latest offerings as home runs.

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55 minutes ago, akirby said:

IMO they didn't go far enough after bankruptcy and they still have far too much overhead with too many similar vehicles.  And now they're cutting back on vehicle development and/or just doing a poor job.

 

This is especially true of Cadillac. It was like bankruptcy washed all of their sins away for Cadillac. Their cash cow the Escalade, SRX, and livery special XTS somehow kept them afloat while they focused on Nurburing lap times. All the while,  they pretty much stopped any real CUV development.  And here they are now,  tens of billions wasted away trying to compete with BMW on a German track with very little to show for it. 

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12 minutes ago, grbeck said:

The GMC Acadia has been criticized for being too small, and there has been some sales resistance. I wouldn't characterize GM's latest offerings as home runs.

 

I dunno the Acadia was the flavor of the month CUV wise a few months back in my area (CNJ). I couldn’t swing a dead cat and not hit one. 

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Can people stop saying that the whole CUV/SUV crazy is going to stop overnight! It's not stopping anytime soon and if it does, it will be a very gradual shift. The Explorer (sorry Cherokee) made SUV's a popular mainstream vehicle. They came out in 1990. Think about that for a second. What were you doing 30 years ago? 30 freaking years! Sure, they have moved away from BOF designs to more car like CUV's but their premise is still the same for the most part.  And please, don't use the if gas prices go up argument because that is just wrong no that FE economy is in the same ballpark as sedans. 

I would love to see the stats on percentage of SUV/CUV vs cars sold over annually over the last 30 years. My hypothesis is that cars have been on a slow death since the 90's. I don't have the time to do that though.

 

See Silversvt posting above with chart (nice chart!)

Edited by jcartwright99
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2 minutes ago, jcartwright99 said:

Can people stop saying that the whole CUV/SUV crazy is going to stop overnight! It's not stopping anytime soon and if it does, it will be a very gradual shift. The Explorer (sorry Cherokee) made SUV's a popular mainstream vehicle. They came out in 1990. Think about that for a second. What were you doing 30 years ago? 30 freaking years! Sure, they have moved away from BOF designs to more car like CUV's but their premise is still the same for the most part.  And please, don't use the if gas prices go up argument because that is just wrong no that FE economy is in the same ballpark as sedans. 

I would love to see the stats on percentage of SUV/CUV vs cars sold over annually over the last 30 years. My hypothesis is that cars have been on a slow death since the 90's. I don't have the time to do that though.

 

39 minutes ago, silvrsvt said:

have to pull this freaking chart out again....cars have been trending DOWNWARDS for almost the past 30 years (outside of the knee jerk response to gas prices in 2007-08) and it really accelerated in 2012-13

 

1914790171_IMG_2011(1).JPG.f0308318f0142a4c6231cfbd2f101522.JPG

 

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