Ford Motor Company posted a net loss of $12.7 billion in 2006, the worst loss in the company's 103 year history...
http://www.freep.com/apps/pbcs.dll/a...70125006&imw=Y
GM isn't doing so well either... Do you think in the next decade or so, (or earlier) that we will see Ford or GM go out of business?
They are in a huge restructuring right now, which will cost them big bucks for the next year or two. After that, they should theoretically do better. I don't think they'll go bankrupt, but that's just my $.02.
I hope they stay around for a while!! My sister works for Ford, and they have a tuition reimbursement program. She's in grad school right now, so we want Ford to stay around long enough for her to finish her degree.Originally posted by DPP
Ford Motor Company posted a net loss of $12.7 billion in 2006, the worst loss in the company's 103 year history...
*snip*
GM isn't doing so well either... Do you think in the next decade or so, (or earlier) that we will see Ford or GM go out of business?
"We do not need any other Tutankhamun's tomb with all its treasures. We need context. We need understanding. We need knowledge of historical events to tie them together. We don't know much. Of course we know a lot, but it is context that's missing, not treasures." - Werner Herzog, in Archaeology, March/April 2011
I predict a merger of the two. It'll be dubbed "GMF" General Motors Ford company. Two of the final 3 traditional "American made" cars will put aside their differences and rivalries and go thru huge restructuring after all of the buy-outs of their unskilled "button pushers". You will see (and already seeing) $9-$10/hr workers replacing the overpaid $20-$30/hr unskilled workers. Their vehicle prices will drop (or remain the same). This is the only way they can edge up and compete with the foreign auto makers by bringing their high prices down. After this merger they will be more powerful than ever and regain their status among the top auto manufacturers in the world... just my prediction.
Why/how has dodge/chrysler/jeep - the "other" american made, sustained without similar cuts??
Who's gonna re-invent the wheel today?
Chrysler always rightsizes its corporation. It is a constant mantra. Even so they were not immune, still this time they have had to let a few thousand go.
It is important to remember that Ford had a lot of one time downsizing charges. They bought out a ton of employee contracts and gave away a lot of severence pay this year. My brother's girlfriend is an exec, and took the buyout as she was told that if she stayed and was laid off, she would get nothing. She will be out of work at the end of the month.
Detroit has been literally beaten up over the last year. Suburban sprawl has come to an abrupt stop as everyone is terrified to build. Even new subdivisions that were started are sitting there 3/4th empty, with the new owners wondering why they even invested there when no one else will. Strangly new housing in the central city (which was avoided for 40 years) is still selling like hotcakes. I never thought I'd be sad to see sprawl stop.
In 2006
- GM announced 30,000 jobs lost
- Delphi (a major GM sub) lost 30,000
- Ford: 25,000
- Daimler Chrysler 4,000
- Colins & Aikman (thousands more)
- Countless small tool and dye shops are either shells of them former selves or are in the process of closing down.
If this was not bad enough for Michigan's economy:
- Pfizer this week announced it is laying off some 3,200 in Ann Arbor and Kalamazoo.
- Foreclosure rates are hitting record numbers, people are just up an abandoning homes, having a bad effect on the other homes in the State (of which I own two
My main home is some 1.5 miles from Ford's HQ. Some of the houses on my street just look like hell. Last year they were all full. Now some are empty, unkempt and I spend a bit of time finding the owners and hassling them to to minimum maintenance. My 95 year old grandmother lives 2 blocks away so I am staying. Heck even if I sold, where would I go where I would not be impacted? Needless to say I am not happy, but I am thankful to have a relatively secure job.
Ironically, grandma has been living well off of her Ford Pension and medical benefits. She has seen the boom and the bust. She is looking at seeing her benefits cuts and having to kick in for her medical. She figures she has had a good run and was lucky. She sees what has happened to her neighbors.
Not a good time to be in Michigan.
We hope for better things; it will arise from the ashes - Fr Gabriel Richard 1805
GM and Ford should merge, put their collective heads between their knees, and kiss their asses goodbye.
Although $12.7 billion sounds like a lot of money to lose in a year, United Airlines lost $16 billion in the 4th quarter last year. In both cases the losses stem from reorganization. Ford was paying $100k+ to get rid of workers and was shutting plants where United was emerging from bankruptcy. If you take away these restructuring costs then Ford's loss was only $2.8 billion on $69 billion of revenue for North America operations.
Ford is not in danger yet but if they cannot fix the company by 2009 when the huge loans it took out to stay out of bankruptcy starts coming due then we could see the end. Ford pledged all of its physical assets as collateral. Lets hope all the restructuring Ford did will help make the company more competitive.
If Ford can create more cars like the current Mustang then they have a chance.
"If you don't like change, you're going to like irrelevance even less" General Eric Shinseki
if only Ford gave Americans the same cars that keep them successful in Europe and Australia, it might have a shot at surviving in the US marketplace. Why don't we get the good stuff that Ford makes; the Focus (like the late Escort, another case of Europe getting the superior version of the namesake), Mondeo, and Aussie Falcon and Fairlane?
I don't see Ford going out of business, really. Continued American ownership of the company, however, is something else entirely. I could see Toyota or VW/Audi buying Ford out.
If Ford dies, it'll be a big wake-up call in the US for the need for universal health care.
All these American Auto companies had their chance to shine in the past....several times....all they had to do was be innovative....or cutting edge.....and the geezers running the places got greedy and took the "easy" short term way out.....too bad for them, time for the Darwin Economic model to take control.....If they can't hack the new market, make room for a new company that will!!! OUT!!
On the ground, protecting the Cyburbia Shove since 2004.
This is happening at the peak of one of the greatest economic booms of all time.
Forget it. These companies are as good as gone.
Well, being that my father-in-law was given early retirement as an engineer from Ford last summer, he had firsthand knowledge of the inner workings of the company.
He stated often that Ford may be cutting off its legs to save its hair (as in making the high paid but very experienced white collar workers leave, and hiring half as many young inexperienced people to replace them. He said that was starting to erode the quality control of the products.
They may be designed nice new flashier models, but if the long term quality isn't there, then that will hurt.
But may be the car buying public doesn't care about long term quality control. They get a new efvery couple years anyhow.
"Best in initial quality" What the hell does that mean?
I'm sorry. Is my bias showing?
As I understand it the new Mondeo would not market well in the US as it is a small car with a high price tag. I heard a local 'auto reporter' discuss the reasoning last week, just following the auto show. Unfortunately people won't spend more than $16,000 for a small Ford here, in Europe the car retails for a much higher amount.
On a brighter note, GM will be late in stating 2006 earnings. It seems that they made money last quarter and have to double-check the numbers. In addition, new accounting rules were not followed in 2002, so they found and extra $200 million???
We hope for better things; it will arise from the ashes - Fr Gabriel Richard 1805
Maybe they actually fund their design and R&D departments. Ford hasn't made a stylish car/truck/SUV in years.
I am recognizing that the voice inside my head
is urging me to be myself but never follow someone else
Because opinions are like voices we all have a different kind". --Q-Tip
Obviously we do. Why do you think Honda and Toyota vehicles are so popular?
How so -- due to all the unemployed Ford workers?
Besides the new Mustang, I agree with you. The trucks and SUVs are basically the same with a tweak and line change. When the 500 came out, it looked like a taurus on steriods. The new Interceptor concept shows promise, but will it be built? I've only seen one of the new Edge SUVs at a distance. They should take some design cues from some of their "partner" companies like Mazda, Volvo, Jaguar and Aston Martin (don't you wish).
I drive a Sport Trac and really like it.
"Whatever beer I'm drinking, is better than the one I'm not." DMLW
The financial problem with these old-line industrial companies (I'm including old-line Big Steel and all of the rest here) is that they all are facing an avalanche of crippling retiree pension and benefit costs - due to very generous pay and benefit packages granted to their unions, mainly to prevent strikes, during their economic glory days of the 1960s, 1970s and even into the 1980s. They thought that the gravy train would continue on forever.
Fast forward a couple of decades and we start seeing the double-whammy of the economic downturns in the late 1970s/early 1980s and the mid 1990s along with high-quality new competitors coming into the market and they had no choice but to start cutting back on production capacity BIG TIME at their older, less efficient plants. They were producing more cars than the market was demanding and at a price that the market was unwilling to pay.
But, with those union contracts, the labor costs did not go away with the plants being closed and/or sold off (GM has sold off a boatload of their divisions in recent years, too). ALL of those high-paid line workers continue to receive severance and/or retirement pay and benefits - a MASSIVE ongoing cost on the books with zero economic gain for the company. This cost is equal to several thousand dollars per vehicle that their newer competitors do not have to charge.
The only way that Ford will be able to survive, and this is the same as with all of those other big companies whom have preceded Ford down this same path, is to find a way to no longer have to cover those retiree costs.
Yes, this is very harsh to all of those line workers whom were promised that during their careers, but if the money isn't there, it just isn't going to happen.
Mike
My neighbor bought a Ford Focus simply because she believed in buying and supporting American cars only. After countless problems and recalls (American Focus was the single car with the most recalls in the automotive industry ever!), she bought a Toyota Corolla and couldn't be happier.
And what can I say about Ford's predictable demise, the company that has insisted on selling inferior versions of their products to fellow Americans (WHY?) and depends on gaz guzzlers for profits (in 2007!) ?
BTW, many of the most popular 'foreign' cars are in fact built here in the USofA.
Mike (happily driving a very well built 1997 Chevy Cavalier)
Maybe "assembled", but not built - heck, even the Corvette has imported parts, but is assembled in Bowling Green KY.
Who's gonna re-invent the wheel today?
Of course, my old Honda was made in the US, and my spouse's VW Jetta was made in Mexico actually!
By the way, are ALL Fords built in the US, or are some of them made in Mexico?
One thing that will be interesting to witness as it unfolds are Chinese cars 'invading' the American market; with low cost (I heard some models would be 7-8k a piece), Americans could just treat those cars as disposables -- i.e. drive for a few years until warranty expires, get rid of, get another one... Perhaps that will constitute the final nail in the Ford/GM coffin..
Remember the Yugo?
I think Chinese cars will be more reliable than the Yugo, but I see a lot of challenges with China breaking into the North American marketplace. Their newest cars are about as advanced as a 10 year old Korean car or 15 year old Japanese car. If I was a consumer, would I pay $10K for a new Chinese mid-sized sedan with the equivalent of 1990 Japanese technology and unproven reliability and safety, or $10K for a 2001 Honda Accord in good condition? I also think marketing will be a challenge. Chinese auto manufacturer sites are riddled with Engrish, and the model names sound silly to North American ears: Flagcloud, Grand Tiger, Gold Lion, Lucky Star, Beauty Leopard BO (!), and so on. Would American consumers buy a car that has the same name as their local Chinese take-out restaurant? Would they upgrade to the BM, STD, FU or PU packages? There's also depreciation; one of the things that is currently hurting sales of US autos. How much cash will you be able to get for your 2009 Chery Happy Panda SHT in 2014?
Right now, the marketing appears substandard and immature, but these automakers could take a lesson from VW when they started selling the Beetle in North America. We mocked the Beetle too, and their ad campaign was built on that. All they need is the right advertising campaign to take the stigma off owning one.Would American consumers buy a car that has the same name as their local Chinese take-out restaurant? Would they upgrade to the BM, STD, FU or PU packages?
Right now people mock the Smart car as well, but people are buying those too. We used to say Kias were terrible cars, but a lot of people buy those too.
There may be a big market for a cheap disposable car... A lot of people drive junk cars anyway that aren't worth much more than these companies will be charging for something new.
I can see it now... a cross between the 500 and the Aztek.. yeah I'd buy that!
Actually I like the 500. Sure its uninspiring, but a giant car that gets 30 mpg on the road is just what my 6'5" frame needs! The trunk space is awsome on this car.
We hope for better things; it will arise from the ashes - Fr Gabriel Richard 1805
Not true!!! The Toyota Camry is considered a domestically built vehicle since more than 75% of its parts are made in the USA. Conversely the Ford Mustang and the Chevy Suburban contain 65% of America made parts. Chrysler's popular 300 is made in Canada.
The OEM manufacturers are becoming much more integrated. Companies like Denso, Toyo Riko (sp), Eaton, Lear, etc all supply Toyota and the other Japanese car manufacturers. Even Delphi makes parts for the Japanese car companies. Denso which makes HVAC systems is 20% owned by Toyota but makes HVAC systems for the Big 3 and the Japanese companies.
GM and Ford's problem is not Toyota, Honda or Nissan but their failure to make cars that people want to buy
"If you don't like change, you're going to like irrelevance even less" General Eric Shinseki
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