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Car Forum / Driving, Maintenance, Tuning / General Car Topics / June 2007

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Ford - circling the drain

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FA - 29 May 2007 23:27 GMT
When Ford CEO Alan Mulally was reviewing the company's 2008 product
line last September...he was told that Ford loses close to $3,000 every
time a customer buys a Focus compact http://doiop.com/Focus - "Why
haven't you figured out a way to make a profit?" he asked. Executives
explained that Ford needed the high sales volume to maintain the
company's CAFE, or corporate average fuel economy, rating and that the
plant that makes the car is a high-cost UAW factory in Michigan.
"That's not what I asked," he shot back. "I want to know why no one
figured out a way to build this car at a profit, whether it has to be
built in Michigan or China or India, if that's what it takes." Nobody
had a good answer.
==========
Business Week article: http://doiop.com/b0a240
Ted Mittelstaedt - 30 May 2007 08:16 GMT
> When Ford CEO Alan Mulally was reviewing the company's 2008 product
> line last September...he was told that Ford loses close to $3,000 every
[quoted text clipped - 7 lines]
> built in Michigan or China or India, if that's what it takes." Nobody
> had a good answer.

The answer is simple - the executives simply don't want to build them.
The Focus isn't an exciting car.  Nobody ever made a name for themselves
in car history by building econoboxes.

Ted
Picasso - 30 May 2007 10:12 GMT
>> When Ford CEO Alan Mulally was reviewing the company's 2008 product
>> line last September...he was told that Ford loses close to $3,000 every
[quoted text clipped - 13 lines]
>
> Ted

No...honda never stayed in business building econoboxes... or toyota...
Not nearly as exciting as a Javelin.

Econoboxes should be the bread and butter.  Not half tons.
Mike Hunter - 01 Jun 2007 01:15 GMT
I guess you never heard of the Ford model "T"   LOL

mike

>> When Ford CEO Alan Mulally was reviewing the company's 2008 product
>> line last September...he was told that Ford loses close to $3,000 every
[quoted text clipped - 13 lines]
>
> Ted
Mike Hunter - 01 Jun 2007 01:14 GMT
First off I don't believe that to be true.  It is the costs of doing
business in the US, not the build costs that are hurting all American
corporations, not just auto manufactures.

It costs Ford less than $9,000 to build a car, the size of a Focus, that
sells to a dealer for around $13,000.  But it is true, like most every
manufacturer, they need the sales weighted small cars for CAFE to be able to
sell the big cars and trucks that earn the big bucks for the corporation.
The Town Car costs around $19,000 to build and sells to a dealer for around
$37,000

Even if is true Ford needs to do what Toyota does, set up a Japanese
corporation to avoid US Corporate income taxes, get most of their the raw
material and most of the parts made in lower wage counties, that have far
fewer government regulations, then assemble the cars in American plant with
worker who are paid less, get fewer benefits and pay the majority of the
costs for their own health care and pension plans so they can say the cars
are made in America or better yet, simply import most of what they sell in
the US as does Toyota.   ;)

mike

> When Ford CEO Alan Mulally was reviewing the company's 2008 product
> line last September...he was told that Ford loses close to $3,000 every
[quoted text clipped - 9 lines]
> ==========
> Business Week article: http://doiop.com/b0a240
FA - 01 Jun 2007 05:34 GMT
> ==========
> Business Week article: http://doiop.com/b0a240

Bloomberg http://doiop.com/hij61l

Toyota Motor Corp. probably moved closer...to ending Ford Motor Co.'s
76-year reign as the second-biggest seller of automobiles in the U.S.

Ford's sales may have dropped in May for a seventh straight month and
Toyota's probably rose, analysts surveyed by Bloomberg said. Through
April, Ford's lead in U.S. sales had narrowed to 50,242 vehicles from
232,922 after the first four months last year.

"I don't think there's much debate that Toyota will overtake Ford" in
the U.S., Dennis Virag, president of Automotive Consulting Group in Ann
Arbor, Michigan, said in an interview. "You won't have to wait very
long for that."

Ford has been No. 2 in the U.S. behind General Motors Corp. since
1931...
 
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