Mark Gregory

Ford is all but getting out of the Car Business

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Just had email from a friend who is a big Ford fan on this.  I think it comes down to demand and market share.  They can transfer populRity of Ford trucks into suv and crossover its a smart move.  Tougher, I think to sell sedans, most buyers go import on them.  

 

 

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This brings to mind a bumper sticker I saw 20 years ago:

"Out of work? Hungry?

Eat your import!"

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3 hours ago, Mark Gregory said:

Never thought I would ever read a Headline like this in my lifetime . Here in Oakville , Ontario there is a huge plant which probably will be affected ?

 

Once again a headline designed to confuse and shock people.  What Ford is doing over the next several years is shifting production from regular sedans to CUVs (crossover utility vehicles) which are defined as having a unit-body car-like platform but with a taller utility style body (easy entry and exit) and usually all wheel drive.  Popularity of these has been growing for years as has profitability, and the popular Ford Edge CUV is (I think) made at the Oakville plant along with their Lincoln MKX variant.  Essentially this transition away from sedans has been happening for several years by popular demand and already happened at Chrysler who permanently eliminated all sedans smaller than their Challenger/Charger/300 in a similar move.  That said I disagree with the move and think ignoring sedans will hurt them down the road, Todd C       

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Yes, because I'm just positive gas will always be this cheap and will never, ever cost $5/gallon ever again. People will always want big, thirsty trucks. Great idea, let's bet the farm on that!

 

Bye Ford. Join Chrysler on the ash heap of history when your short-sightedness and inability to see past this quarter's profit statements burn you to the ground. It won't be tomorrow, and it may not even be soon, but it will surely happen. And everyone will stand around shrugging their shoulders wondering how this happened, how could we possibly have seen this coming?

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"Buddy, can you spare a dime?" Take your company public and you think the stockholder is your customer.

image.png.a6cd9f587e817e7cc0bab8f7eb9871cd.png

 

Last time I looked at a Ford they were unloading an odd little truck. And the window sticker showed it was a product of Turkey.

 

Most corporations begin to die 30 to 40 years after the death of the founder. I'd say they did pretty good.

Bernie

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4 minutes ago, Matt Harwood said:

I'm just positive gas will always be this cheap and will never, ever cost $5/gallon ever again.

 

Nudging $5 per gallon is where personal conservation kicks in. Of course, that $5 includes taxes, a big percentage. And people really do reduce cash flow to both the oil companies and the tax bin at that point.

 

The 3 major petroleum exporters in the world are Saudi Arabia, Russia, and the United States. You'd think "being held hostage by foreign oil cartels" we'd keep a little at home. Maybe hostage is a metaphor. Got me.

 

At one point I worked in a power plant when natural gas allotments were being enforced (rationed). We had dual fuel burners and switched to 100% oil. I think we burned oil for about three weeks and they found all the natural gas we needed.

 

Always remember, Indians never threw any tea into Boston harbor and pay no attention to the man behind the curtain.

Bernie 

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Like i told my ford buddy, if you sell burgers & hot dogs, but 99% of your customers want only burgers, your likely done making hot dogs.

 

CUV is a car to most anyway.  I suspect, from younger, non historically minded perspectives, actually more attractive and youthful than sedans to many.  Madison avenue has more influence than auto history with a younger demographic.

 

You will still be able to get a Lincoln at least!

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2 minutes ago, 60FlatTop said:

 

Nudging $5 per gallon is where personal conservation kicks in. Of course, that $5 includes taxes, a big percentage. And people really do reduce cash flow to both the oil companies and the tax bin at that point.

 

Actually, the federal gasoline tax is currently 18.4 cents per gallon. State taxes make up the rest, ranging from a low of 23.5 cents to a high of 26.54 cents, depending on the state. The federal gas tax was last raised in 1993.

 

 If gas prices go up, taxes become a smaller and percentage of the overall cost to consumers. 

 

If gas goes to $5/gallon (nobody remembers 2006-2008?), even repealing ALL the gas taxes won't save Ford and their big trucks.

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23 minutes ago, Steve_Mack_CT said:

Like i told my ford buddy, if you sell burgers & hot dogs, but 99% of your customers want only burgers, your likely done making hot dogs.

 

CUV is a car to most anyway.  I suspect, from younger, non historically minded perspectives, actually more attractive and youthful than sedans to many.  Madison avenue has more influence than auto history with a younger demographic.

 

Actually getting a CUV rather than a sedan is most popular of all with mature buyers.  Comparing the two the higher seating makes for easier entry and exit and older folks prefer that and have the money to pay extra to get the bigger vehicle. 

 

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I think its what others said here, they are changing their product line. Out with old models no being profitable or that they see soon being not profitable and in with new lines-hybrids? Electric? smaller cars?  Who knows.

 

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Sounds like a real shame. After all, Ford was starting to make some good looking cars again., such as the Taurus and Fusion. I'm holding on to my '01 Crown Vic as long as I can.

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I won't miss the sedans much  however as others have suggested Ford is possibly making a big misstep axing all the small gas sipping compacts and hatchbacks. I was raised with MG ,Triumph , .....Alfa and Lotus when I could afford it. I just don't get why all the soccer moms want to imitate Bus drivers with the current "tall" crop of transport.

  My daily driver is a Accent 5 speed 2 door hatchback, roughly 35MPG. It isn't fancy however I can afford to feed it  Gas in my area is currently about $2.60 Canadian  a Litre( about $4.70 US. / US gallon} , the highest in North America. People around here are thinking about bus passes, electric scooters and bicycles.  Except for truly wealthy people if this keeps up no one around here is going to be buying a SUV, Crossover or pickup. My brother in law bought a new Ford pickup last year. It's currently parked and he just bought a Focus. He would sell the truck but no one around here will touch it. His monthly gas bill was hitting $800.00.

 

Greg in Canada

Edited by 1912Staver (see edit history)

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Quote

Last time I looked at a Ford they were unloading an odd little truck. And the window sticker showed it was a product of Turkey.

They build em in Spain now. But the Transit Connect has at least always been built by Ford, it's not just some other brands vehicle rebadged a la Chevy

When I was in the industry no one ever asked for a Taurus that I can remember, and Fusions were generally for old people. The old saying, you can sell a young car to old people but not an old car to young people. Personally I don't care for that outcome as an owner of a Fiesta, and someone who likes luxury without all the technology, but Ford probably only made a few bucks on me and my crank window manual Fiesta....

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They have got  to go with what sells.  If economy sells again, then they will start making more cars again.  Ford still did not declare bankruptcy and that is still a positive in my book.

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49 minutes ago, nickelroadster said:

They have got  to go with what sells.  If economy sells again, then they will start making more cars again.  Ford still did not declare bankruptcy and that is still a positive in my book.

 

Ford was merely in the right place at the right time in 2007, taking out huge loans before banks stopped making those huge loans. It wasn't because they were smarter or healthier, they just started borrowing before the others and therefore were able to secure capital. By the time GM and Chrysler tried to do the same, lending and capital loans had dried up because of the housing crisis and financial system crash, hence the bankruptcies and bailout (which, by the way, has been paid back with interest). Ford wasn't smarter, they weren't in better financial shape, they didn't have better product, they didn't have more pride, they just got lucky that they started the borrowing process a few months earlier than everyone else. They borrowed just as much, merely from different sources.

 

The problem with making economy cars only when there's demand is lead time. Even in today's world of fast prototyping, it's still 24-36 months to get a new product to market, depending on tooling time. Things will go to hell a lot faster than that, leaving Ford and Chrysler with showrooms full of giant trucks and V8 muscle cars and nothing to sell. They won't be able to borrow three years' worth of operating expenses to keep the lights on until they can literally rush something through the development process. And even if they manage to do so, how good a product do you recon it'll be at that point?

 

Toyota and Honda are thinking about what they're going to be doing in 2030. They have always taken the long view, which is why they often seem late to the party (see: big trucks and V8 luxury cars) but it's also why they are not left flat-footed when things go to pieces. Americans just can't seem to figure out how to plan past end-of-month bonuses and getting shareholders paid this quarter. And THAT is what will finally kill the domestic auto industry--their own short-sightedness and assuming that the way things are today is how they always will be. It nearly killed them in the 1970s, it will polish them off in the 2020s.

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5 hours ago, Matt Harwood said:

 

Actually, the federal gasoline tax is currently 18.4 cents per gallon. State taxes make up the rest, ranging from a low of 23.5 cents to a high of 26.54 cents, depending on the state. The federal gas tax was last raised in 1993.

 

 If gas prices go up, taxes become a smaller and percentage of the overall cost to consumers. 

 

If gas goes to $5/gallon (nobody remembers 2006-2008?), even repealing ALL the gas taxes won't save Ford and their big trucks.

 

FYI, here in Pennsylvania the state gasoline tax is 58.3 cents/gallon. Add in the Federal tax at 18.4 cents/gallon and Pennsylvania wins the award for the highest gas taxes in the USA at 76.7 cents/gallon. Hopefully at some point in the not too distant future all of the states and  the federal government come up with a plan to replace the state & federal gas tax per gallon with a different tax that makes sure that ALL vehicles including electric vehicles and electric tractor trailers pay their fair share to use the roads. 

 

 

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Quote

Actually, the federal gasoline tax is currently 18.4 cents per gallon. State taxes make up the rest, ranging from a low of 23.5 cents to a high of 26.54 cents, depending on the state. The federal gas tax was last raised in 1993.

Time for a fact check :

State taxes
State Gasoline tax (excludes federal tax of 18.4¢/gal) Diesel tax (excludes federal tax of 24.4¢/gal)
Oregon 31.12 30.36
Pennsylvania 58.20 74.70
Rhode Island 34.00 34.00
South Carolina 16.75 16.75

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I'm surprised they don't keep one model of sedan and see if it picks up any sales before terminating it. 

 

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@Matt one real factor w Ford is the family stocks. Going bankrupt would end Ford family control. I agree they got lucky w their finance situation but there is a family wealth and pride still attached to Ford that few other large American companies can claim and that was a factor from what accounts I've read.

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15 hours ago, poci1957 said:

 

Once again a headline designed to confuse and shock people.  What Ford is doing over the next several years is shifting production from regular sedans to CUVs (crossover utility vehicles) which are defined as having a unit-body car-like platform but with a taller utility style body (easy entry and exit) and usually all wheel drive.  Popularity of these has been growing for years as has profitability, and the popular Ford Edge CUV is (I think) made at the Oakville plant along with their Lincoln MKX variant.  Essentially this transition away from sedans has been happening for several years by popular demand and already happened at Chrysler who permanently eliminated all sedans smaller than their Challenger/Charger/300 in a similar move.  That said I disagree with the move and think ignoring sedans will hurt them down the road, Todd C       

 

I've been an SUV fan for the duration of our kids lives.  I got used to geting into a vehicle rather than falling into a vehicle that's sitting on the ground.  Once the kids grew out of the house I converted to a pickup, again for the same reason, getting out of a vehicle rather than picking myself up off the ground was preferred.  This nasty hobby of hauling dirty car parts also required the pickup.  Now that the limberness of youth has begun fleeting, my wife has also begun to appreciate a vehicle that sits higher.  Let's call it ADA for anyone over the over 40 crowd.  On top of that, I'll prefer to sit in a car that sits higher and drive 8 hours rather than fly in a seat that the airlines designed to accomodate a 12 year old sized body.

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16 hours ago, poci1957 said:

 

Once again a headline designed to confuse and shock people.  What Ford is doing over the next several years is shifting production from regular sedans to CUVs (crossover utility vehicles) which are defined as having a unit-body car-like platform but with a taller utility style body (easy entry and exit) and usually all wheel drive.  Popularity of these has been growing for years as has profitability, and the popular Ford Edge CUV is (I think) made at the Oakville plant along with their Lincoln MKX variant.  Essentially this transition away from sedans has been happening for several years by popular demand and already happened at Chrysler who permanently eliminated all sedans smaller than their Challenger/Charger/300 in a similar move.  That said I disagree with the move and think ignoring sedans will hurt them down the road, Todd C       

I feel it is a right move for Ford at this time.  The market has changed since the early 1990's when passenger cars were the norm. As of late, SUV's and light trucks command something like 63% of the market, and passenger cars only 37% of the market. Ford is still #1 with the F-series trucks.  The profit margin on passenger cars is very thin on economy models (as BMC/British Leyland found out), compared to X-overs and SUV's which have a much higher return on investment for the automakers.  Therefore, I can see Ford's reasoning over that decision.  Perhaps the reason people prefer taller vehicles is because their kids are now taller?


The SUV market is obviously too lucrative to be ignored by automakers who one would never expect to offer one, specifically, exotic/super-luxury car manufacturers, including Bentley, Maserati, Lamborghini, (although they did offer the LM002 much earlier.), and shortly, Rolls Royce.

Craig

Edited by 8E45E (see edit history)

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Since '72 I've always had at least one vehicle that has a hatch/tailgate (though have never had a pickup). Tastes change and the "hot hatches" are very popular today, besides having something that can be either a four seater or a two seater with a lot of luggage space makes sense, just comes in different sizes now and range from tiny to gigantic. I suspect the final straw is that a four door is more expensive to make than a two door.

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$0.62 tax per gallon here in Monroe County, New York State. Years ago we had signs on the pump that itemized the fuel cost and taxes. It is illegal, in the state, to post such a sign today.

I wonder what inspired that law and who it protects.

 

Actually, I would be in favor of the Supreme Court opening an investigation to find out who is responsible for taking the word "conniver" out of common use in the language. There are just so many instances where it is the most appropriate word, but appears to be suppressed.

 

Bernie

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