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Ford's (F) ability to avert bankruptcy and its recovery are due to its "One Ford" strategy in...

Ford's (F) ability to avert bankruptcy and its recovery are due to its "One Ford" strategy in which it sells the same products globally. However, the policy has had mixed success in China, where GM and VW dominate by selling cars that cater to local tastes. One problem is that Ford's cars are expensive, although the company is developing a "Value B" sub-$10,000 compact. Still, Ford's David Schoch worries that the company isn't moving fast enough.
Comments (28)
  • DR.G
    , contributor
    Comments (89) | Send Message
     
    Alan is moving at just the right pace, you don't fix decades of mistakes over night and he is working on a long term strategy which other could learn from!
    22 Nov 2012, 07:02 AM Reply Like
  • Tdot
    , contributor
    Comments (3478) | Send Message
     
    It should be noted that "local tastes" in China include all things American. GM sells US-designed Buicks and Cadillacs in China for the wealthy (and they just love them), right alongside the sub-$10k "B segment" vehicles for the common folk, developed both in-market and elsewhere. It is a virtual echo of the inherent contradictions of Free Market Wealth thriving within a supposedly "classless" Communist society.

     

    Anyway Ford's global product development centers are not just entrenched in Dearborn Michigan, working with blinders on and forcing American tastes on the Asians; they are also in Europe, Mexico, South America, and yes even in India and China. The global expertise is highly diverse, and they know a thing or two about what the local folks want, although they certainly have some catching up to do in terms of production capacity.

     

    It is not about selling "the same products globally". Ford has reduced the number of Platforms, but not the number of Products, per se.

     

    As an example, while Ford discontinued the very outdated American Ranger platform, which also underpinned the Bronco II and then the original Explorer over 20 years ago, the new "Global" Ranger (not available in the US) is much more suited to folks in South America, Asia, Australia, Africa, etc.; rather than the US F-Series or the old Ranger.

     

    Ford also sells a wonderful B-Max minivan and EcoSport utility (based on the B-segment Fiesta) abroad, whereas the US gets the slightly larger, but similar looking, Focus-based C-Segment C-Max and Escape. The even larger C/D-segment Fusion/Mondeo-based S-Max, Edge, and Galaxy vans, wagons, and utilities are yet to be shown, and of course the D-segment Taurus-based Flex and Explorer are out there. The Mustang remains on its own unique specialty platform, and the F-Series and Expedition share a truck platform.

     

    Ford has reduced the Platforms from around 20 globally, to something like 8 now, and the goal is to get down to around 6. Two unique platforms were "let go" in just the last year or so: the Ranger and the Crown Vic. But at the same time, the number of unique bodies on each of the remaining platforms is dramatically increasing, more than doubling.
    22 Nov 2012, 07:43 AM Reply Like
  • Ryandan
    , contributor
    Comments (1408) | Send Message
     
    Hey guys, take the day - have a turkey........... ;-)
    22 Nov 2012, 07:48 AM Reply Like
  • alytor
    , contributor
    Comment (1) | Send Message
     
    Ford in or near Bankruptcy? You are full of beans. Is that a White House talking point? What about the 60 Billion of taxpayer money still in GM and that the President facilitated the sale of Chrysler from a German Company to an Italian Company? Go pick on some other company and eat Turkey not Beans.
    22 Nov 2012, 10:24 AM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (525) | Send Message
     
    Alytor

     

    The sale from Daimler to Cerberus happened long before the bankruptcy.

     

    It appears you have not done your homework.

     

    Ford took $5.9B and has yet to have paid back a cent

     

    http://onforb.es/POf2oi
    22 Nov 2012, 03:44 PM Reply Like
  • Tdot
    , contributor
    Comments (3478) | Send Message
     
    1980

     

    "Ford took $5.9B and has yet to have paid back a cent"

     

    False. According to the 3Q12 SEC 10Q Report, Ford made a $148M installment payment in September on the DOE loans, and another $591 is due by next September.

     

    http://bit.ly/Qe5NiN

     

    "It appears you have not done your homework."

     

    The difference between Ford and GM/Chrysler is that Ford will pay back every cent of the $5.9B owed to the taxpayers, plus considerable interest, while GM/Chrysler will leave the taxpayers holding the bag for many billions in unpaid pre-bankruptcy loans, along with shares that are worth about a third of what they need to be to just break even on that portion of the bailout.
    23 Nov 2012, 02:31 AM Reply Like
  • grateful908
    , contributor
    Comments (37) | Send Message
     
    Gentlemen, Have some Bailey's with your morning coffee. Start getting primed for football and a big meal. Forget about Ford for today. Ford is doing all the right things. They will be allright. As the Grateful Dead sing, " A little bit Furthur, just a little bit more, A little bit Furthur than you've gone before." HAPPY THANKSGIVING ALL !!!! ( and don't forget to bring that plate of food to the neighbor you know is all alone today- they'll appreciate it, and God will love you for it !!!! )
    22 Nov 2012, 10:50 AM Reply Like
  • TAS
    , contributor
    Comments (2007) | Send Message
     
    I bought a new vehicle last month and spent lots of time researching and test driving cross-overs and lower priced "luxury" sedans,

     

    I ended up being sold on the 2013 Hyundai Sport. I think Ford has come a long way, but the new Escape is not quite spacious enough and the Taurus/Focus/Lincoln collection are nice, but in not comparable to the Hyundai Genesis.

     

    The GM products were lackluster at my price point. Chrysler/Fiat/Jeep was styled a bit better, but I have always had problems with the reliability, fit and finish on that brand.
    Just my opinion. And no reason to buy any securities of the above.
    22 Nov 2012, 12:36 PM Reply Like
  • Harry Piels
    , contributor
    Comments (109) | Send Message
     
    Per a leading consumer magazine, Ford's reliability has slipped recently. Dependability is a big reason Japanese auto makers have captured a large share of the American market for decades. Seems like Ford owes it to themselves to correct this flaw and resurrect an old theme with quality being "job one."
    22 Nov 2012, 10:31 PM Reply Like
  • Tony Pow
    , contributor
    Comments (5564) | Send Message
     
    Obama declared 'victory' of saving the second GM. Without China, GM could have been bankrupted again with the bailout money evaporated.
    22 Nov 2012, 03:52 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    how did the bailout money or Cn Rmb profits come from Cn --> USA or was it an all or partial equity deal?
    22 Nov 2012, 04:32 PM Reply Like
  • Tony Pow
    , contributor
    Comments (5564) | Send Message
     
    Without the profits from China, GM should have been bankrupted the second time (the original GM stock is virtually gone) and the bailout money which depends on the new GM stocks could have lost too. Volt, GM's electric car, drove GM to the brink of bankruptcy.
    22 Nov 2012, 04:58 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    What I am trying to figure out Tony is how such a large sum of RMB was brought over and converted to US$ in consideration of the limited convertability of the RMB and the taxation of such a large cash flow into the USA.0

     

    So were the profits realized in Detroit because GM Cn is a joint venture primarily between GM and SAIC (Shanghai Automotive Industry Corporation) a separate corporate identity.
    22 Nov 2012, 08:23 PM Reply Like
  • Tony Pow
    , contributor
    Comments (5564) | Send Message
     
    Sam, Good point. I have friends facing same problem trying to move the profit made in China back to USA. They're small fishes, so it is not that tough. I know two who owned shares of two famous internet stocks. One participated in IPO in USA, so he owned US stocks and another one could have given up US citizenship as he lives in SH for a long while.

     

    Whether you can bring the profit back may not be important in the short term as long as it is recorded in the global financial statement and this is what the stock investors look for. GM USA has not been doing good, but China's joint venture is.
    23 Nov 2012, 09:27 AM Reply Like
  • jvin248
    , contributor
    Comments (3) | Send Message
     
    Ford was "fortunate" that they went to the debt window before it shut. Otherwise they would have been in the same situation GM and Chrysler found themselves in a month or two later when the financial meltdown happened. By being short of cash earlier (ie worse working capital shape) they lucked out. It' not that they have "one platform". Are they doing some good logical things in general? Yes. But not any magic at the beginning of the recession.
    22 Nov 2012, 05:45 PM Reply Like
  • Tdot
    , contributor
    Comments (3478) | Send Message
     
    True dat.

     

    Both Alan Mulally and Bill Ford freely admit that they were really lucky to have closed on that $23.5B "home improvement loan" (to go along with the $5.9B DOE fuel efficiency loan), shortly before the banks and commercial lenders started collapsing under the weight of bad sub-prime mortgages.

     

    GM and Chrysler may have both been just fine if they had done the same thing in the same time frame.

     

    By the way - Ford has paid off that $23.5B bank debt, with interest.
    23 Nov 2012, 03:31 AM Reply Like
  • moran
    , contributor
    Comments (214) | Send Message
     
    I CAN'T UNDERSTAND WHY MOST REPUBLICANS THINK THE US AUTO COMPANIES SHOULD GO OUT OF BUSINESS.......DOESN'T MAKE SENSE. I AGREE THERE ARE A BUNCH OF GREAT FOREIGN CARS OUT THER BUT NO NICER OR BETTER THAN DOMESTIC BRANDS. THEREFORE, I PERSONALLY WILL NEVER USE ANY REASON TO BUY ANYTHING BUT DOMESTIC. BY THE WAY, I AM NOT IN ANY UNION NOR AM I DEMOCRAT OR REPUBLICAN. I DO BELIEVE IN AMERICA AND AMERICAN PRODUCTS, THAT IS WHAT PRODUCTS ARE STILL AMERICAN. hAPPY THANKSGIVING.
    22 Nov 2012, 05:45 PM Reply Like
  • nfultz1
    , contributor
    Comments (67) | Send Message
     
    I'm not sure where you get that most Republicans want the US auto companies to go out of business. Obviously Republicans want US companies to succeed. Many Republican leaders favored a structured bankruptcy for GM versus a bailout/bankruptcy. In a bankruptcy debt is exchanged for equity and the current shareholders are usually wiped out. The business continues to exist.

     

    What the Democrats did, right or wrong, was to ensure that one particular union kept their pensions, but many other unions that represented thousands of employees were wiped out. I'm not sure that it was any more favorable either way since the money was taken from bond holders in order to fund the Union bailout. Bond holders might seem like a wealthy class, but they also represent retirement accounts of millions of Americans.
    22 Nov 2012, 06:47 PM Reply Like
  • Tdot
    , contributor
    Comments (3478) | Send Message
     
    Most Republicans did not "think the US auto companies should go out of business". Some wild-eyed crazies and lib'rals maybe wanted to see GM and Chrysler "punished" for producing what they thought of as crappy vehicles and gas guzzling behemoth SUVs and other trucks, rather than imitation Priuses and Insights.

     

    Republicans, including Romney, thought the US auto companies should go through a proper legal bankruptcy, should the direct emergency TARP loans, and any hypothetical subsequent indirect government-backed commercial loans, could not result in the businesses continuing as Going Concerns.

     

    GM and Chrysler only wanted simple access to commercial loans (such as Ford received), except backed with government guarantees, to tide them over through the Great Recession, giving them time to restructure and return to profitability. Nothing unusual there.

     

    GM and Chrysler even attempted to merge with Ford as a sort of New American Motors Company. But Ford wanted no part of that unless the government was going to guarantee billions more in commercial loans with substantially all the GM and Chrysler assets as security, and unless the government would allow Ford to take full charge in managing the businesses, and to quickly restructure and resize the US automotive production base as needed to return the conglomerate to profitability, with the prospect of spinning off redundant brands later.

     

    But that was unacceptable to The Regime. Instead, The Regime unjustly fired the CEOs (two at GM), forced the businesses against their wishes into an unprecedented "quick-rinse" bankruptcy where previous debt holders and shareholders lost everything, and sold Chrysler out to Fiat on the cheap.

     

    And Chrysler profits are now bailing out Fiat in Europe, rather than profiting American shareholders.

     

    Unfortunately for them, the Republican politicians (especially Romney and the usual talking heads) were unable to properly elucidate and explain their Party's position, and the proper Conservative (and Tea Party) platforms, in dealing with a de-facto bankrupt GM and Chrysler in a proper Free Market Capital economy; and they paid dearly for it (and still do).
    23 Nov 2012, 03:02 AM Reply Like
  • Ryandan
    , contributor
    Comments (1408) | Send Message
     
    Tdot, you standing in front of a store waiting for a "black" sale? I didn't know we still had a 3:02 AM.

     

    Well, I hope you had a nice holiday, and have a nice weekend and maybe next week we can get Ford moving in the right direction. I'll turn my charts upside down and you keep giving us the numbers - something has got to work!
    23 Nov 2012, 09:49 AM Reply Like
  • moran
    , contributor
    Comments (214) | Send Message
     
    It's quite obvious that the majority of folks on this site are Republicans. It's also quite obvious that no matter the situation, there will never be a Democrat or Republican just simply tell it like it is. Just what the heck is a "structured" bankruptcy? Does it determine who will win and who will lose?
    25 Nov 2012, 01:49 PM Reply Like
  • Engineer&Far
    , contributor
    Comments (106) | Send Message
     
    My memory is that commercial capital was probably not available to support a structured bankruptcy for GM, when it was needed. I agree that the government picked winners & losers in their bailout, with Unions favored over both bond holders and white collar folks (Delphi, etc). But, myself and a whole lot of folks in the Midwest didn't believe the Romney claim that a structured bankruptcy would have worked just as well.
    27 Nov 2012, 09:07 AM Reply Like
  • Tdot
    , contributor
    Comments (3478) | Send Message
     
    That's true - the commercial banks were holding on to their remaining money pretty tightly, after losing hundreds of billions in bad mortgages and other sub-prime debts, to questionable businesses and individuals in terms of credit-worthiness. Which is why the nation slipped into the Great Recession in the first place.

     

    But the US Treasury pumped hundreds of billions of TARP dollars into the banks, along with QE and QE2, with the intention of freeing up credit for "worthy" businesses like GM and Chrysler.

     

    The Government and the Fed could have easily backed, guaranteed, and provided the funds for a few tens of billions in short to medium term loans to GM and Chrysler, through a consortium of lenders, at low rates. Which would have provided GM and Chrysler with emergency financing in lieu of the ghastly quick rinse bankruptcy, where shareholders and certain disfavored stakeholders were left with nothing, and the taxpayers were left with tens of billions in permanent losses for GM and Chrysler loans that predated bankruptcy (and the potential losses in the remaining Treasury-owned shares).

     

    Government-backed commercial loans under TARP should have given GM and Chrysler sufficient operating funds to weather the recession and return to profitability, just as Ford did, with only a small advantage over Ford's loans which were without government backing, but rather secured by the "Blue Oval" itself, along with substantially all assets and shares.
    27 Nov 2012, 10:03 AM Reply Like
  • Ryandan
    , contributor
    Comments (1408) | Send Message
     
    I think the American public could have salvaged something from the GM deal after all they got a lot of stock, they forced union wages down to a more competitive level, and they replaced some useless managers and board members. Unfortunately the company is now being run exactly like it was before - with a lot of stupid people doing the same stupid things that put them in a hole in the first place.

     

    The Big C is doing well - of course they got some offshore management that obviously knows how to run a car company.

     

    ""Ford did, with only a small advantage over Ford's loans which were without government backing, but rather secured by the "Blue Oval" itself, along with substantially all assets and shares.""

     

    You can always tell who took "Creative Writing" and did well in it. Ford would have taken the bailout, but it had already used every nut and bolt it owned to secure loans from the banks just before the fall. There were no assets left to pledge or offer up for a bailout. You take the assets again you crushed the banks.

     

    Ford took money to retool and redesign and from my perspective they did a nice job. But they have the same people building the cars they had before. Show me a union who makes the first order of business building better products instead of selfish gain and I'll show you a union that doesn't exist here in the states.
    28 Nov 2012, 09:58 AM Reply Like
  • moran
    , contributor
    Comments (214) | Send Message
     
    Why do you always do the blame game? Did you not read Tdot's comments? One moment you are blaming lousy management and the next, it's those lousy over paid union guys..Or the dang libies, or that lousy president. It's easy to start blaming, but kind of tough to look at the entire picture and come up with viable solutions.
    2 Dec 2012, 12:16 PM Reply Like
  • Ryandan
    , contributor
    Comments (1408) | Send Message
     
    Hey I like Tdot - we disagree but he's more than a worthy opponent.

     

    I'm just a guy who likes to put his blunt opinion on the table. And if I point out a number of problems, as I see them, maybe my frustrated negative observations are correct.

     

    Every time Ford comes out with good news on Monday you can expect bad news on Friday. That's not my problem it's theirs. See the latest recall announcement from Ford over the weekend. Yeah, now we got cars that are catching fire. I better sell me Pinto.

     

    And I was listening to the theme song from Dr. No when I read your reply - now is that ironic or what?
    3 Dec 2012, 08:51 AM Reply Like
  • moran
    , contributor
    Comments (214) | Send Message
     
    See what I mean, more idiotic bs.....And as far as being a worthy opponent...if that's your mission, forget it with Tdot.
    3 Dec 2012, 04:28 PM Reply Like
  • Ryandan
    , contributor
    Comments (1408) | Send Message
     
    Looks like I'm going to be dragging you around like a wet blanket. At least you'll learn something..........

     

    When you get a chance add something of value... ;-)
    4 Dec 2012, 08:44 AM Reply Like
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