Ford Cutting Own Throat

[Nbadan]

DEARBORN, Mich. — Ford Motor Co., the nation's second-largest automaker, said today that it will cut 25,000 to 30,000 jobs and idle 14 facilities by 2012 as part of a restructuring designed to reverse a $1.6 billion loss last year in its North American operations.

The No. 2 U.S. automaker has been hurt by falling sales of its profitable sport utility vehicles, growing health care and materials costs and labor contracts that have limited its ability to close plants and cut jobs. The United Auto Workers union will have to agree to some of the changes Ford wants to make

LA Times (http://www.latimes.com/business/la-012306ford_wr,0,236674.story?coll=la-home-headlines)

More:


Ford Motor Co., the nation's second-largest automaker, said Monday that it will cut 25,000 to 30,000 jobs and idle 14 facilities by 2012 as part of a restructuring designed to reverse a $1.6 billion loss last year in its North American operations

...

Ford shares rose 68 cents, or 8.6 percent, to $8.58 in morning trading on the New York Stock Exchange.

Wasn't it FORD management that was beating the bigger and badder SUV war drum until it drove the company into the ground and ignoring hybrids? No doubt that the Rush Limpballs, Insanity and the rest of the right-wing spin of the world are busy parroting the same tired propaganda of 'blame the unions' for the short-comings of proper forcasting by management.

So, who pays? Certainly not those most responsible for this fiasco.

[xrayzebra]

Oh, now it is Rush's fault. Damn, does Bush know this? I have a tin can with
a big, big rubber band in it that I will sell you. I call it a HI-Bred. Oh, nevermind,
you would want a warranty.

[Extra Stout]

LA Times (http://www.latimes.com/business/la-012306ford_wr,0,236674.story?coll=la-home-headlines)

More:

Wasn't it FORD management that was beating the bigger and badder SUV war drum until it drove the company into the ground and ignoring hybrids? No doubt that the Rush Limpballs, Insanity and the rest of the right-wing spin of the world are busy parroting the same tired propaganda of 'blame the unions' for the short-comings of proper forcasting by management.

So, who pays? Certainly not those most responsible for this fiasco.

Can't disagree with the basic point, though the Rush/Hannity right-wing-blah slam is irrelevant. I saw this coming years ago. The domestics all were neglecting their passenger cars to go chase the SUV craze. I thought, well that's fine, but what happens when the price of oil inevitably goes up? Don't they plan past next week?

The Japanese had the answer by 2002-03: "A lot of Americans will buy crossovers instead." So Toyota introduced the Highlander, Nissan the Murano, and Honda the Pilot. They reaped the benefits of their foresight. Ford only now is introducing a crossover, and GM's are still a couple of years away, because their first attempt yielded the Edselesque Pontiac Aztek. God, their designers and engineers suck.

Now the imports are thinking, "Gee, if we see $4 gas, lots of people, including youngsters, will want a fuel-sipping B-size car in the cities." So Toyota spits out the entire Scion division plus the Yaris, Nissan the Versa, and Honda the Fit. Give GM some credit; at least they have a rebadged Daewoo to sell as the Chevrolet Aveo. But all Ford has is Mark Fields making promises about what they "will" do. They'll be late to the game again.

Also, does anybody notice that whenever Ford does anything right, it's because Mazda and/or Volvo were involved? I don't know what it is about Americans running the auto industry that makes them the biggest fucking idiots in the world.

Chrysler couldn't successfully execute an ostentatiously American car like the 300 until the Germans were in charge.

The Detroit management culture is irretrievably dysfunctional.

But the union workers are cutting off their noses to spite their face. This strategy won't save their jobs.

[xrayzebra]

^^I think the reason SUV were so popular is because of passenger space, had
they built full size cars instead of the mini-cars they would have sold as many.
I had a 93 Chev Caprice that got 28 miles to the gallon with a V8 engine.
They don't make it anymore. Cadillac builds cars with V8 that get about the
same. What happened to them. I am one who loves the good old American
soft mushy ride, where you don't feel the bumps. Try to find one now days.
Also where you can have a little leg room. You know a car you get into, not
one you put on.

[Extra Stout]

^^I think the reason SUV were so popular is because of passenger space, had
they built full size cars instead of the mini-cars they would have sold as many.
I had a 93 Chev Caprice that got 28 miles to the gallon with a V8 engine.
They don't make it anymore. Cadillac builds cars with V8 that get about the
same. What happened to them. I am one who loves the good old American
soft mushy ride, where you don't feel the bumps. Try to find one now days.
Also where you can have a little leg room. You know a car you get into, not
one you put on.
The point of the crossovers is that they provide the space and the ride height of the big truck-based SUV's in a more efficient package. The competition innovated. Detroit stuck its head in the sand and assumed the good times never would change. This has nothing to do with labor, whatever their ineffiencies and unreasonable demands might be. This was just inept management. They got beat to the punch.

You are correct that the SUV's replaced full-size cars for people who wanted a lot of space. This was created in part by the CAFE rules. Since trucks were exempt, the domestic manufacturers could make a large product that customers wanted without having it count against their fuel efficiency rating.

Your affinity for the old-style American car actually is indicative of the problem. When the average customer is retirement-age, the company has a finite future. Oldsmobile followed its customers into the grave. Buick may be next. Lincoln for all intents and purposes is dead already.

[exstatic]

Almost every large SUV (Suburban,Hummer,Excursion) that I see on the road has one person in it. Space isn't the issue, feeling (but not being) invulnerable is. Unless you are morbidly obese, you should fit into a full sized Honda or Toyota sedan. Their quality and ride puts US built sedans to shame.

[Vashner]

That's a load of bullshit.. "feeling invunerable"..
For one I feel invunerable because I am packing a Sig pistol with laser while on the road. Not because I drive an SUV.

For two that's typical bullshit liberal talking point line. SUV's are a family car... they go back to the covered wagon.

People drive them because they are comfortable and fit the family needs.

[Oh, Gee!!]

That's a load of bullshit.. "feeling invunerable"..
For one I feel invunerable because I am packing a Sig pistol with laser while on the road. Not because I drive an SUV.

all signs points to Vashner compensating for having a little baby dick.

[Guru of Nothing]

I think poor urban planning is joined at the hip to this problem. So many people now spend a large amount of time in their vehicles just living life, associating their personal success with their ride - not realizing that spending so much time in their ride is their own loss. Personally, I love road trip more than your average bear, but I loathe driving around town - not that anyone cares. [/thread hijack]

[Vashner]

They where hooked on the high markup of the SUV.

Every year they jacked the price up 1000 bucks.. over the last 20 years or so..

Hey maybe no one will notice?

[desflood]

Almost every large SUV (Suburban,Hummer,Excursion) that I see on the road has one person in it. Space isn't the issue, feeling (but not being) invulnerable is. Unless you are morbidly obese, you should fit into a full sized Honda or Toyota sedan. Their quality and ride puts US built sedans to shame.
You see them all alone because most of them are parents who just dropped their multiple kids off at school and are on their way to work :lol

[spurster]

Planning beyond short-term seems to be beyond the capability of the vast majority of politicians, businesses, and consumers.

Let's do whatever the hell we can get away with today, and let the shit hit the fan tomorrow. And when that happens, we'll try to convince ourselves and everybody else that it smells good.

[Nbadan]

So why is San Antonio/Bexar County willing to pay to build expensive toll-roads that will benefit few, but not a light rail system connecting Austin-San Antonio that will benefit many? Aren't our own city planners being as short-sighted as FORD management?

[Extra Stout]

Almost every large SUV (Suburban,Hummer,Excursion) that I see on the road has one person in it. Space isn't the issue, feeling (but not being) invulnerable is. Unless you are morbidly obese, you should fit into a full sized Honda or Toyota sedan.
Honda does not actually make a full-size sedan. You probably mean the midsize Accord/Camry/Altima/etc.


Their quality and ride puts US built sedans to shame.
Honda's and Toyota's sedans are US-built.

The Accord is built in Ohio. The Camry and Avalon are built in Kentucky. The Nissan Altima and Maxima are built in Tennessee. The Mazda6 is built in Michigan. The Hyundai Sonata is built in Alabama.

Meanwhile the Chysler 300 and Dodge Charger are built in Canada, while the Ford Fusion is built in Mexico.

[Extra Stout]

So why is San Antonio/Bexar County willing to pay to build expensive toll-roads that will benefit few, but not a light rail system connecting Austin-San Antonio that will benefit many? Aren't our own city planners being as short-sighted as FORD management?
Because the ridership of that light-rail system will never, ever come close to justifying the cost. Light rail is such a waste of money. If a commuter system is needed along that corridor, just add an HOV/bus lane on I-35 between the two cities.

I have yet to see any real advantage of trains over buses. All the one in Houston does is make it more difficult to get around the Medical Center, and cause a lot of accidents.

All the toll roads are doing are substituting user fees for a gas tax that hasn't been keeping up with the cost of roads. At least the poor would have the choice of whether or not to use the toll roads. With the gas tax, they have to pay no matter what.

If you really think that toll roads benefit only the "few," check out the Dallas North Tollway or the Sam Houston Tollway during rush hour.

[Nbadan]

Because the ridership of that light-rail system will never, ever come close to justifying the cost. Light rail is such a waste of money. If a commuter system is needed along that corridor, just add an HOV/bus lane on I-35 between the two cities.

Eh, It's just a matter of changing driving habits and right not, people need motivation to change their driving habits, but don't worry, that motivation will come soon enough in $3-$5 gas if the U.S. and/or Israel attack Iran's nuclear plants.

My thoughts are that we should build for the future, not the past.

[xrayzebra]

Dan, you are typical. Lets just change the American way of life. You don't know
what it is like to live in a world of "public transportation". How many times do
you ride VIA? You don't? How Come? Well the public just needs to learn to live
with "whatever". Light rail is a joke. You want to support those who want
government handouts. Got to Europe where people discovered cars. Yeah,
public transportation exist, but go shopping on the weekend and see how many
are using it to buy their weekly groceries. You are really something else.

By the way, did you go back and look at my link in the other thread. I don't
seem to be able to find your reply.

[Extra Stout]

Eh, It's just a matter of changing driving habits and right not, people need motivation to change their driving habits, but don't worry, that motivation will come soon enough in $3-$5 gas if the U.S. and/or Israel attack Iran's nuclear plants.

My thoughts are that we should build for the future, not the past.

I can't see any forseeable price of transportation, even $8 gas like Britain, justifying a train like that. In the places where it works in the U.S., it works because congestion makes it feasible, not high energy costs.

In Europe, rail travel works because cities are close enough that it is more convenient than air travel, and city centers are so dense that it is difficult to gain access by automobile. For the former, I understand that the relative proximity of SA versus Austin makes the rail an idea. But, their centers of business are scattered all over the two cities. So, either there are trains making multiple stops in each city, which increases either travel time or cost of infrastructure, or both, or people must travel by other means to reach the train station. If they do that, how does it make sense to drive a car or ride a bus 20 miles to the train station, ride 90 miles on the train, then take a bus or taxi 20 miles to one's destination? Who is going to spend three or four hours doing that when the drive takes two hours, even if the drive is more expensive?

And if people are willing to spend four hours on that trip, why not use a small airplane rather than build all this new unnecessary infrastructure? Even in Europe, the budget airlines are taking business away from the Eurorail.

I don't believe that the train is a forward-thinking idea at all. We'd be reverse-engineering an idea from Europe that operates under a totally different set of circumstances.

Our infrastructure is road-based. Our cities are diffuse, except on the East Coast. Buses use the existing infrastructure and do the same job a train does. They are far more flexible than trains. For instances where distances are far enough that the slow speed of automobiles is a drawback, we already have our air infrastructure. Why do we need trains, at least until Texas has 100 million people and it's so congested people can't drive?

[Extra Stout]

Dan, you are typical. Lets just change the American way of life. You don't know
what it is like to live in a world of "public transportation". How many times do
you ride VIA? You don't? How Come? Well the public just needs to learn to live
with "whatever". Light rail is a joke. You want to support those who want
government handouts. Got to Europe where people discovered cars. Yeah,
public transportation exist, but go shopping on the weekend and see how many
are using it to buy their weekly groceries. You are really something else.

By the way, did you go back and look at my link in the other thread. I don't
seem to be able to find your reply.
In Europe, rail is useful for things like business commuting and tourism. You're right that people have their own vehicles for running errands. The difference is that in Europe, with their Middle-Age streets and non-existent parking, people drive these little runabouts like Smart cars, or Peugeot 106's. And yeah, they get like 40 mpg, but they can't keep up on the motorways, so those people take the train between cities.

When San Antonio and Austin have a combined 10 million people living in the same number of square miles, maybe Dan's idea will have legs. Perhaps in 2150, they can start laying rail.

[gtownspur]

all signs points to Vashner compensating for having a little baby dick.


That's fine, i heard you'll take any dick. :lol

Sad how you point to your anus out in public and scream "One size fits all!".

[Extra Stout]

For all Ford's problems, they still managed to post a $2 billion profit for 2005, while GM lost over $8 billion.

GM is not long for this world.

[Yonivore]

I'm ready for my alternative-fuel flying car now.

[boutons_]

January 26, 2006

G.M. Reports Big Losses as Its Woes Grow
By MICHELINE MAYNARD and VIKAS BAJAJ

DETROIT, Jan. 24 — The General Motors Corporation reported today that it lost $8.6 billion in 2005, when it kicked off restructuring efforts meant to help it reverse a string of losses and face relentless industry competition.

In North America, G.M. lost more than $5 billion on its automotive operations, as sales of sport utility vehicles fell, advertising expenses rose and the company faced even higher costs for heath care expenses.

Much of G.M.'s annual loss came in the fourth quarter, when the automaker lost $4.8 billion.

The loss for 2005 was G.M.'s largest since 1992, when the company's management was ousted in a boardroom coup and G.M. was in danger of seeking bankruptcy protection. That year, G.M. lost $23.5 billion, in part because of accounting requirements that companies estimate future costs for their retirees.

In contrast to the 2005 loss, G.M. earned $2.8 billion in 2004.

G.M.'s results came four days after the Ford Motor Company announced it would close 14 factories over the next six years and eliminate as many as 30,000 jobs.

G.M. made a similar announcement in late November, when it said it, too, would cut 30,000 jobs and close all or part of 12 factories.

Together with the Chrysler Corporation, which went through its own restructuring plan earlier this decade, the Big Three American automakers have cut 140,000 jobs since 2000.

The news this week from G.M. and Ford "is the sad story of two armies in retreat, a retreat that is feeling more and more like a rout," said James P. Womack, an author and specialist in manufacturing efficiency.

Both G.M. and its cross-town rival Ford have found themselves squeezed by two powerful forces: intense competition from foreign companies like Toyota, and rising costs for both labor and materials such as steel.

Toyota, in fact, is challenging G.M. for the title of the world's biggest automaker, which it could claim as soon as this year. In contrast to G.M., Toyota has said it expects its profits for the year ending in March to exceed the $11 billion it earned the year before.

The problems in Detroit have raised the issue of a federal bailout, like the one Chrysler received from Congress in 1979. But in an interview with The Wall Street Journal published today, President Bush said that G.M. and Ford executives had not asked him for federal aid.

Nor would he look favorably upon such a request. Mr. Bush said he would instead encourage the automakers to build "a product that's relevant."

"I would hope I wouldn't be asked to make that decision," he told The Journal.

This afternoon, G.M.'s shares were trading down 97 cents, or 4.1 percent, to $22.88 on the New York Stock Exchange.

G.M.'s fourth-quarter loss of $4.8 billion, or $8.45 a share, is the company's fifth straight quarterly loss. The company lost $99 million, or 18 cents a share, in the fourth quarter in 2004. G.M.'s quarterly revenue totaled $51.2 billion, compared with $51.4 billion a year earlier.

In a conference call with Wall Street analysts and investors, G.M.'s new chief financial officer, Frederick Henderson, said the company ran into a range of problems last quarter. "There are no highlights," he said. "It was a very, very tough quarter."

G.M. blamed several factors for its deep loss. First, its market share in the United States fell by 2 percentage points, leaving G.M. with only 23.6 percent of the American market.

High gasoline prices in the United States meant the company sold fewer S.U.V.'s, which meant its revenue per vehicle dropped. G.M.'s costs for health care and material costs, including the price it pays for steel, rose during the quarter. It also spent much more on advertising, reflecting its new program that cut prices on three-quarters of the vehicles it sells in the United States.

"The results are logical, but unacceptable," Mr. Henderson said. "The losses are very, very high."

Mr. Henderson said G.M.'s plan to cut its structural costs by $7 billion a year were a "good start." But he said the automaker would be under pressure to improve the "robustness" of its results.

Some analysts said the company has not sufficiently shown that it is moving aggressively to achieve such an improvement. G.M. did not provide an update on its plans for its credit unit, the General Motors Acceptance Corporation, nor did it comment on proposals by its largest individual investor, Kirk Kerkorian, who has said G.M. should stop paying a dividend, said Shelly Lombard, a bond analyst at Gimme Credit, a research firm.

"The fourth quarter was expected to be lousy and that's exactly what we got," she said. "The main thing that was missing from the call was any indication that the urgency has improved and the company."

The special charges taken by G.M. against its fourth-quarter results included an after-tax charge of $2.3 billion to reflect costs G.M. expected to incur because of the bankruptcy at the Delphi Corporation, the nation's biggest parts supplier, which had been part of G.M. until 1979.

About 4,000 workers at Delphi have the right to return to G.M. if jobs are available. G.M. would then be responsible for their pension and health care costs. Meanwhile, G.M. said it also took a $1.2 billion charge to pay for its restructuring program.

Micheline Maynard reported from Detroit for this article, and Vikas Bajaj from New York.

* Copyright 2006The New York Times Company

[Yonivore]

If they had busted the unions when they had the chance...

[Extra Stout]

If they had busted the unions when they had the chance......it would have helped, but then they'd still have the problems of poor design, substandard material quality, and disorganized product portfolio.

[2centsworth]

So why is San Antonio/Bexar County willing to pay to build expensive toll-roads that will benefit few, but not a light rail system connecting Austin-San Antonio that will benefit many? Aren't our own city planners being as short-sighted as FORD management?
simple answer is tax revenue. total sham visit www.satollparty.com (http://www.satollparty.com).

think this discussion is worth a seperate thread.

[Yonivore]

...it would have helped, but then they'd still have the problems of poor design, substandard material quality, and disorganized product portfolio.
That's where true competition would have come into play.

If the manufacturers weren't so busy cradle-to-graving their union employees with obscene compensation packages, extorted by the unions, they could have concentrated their dollars on R & D; attracting quality engineers, emphasizing quality designs, and buying quality materials.

That's hard to do when you're paying an illiterate $35.00 an hour (and more) to put the same bolt in the same hole day after day after day and, then, continuing to do so when they are laid off or otherwise unable to work.

[Oh, Gee!!]

That's where true competition would have come into play.

If the manufacturers weren't so busy cradle-to-graving their union employees with obscene compensation packages, extorted by the unions, they could have concentrated their dollars on R & D; attracting quality engineers, emphasizing quality designs, and buying quality materials.

That's hard to do when you're paying an illiterate $35.00 an hour (and more) to put the same bolt in the same hole day after day after day and, then, continuing to do so when they are laid off or otherwise unable to work.

blame the workers, you're a true Libertarian.

[Yonivore]

blame the workers, you're a true Libertarian.
I blame the Unions and the manufacturers that didn't have the gonads God gave Wal-Mart who, by the way, is standing up to the unions.

Opened a store a block outside Chicago because Chicago capitulated to the unions and wouldn't allow them to build there. Had 14,000 applications for 325 jobs.

And, if you blame that on a soft job market, you'd better be ready to point to other big box employers in the area who have received as many applications for so few jobs.