Ford (NYSE:F) still does not think it will sell enough cars in the US this year to keep all of its employees and make progress toward profitability. In a move to rectify that "the auto maker's goal in offering the companywide buyouts will be to cut as many as 11,000 hourly jobs and as many as 2,000 salaried positions," according to The Wall Street Journal.
Ford's US vehicle sales fell 12% last year. Its share of the US market is probably not much better than 16%. It now sits in third place in domestic sales having fallen behind Toyota (NYSE:TM) last year.
While the headline may be that Ford is cutting more people, there is a message between the lines. If Ford's market share continues to drop, at some point this year or next it may not be a viable car company in its home market. Cuts can only take the company so far if consumers simply won't buy its cars.
Ford may be saving money, but that does not mean it is saving its business.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
1-24-2008 @ 8:03AM
Micro1234 said...
Instead of interpreting the headlines to serve this bloggers need to view all news about Ford in a negative light, perhaps it should be taken into consideration that most of these hourly positions are going to be replaced by workers making half the wages of the individuals they will be replacing. So they will take a big hit to cover the buyouts but over the long-term they will be a much more profitable company. Ford is fast becoming a "retail" automotive company. They are quickly leaving the "rental fleet" business to the GM, Chrysler, and Toyota's of the world. Yes I said Toyota. While their fleet sales are still lower than the Big 3, it is still interesting to note that they have increased their fleet sales considerably in order to catch GM in sales. It will interesting to see if the increase in fleet sales along with the semi-publicized drop in quality will lead to drops in residual values for Toyota. Or can the perception in the market overcome the realities?
1-24-2008 @ 8:11AM
doug mcintyre said...
The shares are down on earnings.
Doug McIntyre
1-24-2008 @ 4:19PM
Jerry Woody said...
Your comments about Ford are inappropriate. If Ford is in trouble it because people like you drive a foreign car and have not drive a Ford product for the past two years.
Basically domestic and foreign cars and trucks are of comparable quality. Most people have written off American products even though they have made their living in this country for many years.
The balance of trade deficit will be the downfall of America. People who buy foreign cars and trucks put money directly in the profit till of foreign
countries which pays for their research and development of future products.
Amercan cannot continue to compete as long as we keep sending our hard earned dollars to our World competitors.
Jerry Woody
Ford Retiree
2-03-2008 @ 3:04PM
Jon Jebb said...
I agree with Jerry Woody comments about Ford and the American industry. We continue to loose jobs to foreign trade, the dollar continues to decline and the traded deficet continues to increase. Surprising our future Presidential politians do not address this problem. They have no answers because they do not understand the problems. Who ever thinks we are a part of A GLOBAL ECONOMY DOES NOT UNDERSTAND. We make to much money in America to compete. This can not continue. Now foreign invsting are buying us out completely. WAKE UP AMERICA