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It's become nearly tiresome by now -- car companies, especially one of the Big Three, announcing yet another production cut or shift, job cut, reorg, sales decline, losses, what not. If Thursday it was GM's turn, Friday it was Ford's turn. Ford Motor Co. (NYSE: F) said it "will delay introduction of its new F-150 pickup truck by two months and further cut production because of the declining market for pickups and sport utility vehicles."If it wasn't so genuinely sad, and the implication of this, big picture wise, weren't so alarming, I might just say, boo hoo. The problem is, though, as much as I tend to shake my head when reading this and think "haven't you seen the writing on the wall," I'm more concerned about what all this could mean.
If you recall, only last quarter Ford surprised us with a profit. Yes, a profit. Then, not long after that, Ford said it no longer anticipates to return to profit in 2009. Today, Ford also said its 2008 financial results will actually be worse than the $2.7 billion loss it recorded in 2007.
Sure, some of it isn't Ford's fault. The housing slowdown, the economy grinding to a halt, the credit crunch, inflation and oil -- these are all external factors. But some of it is its fault -- the part that relates to Ford's lack of vision, misreading the market and consumer trend and clinging to old school methods. And that's why I'm mad. Ford has an impact on many people's lives, from employees to shareholders and it has a responsibility to all of them, one that may soon falter completely.
So now Ford knows that smaller is better and that people would love a good hybrid, even electric, if there was one. I'm glad this all finally managed to sink in.
Meanwhile, Kirk Kerkorian, through Tracinda Corp., is increasing his holding in the automaker. His stake now stands at 6.5%. While I've long lost confidence in his ability to turn a car company around, the optimist in me would like to believe his own (at least public) confidence in Mulally and company isn't misplaced. If anything, because of his holding, perhaps there's hope for Ford yet. Can't hurt to hope (although I wouldn't put my money on it).
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Reader Comments (Page 1 of 1)
6-20-2008 @ 2:39PM
david said...
Ford has a long hsitory of innovation and leading the way.
Now is the time to bring that back !!
We know you can do it.
6-20-2008 @ 3:34PM
jpdr1100 said...
Cheerleading won't do it.
At this point I think a merge with a successful company is needed. They frequently don't work, but I don't see much in Ford's pipeline that will bring a turn-around.
6-20-2008 @ 5:05PM
larry Lubell said...
What a SHOCK!
Ford has counted on sales of trucks to keep the company afloat, now at a time of $4.50 gas people are turning to smaller cars that can go 30 miles on a gal. of gas. Ford sells a few cars that fit that bill, but not enough to save them.
We are also and a slow economy that has hit the construction business particularly hard, and those occupations are the largest buyer of trucks.
Truth is, you got to give them credit for getting up out of bed each morning, going down to the dealership and giving it their best shot.
Between the prise of gas, Insurance, up-keep, as well as paying the monthly payment, it is getting harder and harder for most of us to pay the bills each month.
http://urbaninsuranceagency.com/blog.php?content=displayPost&id=139
Ford, GM and Chrysler, all are playing "Catch-up" at a time when the "Best performing" car companies are struggling.
I wish them all the best.
http://urbannewsblog.blogspot.com/2008/06/price-of-gas-in-2008.html
Larry Lubell
Larry@urbanInsuranceAgency.com
6-22-2008 @ 11:59AM
wayne said...
every one is so worried,but unless bussiness are going to stop buying trucks worry not.
7-24-2008 @ 12:17PM
Yalla said...
When ever I hear of another negative announcement from one of the Big Three a picture of the Emperor from Star Wars comes to my mind with force lightning coming out of his fingers and saying to Luke (in my dream played by Ford).... "Your feeble SUV skills are no match for the power of rising fuel cost! You will pay the price for your lack of vision!!"