Ford's Turn to Laugh at GM Won't Be Best or Last

[mahatmakanejeeves]

There have been some threads lately about GM's electric cars, the price of gasoline, and so forth.

Ford's Turn to Laugh at GM Won't Be Best or Last: Doron Levin

>>
Doron Levin is a columnist for Bloomberg News. His opinions are his own.

March 17 (Bloomberg) -- General Motors Corp. kicked Wall Street in the teeth with downward earnings guidance yesterday, prompting Ford Motor Co. to reassure investors that its financial performance remains on track.

Ford's position and prospects, however, are only marginally better than those of GM. The two biggest U.S. automakers are in the same pickle: Their vehicles -- especially cars -- aren't selling well.
....

The heart of the problem for both companies is sales in their home market. For the first two months of 2005, GM's U.S. sales were off 9.9 percent and its market share slipped to about 25 percent from about 27 percent -- dropping it to a low for the modern era.

Ford sales were off 7.4 percent, with its market share barely clinging to 20 percent, down fractionally from last year.
....
<<

[doc03]

1. We are witnessing the beginning of the end of the

last major manufacturing industry left in this country. The same thing happened to textiles, glass, electronics, steel and on and on.
Over the last few years as union jobs have declined the Republicans have now managed to take over all three branches of government in the majority of the states and the nation. It's sad to see some of the posts on DU where people seem to be pleased with the decline of our last major manufacturing industry.

[shraby]

2. Even old Henry Ford knew that

the people who worked for him needed to make enough money in order to be able to buy the cars they were making for him.
If people don't have jobs can't afford new cars, and the ones that do have jobs aren't making enough to be able to buy cars, the cars will sit on the lots. Simple math would tell them that.

[jmowreader]

3. Ford and GM have the exact same problem

The kind of vehicles Ford and GM like to make (specifically, huge SUVs and pickups with huge initial markups) are not the kind of vehicles people like to buy when gas costs $2 per gallon. Expect the same news about DaimlerChrysler because DC's most popular vehicles are all pretty big.

Even if we weren't in a world of financial hurt, those mongo trucks wouldn't sell when you need to float a loan to fill the tank.

I know how to return the automakers to sanity but it won't be done: just require that all vehicles being advertised as passenger cars be required to meet passenger car safety and emissions standards. SUVs got as popular as they are because they follow the same rules as trucks, which allows the automakers to build them relatively inexpensively. A PTCruiser is required to meet the truck standards, and it's definitely a car.

[muriel_volestrangler]

5. Ford has one advantage: the cars it makes for Europe are better

Both the Focus and Mondeo are frequently praised as amongst the best in their classes. The GM European makes (Opel/Vauxhall) haven't had successes like that for some time.

[jmowreader]

8. The cars both makers sell in Europe are nice

You can buy a car that's just like a Vauxhall in the United States, but it says either SAAB 9.3 or SAAB 9.5 on it.

Both companies have divisions you don't think of as divisions of GM or Ford--SAAB (GM), Volvo (Ford), Mazda (Ford)...Mazdas kick ass, and SAABs and Volvos are nice cars (pricey little bastards, but still nice).

The manufacturers' flagship marques don't make those kinds of cars as their showpieces. Ford's only got like three cars out there--the Focus, which is a good small car, the Mustang, which is...well, a Mustang, no real competition there...and the boring Five Hundred. Ford built a car that's a perfect replacement for the Taurus, which means they traded one fleet car for another fleet car. Who the hell dreams of buying a Taurus, or a Five Hundred for that matter? I see a Taurus going down the street with anyone less than 90 years old behind the wheel, I figure there's a cop in it. Chevrolet has the same problem--except for the Corvette, which comes with a list of chiropractors in the back of the owner's manual, Chevrolet's cars are all boring.

Chrysler has the only American cars on the market people actually WANT to buy. Which is why the Japanese, Koreans and Europeans are doing so well--the boring cars are cheap (and not all that boring, either), and the expensive cars are the kind you'd want to own.

[candy331]

4. Can't buy them cars on a Walmart pay check, ask the rich you know

the ones you bought off with corporate money, to buy your piles of junk with their huge tax breaks.

[notadmblnd]

6. and a big fat DUH to bot GM and Ford and every other company that offshore

you put tens of thousands out of work... you sell no cars! Call the Chinese, Indians and the Mexicans and ask them if they would like to place an order. Oh thats right, you don't pay them enough to afford your product.

[Broadslidin]

7. Ford Motor Co. Is Currently, $119.8 Billion Dollars In Debt........

Just as assembly company,
General Motor bonds are rated as "junk"

so are the assembly company, Ford Motor bonds rated "junk".

Ford's stock symbol is F
and this debt figure can be verified
through the New York Times web business page.

General Motors is currently,
the largest health insurer in the U.S.
A noose that is tightening each day.

Ford Motor Co. is the most financially awash in debt
company that is traded on the New York Stock Exchange.

[mahatmakanejeeves]

13. Bond ratings

The linked article says:

>>
The creditworthiness of both automakers is rated BBB- by Standard & Poor's, one notch from "below investment grade" or junk status. S&P lowered GM's outlook yesterday to "negative," suggesting a downgrade to junk status is possible, while maintaining Ford's rating at "stable."
<<

Their bonds are a step above junk status.

I should have added in my original post that I own some shares of Ford, and my mom owns some shares of GM. Anyone who owns shares in an S&P 500 Index mutual fund owns shares of both. He does not own shares of Daimler-Chrysler through such a fund, as Standard & Poor's considers that a foreign company.

[purji]

9. My husband was laid off from Ford in 2002

For years(at least the last eight) the mantra at Ford hasn't been quality or safty or fuel economy its been "Share holder value".Make sure our share holders are happy and F*ck the rest.

[AP]

10. The new Mustang is a beautiful car. If Ford can make that car, they have..

...hope.

I also suspect Chrysler is going to make it out of this alive, since they're making some nice looking cars too.

[midnight armadillo]

11. Toyota will eat them both

Ditto for Honda. Their cars are better engineered, they sell them at a profit, and they're starting to go all out for the truck market as well. Plus they actually make cars many consumers are clamoring for: hybrids!!

[Beaverhausen]

14. At least Toyota is planning to open a plant in California

and yes I agree that there is a big desire for hybrids out there...myself included.

[mordarlar]

12. Lower the cost we WILL BUY THEM.

::pssst::: Our economy is not doing so hot.