Ford CEO Farley making the tough decisions

JeffKeryk said:
The opposite is true; Ford is cutting the poor performing products to focus on what works and what they believe will work going forward.
He speaks to the dealership sales model and high warranty (quality) costs.
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Home Depot sold two dollar bags of Scott's mulch this weekend, the same price they have sold the mulch at for the past five years for the sale. I am sure Home Depot is not making a killing selling the mulch, likely even selling the mulch at a loss once labor is put into the equation.

Home Depot could just sell "what works" instead of the mulch being sold annually at or near or below cost. But Home Depot has a huge store network and a massive, fixed costs. They have to get people into their stores to pay the fixed costs and overhead. If Home Depot drops marginally profitable items- Home Depot will be less profitable long term.
 
JeffKeryk said:
The dealership practice of chasing short term money has been made worse than ever as they took advantage of the pandemic shortages.
They are shooting themselves in the foot but don't care because dealer managment is transitory.
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Our dealership won’t need to change - it’s always sold 80% trucks and 70% of those are Super Duty…
 
GON said:
And Super

And Super Duty gravy train.
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Funny you mentioned Super Duty. A week ago I parked in front of a Ford Super Duty pickup that was an amazing color of Red. It was either brand new or almost new.

There were two distinct spots on the leading edge of the hood where that paint had come off. One was the circumference of a tennis ball. The other was smaller. I was trying to figure out if it was a paint defect or something had gotten onto it there. It wasn’t from any impact.

The guys I were with thought it was strange too. Right down to the primer.
 
GON said:
Home Depot sold two dollar bags of Scott's mulch this weekend, the same price they have sold the mulch at for the past five years for the sale. I am sure Home Depot is not making a killing selling the mulch, likely even selling the mulch at a loss once labor is put into the equation.

Home Depot could just sell "what works" instead of the mulch being sold annually at or near or below cost. But Home Depot has a huge store network and a massive, fixed costs. They have to get people into their stores to pay the fixed costs and overhead. If Home Depot drops marginally profitable items- Home Depot will be less profitable long term.
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Home Depot sells more than 1M products for the DIY to contractor customer base. They are the industry's largest player. Do you think they sell mulch in a silo? You need more than mulch to garden.

Ford sells products that are one of the biggest purchases most people will ever make and are player in a sea of car companies.

By the way, do you think Home Depot keeps selling low margin products that do not move? I can tell you they are a highly computerized company constantly analyzing sales performance. Like Ford, they are not in the business of losing money.
 
JeffKeryk said:
Home Depot sells more than 1M products for the DIY to contractor customer base. They are the industry's largest player. Do you think they sell mulch in a silo? You need more than mulch to garden.

Ford sells products that are one of the biggest purchases most people will ever make and are player in a sea of car companies.

By the way, do you think Home Depot keeps selling low margin products that do not move? I can tell you they are a highly computerized company constantly analyzing sales performance. Like Ford, they are not in the business of losing money.
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Home Depot is not in the business of shrinking it's customer base. Very simple.
 
GON said:
Home Depot sold two dollar bags of Scott's mulch this weekend, the same price they have sold the mulch at for the past five years for the sale. I am sure Home Depot is not making a killing selling the mulch, likely even selling the mulch at a loss once labor is put into the equation.

Home Depot could just sell "what works" instead of the mulch being sold annually at or near or below cost. But Home Depot has a huge store network and a massive, fixed costs. They have to get people into their stores to pay the fixed costs and overhead. If Home Depot drops marginally profitable items- Home Depot will be less profitable long term.
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It is probably a loss leader. Get the customers in to buy mulch. A good portion of them will get something else along with it.
 
MrHorspwer said:
Won't be all things to all people = Stick to core competencies that make money and stop trying to compete with strong established competitors in niche segments (i.e. Jeep Wrangler beating up on Bronco in sales and stealing all their lunch money)

Emphasize software and services = Software as a service and subscription models
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doesn't help that the Bronco is somehow built with even worse quality than a Jeep :poop:
 
GON said:
And they return to Home Depot when they need appliances, cleaning supplies, all kinds of stuff. Potential lifelong customers, all from an annual mulch sale.
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So Ford should sell mulch? I am not sure they are in the business of home improvement, except for trucks, but ya never know...
Just kidding! But my point is, Ford and Home Depot are in totally different markets. Apples to oranges.
 
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GON said:
And they return to Home Depot when they need appliances, cleaning supplies, all kinds of stuff. Potential lifelong customers, all from an annual mulch sale.
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That is probably a bit over the top.
However, that will appeal to the one stop shopper, for which HD may recoup some of the money they forfeited on the loss leader.
 
If you actually read the article, the title should really be : Ford's Farley: Cut costs and boost margins through software and services (and throw "improve quality" into the headline to make everyone feel good.)

The only reference to quality was Lean. Lean is a cost cutting religion masking as a quality initiative, not to mention Lean was old when I entered the workforce 30 years ago. I digress.

I agree with @GON. Sad to see.
 
JeffKeryk said:
Home Depot sells more than 1M products for the DIY to contractor customer base. They are the industry's largest player. Do you think they sell mulch in a silo? You need more than mulch to garden.

Ford sells products that are one of the biggest purchases most people will ever make and are player in a sea of car companies.

By the way, do you think Home Depot keeps selling low margin products that do not move? I can tell you they are a highly computerized company constantly analyzing sales performance. Like Ford, they are not in the business of losing money.
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Technically, ford outsources their sales efforts to their dealers.

Perhaps they should outsource it to HD instead - they seem much more efficient at it? Since there thinking outside the box - Free bed full of Scotss's Mulch with every SuperDuty Purchase. :ROFLMAO:.
 
GON said:
After reading the article, the question is who is going to buy Ford's pickup truck division? GM, Mercedes, or VW? Stick a fork in Ford, it is over for them, as long as Farley continues at the helm. Honda Civic drivers often end up buying Acuras. Toyota Corolla buyers often end up buying lexus. That is how it works, no Harvard MBA or brain power needed to know that.

Ford can't survive/compete long term by being a niche player. It's obvious Farley wants to generate short term profits till he can cash out/ retire.
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That's always been their mindset.
 
Ford can blame the stealerships near me for marking up everything. I've yet to see a ford maverick at msrp. They all have 5k addendums which should be illegal at this point. I'd buy one at msrp but not over. But the msrp already increased recently anyway.
 
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