Ford CEO Farley making the tough decisions

[fdcg27]

I wonder whether the apparent dumpster fires that are called Ford, GM and what remains of Chrysler are the result of misguided attempts to shrink to profitability? All three have drastically shrunk both the breadth of their offerings as well as their production capacity. In the case of Ford, if they could produce more Mavericks then their dealers would not need, nor be able, to mark these things way up over MSRP and the same is true of the Bronco and the mainstream half ton pickups. If supply were more in line with demand that would bring many more customers into the brand. This is also true for GM and the Chrysler brands in the US and a buyer who has good experience with the brand is likely to return to it, which is what these manufactures need.
Shrinking to profitability never seems to work yet remains a favorite B-school grad strategy.
It seems to me that it's a lot easier to teach an engineer what they need to know about finance and economics than it is to teach an MBA what they need to know about engineering.
Maybe we have our corporate leadership qualifications backward?

 

[JeffKeryk]

I wonder whether the apparent dumpster fires that are called Ford, GM and what remains of Chrysler are the result of misguided attempts to shrink to profitability? All three have drastically shrunk both the breadth of their offerings as well as their production capacity. In the case of Ford, if they could produce more Mavericks then their dealers would not need, nor be able, to mark these things way up over MSRP and the same is true of the Bronco and the mainstream half ton pickups. If supply were more in line with demand that would bring many more customers into the brand. This is also true for GM and the Chrysler brands in the US and a buyer who has good experience with the brand is likely to return to it, which is what these manufactures need.
Shrinking to profitability never seems to work yet remains a favorite B-school grad strategy.
It seems to me that it's a lot easier to teach an engineer what they need to know about finance and economics than it is to teach an MBA what they need to know about engineering.
Maybe we have our corporate leadership qualifications backward?

The problem as I see it is 2 fold: quality and product life cycle.
Starting in the mid 70's, the Big 3 took a quality hit, smog made engines run hot and then Honda/Toyota cam in and ate their lunch in the 80's. People had been buying VW bugs and driving them for almost nothing in comparison. Now there is Hyundai/Kia and so many others. I kinda cry when I hear the long time Ford owners say they are done with the brand due to quality issues.

The 2nd problem is product life cycle... Unless car companies change with the times, they will struggle. I read today that CEO Farley is moving towards a no haggle price ala Tesla. The dealership model is a non-value added cost at best.

Ford and GM are profitable; now that the pandemic is past they can move forward. I am not a fan of Ms Barra but Mr Farley is pushing Ford forward. I wish them both success. These are great American companies.

 

[fdcg27]

The problem as I see it is 2 fold: quality and product life cycle.
Starting in the mid 70's, the Big 3 took a quality hit, smog made engines run hot and then Honda/Toyota cam in and ate their lunch in the 80's. People had been buying VW bugs and driving them for almost nothing in comparison. Now there is Hyundai/Kia and so many others. I kinda cry when I hear the long time Ford owners say they are done with the brand due to quality issues.

The 2nd problem is product life cycle... Unless car companies change with the times, they will struggle. I read today that CEO Farley is moving towards a no haggle price ala Tesla. The dealership model is a non-value added cost at best.

Ford and GM are profitable; now that the pandemic is past they can move forward. I am not a fan of Ms Barra but Mr Farley is pushing Ford forward. I wish them both success. These are great American companies.

The 'seventies were fifty years ago. Any hallway competent management would have corrected things by maybe forty five years ago.
In terms of life cycle, all of Tesla's current offerings are pretty dated, but Tesla is able to react by reducing the selling price.
Where do Ford, GM and the remains of Chrysler go from here?

 

[dishdude]

The 'seventies were fifty years ago. Any hallway competent management would have corrected things by maybe forty five years ago.
In terms of life cycle, all of Tesla's current offerings are pretty dated, but Tesla is able to react by reducing the selling price.
Where do Ford, GM and the remains of Chrysler go from here?

The big 3 are putting out some excellent products, but just like your paint post you seem to only find imperfections in their products and gloss over any issues the asian brands have.

 

[JeffKeryk]

The 'seventies were fifty years ago. Any hallway competent management would have corrected things by maybe forty five years ago.
In terms of life cycle, all of Tesla's current offerings are pretty dated, but Tesla is able to react by reducing the selling price.
Where do Ford, GM and the remains of Chrysler go from here?

You can make that case. No arguement here. But the past is gone; that ship has sailed. I am rooting for CEO Farley to steer that big Ford ship into the future. He has made no bones about quality and legacy business processes. Heck, he even broke out Ford Model e out from the legacy business. Ms Barra seems to think GM walks on water...

Regarding Tesla, they are run like a software company; constant functionality changes and updates. The software based architecture enables this. Everyone is chasing them as Tesla continues to take market share. Ford and GM better hope the Cybertruck does not do too well as pickups are their bread and butter. The Model Y will be the #1 selling vehicle in the world this year. I am waiting for the Model 3 Highland which will be my 2nd Tesla purchase. Every other car is, at best, old skool to me. Ford and GM have loyalty going for them; that is waning to whatever degree, but is waning nontheless.

Remember, CEOs have strengths and weaknesses. A brilliant CEO may be able to take a company from start up to rapid growth mode, but not into long term success. Musk, Farley, Barra and Toyoda will all have their day but will need to hand the reins over one day. Everything changes.

 

[JeffKeryk]

The big 3 are putting out some excellent products, but just like your paint post you seem to only find imperfections in their products and gloss over any issues the asian brands have.

That may be true but does not wipe away the loyal customers who feel betrayed by these companies. I have said many times I am shocked and saddened by comments from one time loyal customers. Time will tell. I think the 1st thing Ford and GM should consider is streamline (fix) the purchase process. The current dealership model is at its lowest point. Customers hate them. Of course that's just my opinion...

 

[4WD]

Wasn’t long ago these co’s were asked to make PPE … anyone who thinks decisions made during that period were autonomous is just a biased fool … Then came the chip shortage …
What country caused all this …

 

[CanAmAndMore]

Wasn’t long ago these co’s were asked to make PPE … anyone who thinks decisions made during that period were autonomous is just a biased fool … Then came the chip shortage …
What country caused all this …

Don't know what PPE is.
But the chip shortage to me is total BS.
Why would all these huge companies rely on one place.
If you are a massive corporation, you can build your own chips.

 

[fdcg27]

Let me be clear in that I want to see these legacy US companies succeed and prosper, creating and maintaining high wage jobs for our people as well as world-class product for us to buy and own. There is no law mandating that Tesla, VW and Toyota get to steal the lunch money from Ford, GM and Chrysler. I just find it hard to see this happening based upon the past fifty years, where these companies have repeatedly admitted to past failures and claimed to have learned to offer better going forward, only to slip back into the situation in which they now find themselves.

 

[PWMDMD]

I’m at my national meeting in Orlando and so using Uber a lot. I rode in a current model Ford Explorer with 50k miles on it and it was clearly well cared for by looks, what a piece of crap. The interior is all cheap and squeaky plastic. The ride over bumps was terrible and it felt like it already needed new shocks/springs. The thing felt like it could come apart around me. The engine was smooth but the transmission had several clunks and spastic moments of confusion in spite of the rather large say driving.

I also rode for the first time in a current model Mazda CX-9 with 56k miles on it. What a difference! Interior was light years better and tight and no squeaks and it felt like a tank. The ride over bumps was forgiving and supple. The engine sounded great and the transmission was invisible.

If that’s the best Ford can do then it’s not good enough.

 

[PWMDMD]

Don't know what PPE is.
But the chip shortage to me is total BS.
Why would all these huge companies rely on one place.
If you are a massive corporation, you can build your own chips.

Chip fab is a highly technical and difficult process requiring billions and billions of dollars in investment and technical knowledge. There’s a reason there are so few chip manufacturers in the world and to my knowledge not a single car company makes their own chips.

 

[4WD]

Chip fab is a highly technical and difficult process requiring billions and billions of dollars in investment and technical knowledge. There’s a reason there are so few chip manufacturers in the world and to my knowledge not a single car company makes their own chips.

Right on - even the computer builders buy chips …
Gotta wonder what China wants from Taiwan …

 

[zzyzzx]

But the chip shortage to me is total BS.
Why would all these huge companies rely on one place.
If you are a massive corporation, you can build your own chips.

They all rely on one place because it goes out to the lowest bidder, and they have little or no risk management.
They can't build more parts themselves because of their union payscales would make then uncompetitive.
They all seem to lack long term thinking.
Yes, "chip shortage" is a euphemism for all parts shortages. There is no excess capacity built into the system because that costs money and isn't profitable. You see the same in electricity providers now too, and not just in California.

 

[JeffKeryk]

No car company fabs their own chips (silicon wafers processed into semiconductor chips). Renesas in Japan is big in auto chips. But that's kinda the easy part; bare chips need firmware programming (think NVIDIA) for the requisite task. Only Tesla programms their own chips which allowed them to repurpose available chips. They were able to better manage the shortage, but were certainly not immune to the bigger overall production demand. Ford, in a smart move, opened up an office in Palo Alto to learn the process and bring the chip firmware step in house. I would have to believe other manufacturers will follow suit.

 

[dishdude]

I’m at my national meeting in Orlando and so using Uber a lot. I rode in a current model Ford Explorer with 50k miles on it and it was clearly well cared for by looks, what a piece of crap. The interior is all cheap and squeaky plastic. The ride over bumps was terrible and it felt like it already needed new shocks/springs. The thing felt like it could come apart around me. The engine was smooth but the transmission had several clunks and spastic moments of confusion in spite of the rather large say driving.

I also rode for the first time in a current model Mazda CX-9 with 56k miles on it. What a difference! Interior was light years better and tight and no squeaks and it felt like a tank. The ride over bumps was forgiving and supple. The engine sounded great and the transmission was invisible.

If that’s the best Ford can do then it’s not good enough.

Geez I'm in Mexico and the Uber I was in tonight was a Chevy Beat (sedan version of a Spark) and even that didn't feel like it could come apart around me. Surprising amount of room in the backseat!

 

[CanAmAndMore]

I'm not a Chevrolet/ GMC fan at all, but had a rental vehicle that was a Terrain a few months back, it was 2 years old, and still seemed to be fine.

 

[PWMDMD]

Geez I'm in Mexico and the Uber I was in tonight was a Chevy Beat (sedan version of a Spark) and even that didn't feel like it could come apart around me. Surprising amount of room in the backseat!

Ford is doing an exceptional bad job…lol. Over normal Florida road bumps (not big pot holes) it was actually a little unsettling the noises that Ford made.

I was in a current model Kia Sorrento with 36k miles for the first time ever last night and that was really nice too. Seemed very solid. We did some highway and city driving and the engine/transmission was smooth. The dash and interior was really well done.

 

[4WD]

No car company fabs their own chips (silicon wafers processed into semiconductor chips). Renesas in Japan is big in auto chips. But that's kinda the easy part; bare chips need firmware programming (think NVIDIA) for the requisite task. Only Tesla programms their own chips which allowed them to repurpose available chips. They were able to better manage the shortage, but were certainly not immune to the bigger overall production demand. Ford, in a smart move, opened up an office in Palo Alto to learn the process and bring the chip firmware step in house. I would have to believe other manufacturers will follow suit.

Another way to view it - it’s been posted here many times that Ford’s bread and butter = pickup trucks … Not much debate here … In fact I’d say SD outsells the F150 by 2:1 …
Well, Ford had acres of Super Duty units stranded waiting for chips - and folks had their names on many of them …
My ex-boss finally got his F250 for $90k and BTW - had hopelessly started out looking for a Chevy DMax …

 

[CanAmAndMore]

Another way to view it - it’s been posted here many times that Ford’s bread and butter = pickup trucks … Not much debate here … In fact I’d say SD outsells the F150 by 2:1 …
Well, Ford had acres of Super Duty units stranded waiting for chips - and folks had their names on many of them …
My ex-boss finally got his F250 for $90k and BTW - had hopelessly started out looking for a Chevy DMax …

Reason one million and one to make their own chips.

 

[Jetronic]

Tomorrow is bash GM day.

And then we can go back to the usual programming.... Stellantis