Ford's future
02-15-20, 08:03 AM
#16
Lexus Fanatic
That's my basic view, too, but the public, as a whole, has become enamored with crossovers. I'm a firm believer in the axiom that one cannot sell what they do not build, but the real question is if there are enough potential sales to justify the expenses of production. Plus, not only that, but the Focus and Fiesta had a crap dual-clutch transmission that caused its owners nothing but problems (there is a class-action suit on it), even after several years of production. The Fusion, I agree, was a nice mid-size sedan...one of my favorites in that class, and it did continue to sell. Why Ford axed it has simply not really adequately explained.
Last edited by bitkahuna; 02-15-20 at 09:14 PM.
02-15-20, 11:45 AM
#17
Lexus Fanatic
^^^Be careful when you quote someone and bold-out some of the type, Jill...if you accidentally bold out one or more quote brackets, the graphics will not come out correctly with the gray background.
Korean sedans are becoming as much of a factor, if not more so, than Japanese.
Originally Posted by LexsCTJill
Unfortunately, as the US car sale decline (which they are). People while gravitate towards Japanese sedans as times get tougher.
Last edited by mmarshall; 02-15-20 at 11:48 AM.
02-15-20, 11:46 AM
#18
Lexus Fanatic
02-15-20, 02:13 PM
#19
Lexus Test Driver
One reason it is a low-margin business is because of dividends paid out to the shareholders. I'm not saying that those who invest should not be rewarded for it (they should be)....but money that is paid out each quarter to shareholders obviously cannot be used in the company for future growth. The people who run the company have to decide which is more important, and where the available money is going to go. The fact, example, that Lincoln products are so much more impressive now than several years ago shows the difference that wise investment of available funds can make.
Perhaps this is a little off-topic (I'll let you decide that as a moderator), but, while we are all pondering the question of Ford's future, I think we should also look at, and remember, the valuable contributions to the auto industry and country that Ford has made over the years. First, more than any other single company, it actually put America itself on wheels, with the perfection of the moving-assembly-line and the simple, reliable Model T. Then came the first reliable mass-produced V8 with the Model A. Ford produced, in the famous Tri-Motor, the first corrugated-metal airliner for flying passengers, and the smaller Ford Flivver recreational aircraft. During World War II, Ford assembly-lines built the famous ******/Bantam Jeep under license, and produced the war's most widespread bomber, the B-24 Liberator. The massively successful 1964 Mustang invented the idea of the ponycar itself and set a new (at the time) sales-record for a Detroit product. The Taurus, in the 1980s, revolutionized the way sedans were designed and built. The original Ford GT managed to take Formula-One titles away from Ferrari, who produced some of the best exotic sports cars in the world. And the 1990 Explorer was the first SUV to truly appeal to the American family-masses....much more so than had the earlier Jeep Wagoneer.
Perhaps this is a little off-topic (I'll let you decide that as a moderator), but, while we are all pondering the question of Ford's future, I think we should also look at, and remember, the valuable contributions to the auto industry and country that Ford has made over the years. First, more than any other single company, it actually put America itself on wheels, with the perfection of the moving-assembly-line and the simple, reliable Model T. Then came the first reliable mass-produced V8 with the Model A. Ford produced, in the famous Tri-Motor, the first corrugated-metal airliner for flying passengers, and the smaller Ford Flivver recreational aircraft. During World War II, Ford assembly-lines built the famous ******/Bantam Jeep under license, and produced the war's most widespread bomber, the B-24 Liberator. The massively successful 1964 Mustang invented the idea of the ponycar itself and set a new (at the time) sales-record for a Detroit product. The Taurus, in the 1980s, revolutionized the way sedans were designed and built. The original Ford GT managed to take Formula-One titles away from Ferrari, who produced some of the best exotic sports cars in the world. And the 1990 Explorer was the first SUV to truly appeal to the American family-masses....much more so than had the earlier Jeep Wagoneer.
Again, dividends are not a factor in margin. It's basic accounting.
02-15-20, 02:54 PM
#20
Lexus Fanatic
02-15-20, 02:56 PM
#21
Lexus Fanatic
02-15-20, 09:24 PM
#22
Lexus Fanatic
Thread Starter
iTrader: (20)
but the real question is if there are enough potential sales to justify the expenses of production.
exactly right, not to mention r&d, certification, marketing, etc. ford was selling a lot of sedans, but not making any money so it was pointless unless they could magically come up with more competitive sedans or somehow get higher margins (higher prices or lower costs). It's a rough business.And how do you determine what the dividends will be? Accounting. You have to figure out your company's profits, after expenses, and split it up by the number of stock shares to determine dividends per share. You are an accountant yourself...you of all people would know that.
Dividends are generally offered to attract investment in a stock that isn't increasing in value much. Utilities and banks have offered dividends as examples because their businesses grow so slowly there's little interest in buying the stock otherwise. Having said that i will always kick myself for not having bought boatloads of bank of america after the 2008 crash especially after the govt FORCED them to eat the turd of Countrywide.Anyway, way off topic... but about FORD dividends in particular, i have a friend who bought some shares of ford around $9 because he thought it was a 'cheap' way to get dividends. Not the best investing move but he's young and learning. Ford right now is around $8.10 a share so any dividends he's made would be wiped out by the equity losses.
02-16-20, 07:34 AM
#24
Lexus Test Driver
I think Ford is in a world of trouble.
It all goes back to management/ownership having the wrong view of the future. They want to be a mobility company- what does that mean?
They can’t build proper ICE cars for the most part, i have ZERO confidence that this FUGLY Mach E EV crossover will be any good. Companies like BMW and MB have already realized its not that easy. Tesla Model Y is coming in a few months and is better and cheaper than the Ford and its a Tesla!
Ford and GM need to merge - share platforms and develop EV vehicles, factories, charging stations, marketing etc.
The F150 will keep them afloat for next 5-10yrs if economic conditions remain strong.
It all goes back to management/ownership having the wrong view of the future. They want to be a mobility company- what does that mean?
They can’t build proper ICE cars for the most part, i have ZERO confidence that this FUGLY Mach E EV crossover will be any good. Companies like BMW and MB have already realized its not that easy. Tesla Model Y is coming in a few months and is better and cheaper than the Ford and its a Tesla!
Ford and GM need to merge - share platforms and develop EV vehicles, factories, charging stations, marketing etc.
The F150 will keep them afloat for next 5-10yrs if economic conditions remain strong.
02-16-20, 11:09 AM
#25
Lexus Fanatic
I recommend not debating accounting with an accountant.
Anyway, way off topic... but about FORD dividends in particular, i have a friend who bought some shares of ford around $9 because he thought it was a 'cheap' way to get dividends. Not the best investing move but he's young and learning. Ford right now is around $8.10 a share so any dividends he's made would be wiped out by the equity losses.
$8 a share, BTW, sounds like a real buying opportunity. I generally avoid stocks, but that price may (?) tempt me. I don't expect to se the kind of run-up that Tesla stocks have recently had, but the general direction will probably be up.
Last edited by mmarshall; 02-16-20 at 04:21 PM.
02-16-20, 11:34 AM
#26
Lexus Fanatic
Thread Starter
iTrader: (20)
$8 a share, BTW, sounds like a real being opportunity. I generally avoid stocks, but that price may (?) tempt me. I don't expect to se the kind of run-up that Tesla stocks have recently had, but the general direction will probably be up.
just because it's at $8, doesn't mean it can't go to $4, or $2, etc.
02-16-20, 04:41 PM
#27
Lexus Fanatic
Sure, you could buy it at even $1 a share (they call those penny-stocks)...and it could drop to 50 cents (or even 25 cents). But one obviously assumes at least some risk (or the risk of the company's bankruptcy) no matter where the purchase-price is. That's simply part of the investing process itself.
02-16-20, 05:18 PM
#28
Lexus Test Driver
Dividends may result in the company being undercapitalized, but it has no bearing on the profitability of the vehicles. Profit determines dividends, not the the other way around.
Ford and GM have a distinct disadvantage in the industry when compared to Toyota, Honda, et all.....higher labor costs that can't just be shrugged away. It will always cost the domestics more to produce the same vehicle as the Japanese automakers. Profit margins aren't big on small cars. The japanese are able to make this up through volume. But volume can't save the Focus or the Cruze when there isn't enough(or any) profit per vehicle. And if the UAW isn't willing to make concessions on that front, then the cars simply can't be produced profitably, especially as the sales decline in that segment as the market shifts towards CUV's. Personally I would like to see the Fusion continue, and it sounds like Ford hasn't been vocally committed to killing it. My 2012 was a very nice car. I sold it to my sister and she loves it. The Fusion wasn't plagued by the transmission issues that the Focus and Fiesta were, since it uses a traditional automatic gearbox rather than that getrag DCT(Ford's partnership with getrag is a whole other matter I could rant about)
That said....the financial results at Ford are concerning and I hope Hackett knows what he's doing. It seems like Mulally's retirement has had a long-lasting impact. I really enjoy the Ford products I've driven. I've considered picking up a Mustang GT as a weekend toy. It would be sad to lose such an iconic part of the American auto industry.
Also, slight correction to an early remark I saw. Ford upset Ferrari in endurance racing, not Formula 1. If anybody hasn't seen Ford v Ferrari, I highly reccomend watching it.
Ford and GM have a distinct disadvantage in the industry when compared to Toyota, Honda, et all.....higher labor costs that can't just be shrugged away. It will always cost the domestics more to produce the same vehicle as the Japanese automakers. Profit margins aren't big on small cars. The japanese are able to make this up through volume. But volume can't save the Focus or the Cruze when there isn't enough(or any) profit per vehicle. And if the UAW isn't willing to make concessions on that front, then the cars simply can't be produced profitably, especially as the sales decline in that segment as the market shifts towards CUV's. Personally I would like to see the Fusion continue, and it sounds like Ford hasn't been vocally committed to killing it. My 2012 was a very nice car. I sold it to my sister and she loves it. The Fusion wasn't plagued by the transmission issues that the Focus and Fiesta were, since it uses a traditional automatic gearbox rather than that getrag DCT(Ford's partnership with getrag is a whole other matter I could rant about)
That said....the financial results at Ford are concerning and I hope Hackett knows what he's doing. It seems like Mulally's retirement has had a long-lasting impact. I really enjoy the Ford products I've driven. I've considered picking up a Mustang GT as a weekend toy. It would be sad to lose such an iconic part of the American auto industry.
Also, slight correction to an early remark I saw. Ford upset Ferrari in endurance racing, not Formula 1. If anybody hasn't seen Ford v Ferrari, I highly reccomend watching it.
02-16-20, 05:25 PM
#29
Lexus Fanatic
Watch it? I lived through it. But, as I understand the term Formula 1, at the time, didn't it also include the long 12-hour race at Sebring and the even longer 24-hour race at LeMans?
02-16-20, 06:39 PM
#30
Lexus Test Driver
No, it's always been a different type of racing. The Triple Crown of Motorsport is an achievement where a driver wins championships in 3 different motorsports:
Formula One - Monaco Grand Prix
Indycar - Indianapolis 500
Sports Car Endurance Racing - 24 Hours of Le Mans
These races use very different cars. Le Mans uses cars that are the closest thing to "production" out of the 3, as there are certain homologation rules to enter, especially back when Ford went in the 60's. Now they have different classes, with prototypes being the top dog and usual overall winner.
Formula One - Monaco Grand Prix
Indycar - Indianapolis 500
Sports Car Endurance Racing - 24 Hours of Le Mans
These races use very different cars. Le Mans uses cars that are the closest thing to "production" out of the 3, as there are certain homologation rules to enter, especially back when Ford went in the 60's. Now they have different classes, with prototypes being the top dog and usual overall winner.