Edmunds Members - Cars and Conversations (Archived)

jmonroe1

thebean said:

How about this for @jmonroe1's mug shot?

Hey, that's an idea. Age that guy by about 25 years, add some gray and about 20 pounds and you got it.

jmonroe

andres3

graphicguy said:

My first CD player was a Magnavox (remember them?), which was actually made by Phillips, the co-developer (with Sony) of audio CDs. I had it modified with different D/A converters, which is why it cost so much. Sounded great. Wish I still had it.

MAgnepans needed a lot of power. Plus, they were monoliths sitting in my “stereo” room, that were picky with speaker placement. But, when fed that power, and set up correctly, they truly enveloped you in sound....you could actually play each instrument in an orchestral piece listening to them. They’re still around by the way. They have their own Home Theater speakers today. I’d be anxious to hear what a rig like that sounds like. Unfortunately, unless you can go to their HQ in MN, you probably won’t find such a set up. I still keep track of them. I love their slogan....”Made in America.....Sold in China”!

Those Thorens turntables are beasts. And yes, with the re-birth of vinyl, can be worth a nice chunk of change.

That said, my Pioneer Elite AVR has more power, more processing, more compute power than anything I would have ever dreamed of back in my 2-channel audio days.

My Japan built Denon receiver is a paper weight right now because of poor customer service by Denon, and poor warranty support. It was over 3.5 years old when it started failing, so well past the 3 year warranty, but not that much past it. I got the feeling that the authorized service centers lacked confidence they had support for replacement parts in stock. I'd understand if it was 10 or more years old. I may have gotten a leftover, but still that puts it at no more than 6 years since release. The frustrating part is I know the amp section works, and the analog section works, it's obviously a problem with the digitial side of the receiver, it just can't play digital sources (but AM/FM, Analog RCA connected CD player works), HDMI/Optical doesn't.

Anyway, I never sold my slightly older HK 7550HD beast of a receiver. It's close to 50 pounds, and let me tell you, as good as the Denon was, it was a lightweight in the low 30 pounds area, and it shows when you listen to the Harmon Kardon's greatness. I'm very happy with the HK, and will use it until it has an issue.

Surprisingly, for some reason despite being a top notch high end receiver, it doesn't have a phono input for record players. The Denon had one, must be because of the more recent resurgence of vinyl. Turns out to be a blessing in disguise. I bought a little PROJECT phono preamp box for about $70 bucks, and it makes the built-in one on the Denon sound like absolute trash. Why include a built-in phono preamp if it's going to be garbage? Better to not include one, because the preamp really does make my records sound much better. A bad preamp in a $200 receiver makes sense, but in a $2,000+ (retail) receiver? I feel cheated by Denon. This $70 part shouldn't have made such a difference!

Regarding Sirius, I drew my line in the sand, and they chose to remain on the other side of it. Wasted 30 minutes of my life on the phone again with them, but this will be the last. I ended up cancelling service for the 2 cars that still had it.

They said the promotion I wanted (60 bucks for 1-year) was not available until tomorrow. I know Sirius' tactics, and I told them I wasn't calling back again tomorrow to waste more time, so do it now or lose me as a cutomer. They put me on hold for like 5 minutes, but came back to say they would not budge, I'm no longer a Sirius Customer, and I'm mad they wasted 30 minutes when I gave them the bottom line right at the start of the conversation on what it would take to keep me as a customer. Even worse, instead of saying the supervisor decided to say no to me, they mentioned another offer they were doing that was still on the other side of my line on the sand. As if I can't do the math and figure out they are making a worse offer than the previous one.

As far as I'm concerned, Sirius is a stain on humanity. I"m relieved to be done with them. I reluctantly stayed with them when bribed at $5/month, but I kept forgetting to renew on-time at 6 months, so the 1 year deal was a necessity as they gouge you upon renewal.

However, if they dare to call me tomorrow offering the deal they wouldn't do today, the offer was only good yesterday. Tomorrow my line in the sand is $55/year per car.

nyccarguy

berri said:

So Ford has just had their debt rating reduced to one step above junk by Moody's and their stock has dropped to under $10. There are forecasts it will hit junk bond status within a year or so. Some attribute the mess to old and stale vehicles, as well as cost cutting QC effects on product. But Ford remains strong in trucks. The family super majority through their special stock shares allows the company to move easier than a normal corporation. If things don't change in the next few years, have to wonder about a merger possibility. The UAW will likely keep Honda out of it, but HyunKia has union in Korea and is weak in trucks. OTOH as long as Ford has cash, the family control makes Ford not nearly at the mercy of Wall Street as most publicly listed corporations. Any thoughts where this all may be headed?

It’s one of the reasons I don’t understand how the stock market works.  Ford is making money hand over fist on F-150s.  To the point where they theoretically “could” stop making everything else and be extremely profitable.  Then you have Tesla who has yet to turn a profit, has production problems, supplier problems, and is also (for now) getting their sales subsidized by the federal government and some states as well.

driver100

jmonroe1 said:

thebean said:

How about this for @jmonroe1's mug shot?

Hey, that's an idea. Age that guy by about 25 years, add some gray and about 20 pounds and you got it.

jmonroe

I still like your current photo better!

driver100

nyccarguy said:

berri said:

So Ford has just had their debt rating reduced to one step above junk by Moody's and their stock has dropped to under $10. There are forecasts it will hit junk bond status within a year or so. Some attribute the mess to old and stale vehicles, as well as cost cutting QC effects on product. But Ford remains strong in trucks. The family super majority through their special stock shares allows the company to move easier than a normal corporation. If things don't change in the next few years, have to wonder about a merger possibility. The UAW will likely keep Honda out of it, but HyunKia has union in Korea and is weak in trucks. OTOH as long as Ford has cash, the family control makes Ford not nearly at the mercy of Wall Street as most publicly listed corporations. Any thoughts where this all may be headed?

It’s one of the reasons I don’t understand how the stock market works.  Ford is making money hand over fist on F-150s.  To the point where they theoretically “could” stop making everything else and be extremely profitable.  Then you have Tesla who has yet to turn a profit, has production problems, supplier problems, and is also (for now) getting their sales subsidized by the federal government and some states as well

.

One supposedly has potential moving forward, one has little future potential moving forward. F-150's do make Ford profitable, it may get sold off - just like AMC sold JEEP.

Personally, I don't get Tesla. Once the big boys like BMW get into this market Tesla will get blown out of the water....the big boys have dealer networks and other products to sell. Maybe they will survive as a niche player, but, that is about it.

berri

Tesla's best shot may be if the can develop and patent state of the art battery technology making them a key supplier.

snakeweasel

thebean said:

How about this for @jmonroe1's mug shot?

That begs the question, what do the other posters here look like? Is this oldfarmer50?

abacomike

berri said:

So Ford has just had their debt rating reduced to one step above junk by Moody's and their stock has dropped to under $10. There are forecasts it will hit junk bond status within a year or so. Some attribute the mess to old and stale vehicles, as well as cost cutting QC effects on product. But Ford remains strong in trucks. The family super majority through their special stock shares allows the company to move easier than a normal corporation. If things don't change in the next few years, have to wonder about a merger possibility. The UAW will likely keep Honda out of it, but HyunKia has union in Korea and is weak in trucks. OTOH as long as Ford has cash, the family control makes Ford not nearly at the mercy of Wall Street as most publicly listed corporations. Any thoughts where this all may be headed?

Ford Motor Company has survived since the Model T.  They even built bombers during WWII and even tanks.  I truly believe that Ford is versatile and agile as far as corporations go.  Yes, their stock is almost at junk status but Ford has something(s) up its sleeve.  No way is the family going to allow this great American company to go the way of others whose names have all but disappeared.

At $10 a share, I am sure the family is buying back shares in order to gain more of a foothold on where and how the company continues being a great manufacturing conglomerate.  If I was 15 years younger, I would be buying Ford stock at $10 a share - at least 10,000 shares.  Unfortunately, I am almost 74 years old and must maintain a conservative approach to money.  I am currently getting 2.5% on CD’s and Money Markets.  But at least it’s insured and safe.  I expect a return of 3% by the end of the year.  That’s a far cry from .08% which I got 1.5 years ago.

Yep, I would be buying Ford stock now if I was younger and still working.

stickguy

Trying to imagine Eva Gabor driving a PT Cruiser. Not working.

berri

aba - learned long ago that while the auto and airline industries are fascinating to follow, their stock is best left to frequent traders rather than long term investors. Personally, after reading quite a few business articles on this, I can't help wondering whether a big part of the Ford problem is articulating clearly where they are going. GM and FCA have done this better. But Ford may have two big issues they need to get a handle on; stale product line up and faltering international business. Other than niche players, the auto industry is global. As for their stock, I understand the bargain potential at under $10, but I'd like to see it over that threshold because many investment firms don't buy stocks priced that low and cumulatively, investment firms tend to make or break markets for a stock. Also, investors tend to look down the road rather than today, and despite the strong F-150, they don't see the rest of the company competitive in a few years without some significant changes and improvements.

ab348

I never saw anything on "the real story" of why Ford fired Mark Fields and replaced him with Jim Hackett, who so far has shown no indication he is in any way qualified to be their CEO. Would be interesting to try to understand that move better.

They really seem to have gone off the rails after Mullaly departed.

bwia

Based on the many positive video reviews of the 2019 Hyundai Santa Fe, it seems it seems as though Hyundai has hit the sweet spot in this crowded SUV space. Even more surprising is Edmunds' glowing review, praising the Santa Fe as the king of this category. They were impressed with its styling, tech, material quality, all around visibility and quietness.

Others we equally gushing with warm praises with only one mentioning its middle of the pact fuel efficiency. Starting at $25k for the base model to $36k for the Ultimate trim level the price tag seems reasonable for the class.

Driver100, do your thing and post us interior and exterior pics of the 2019 Santa Fe.

graphicguy

henryn said:

graphicguy said:

My first CD player was a Magnavox (remember them?), which was actually made by Phillips, the co-developer (with Sony) of audio CDs. I had it modified with different D/A converters, which is why it cost so much. Sounded great. Wish I still had it.

MAgnepans needed a lot of power. Plus, they were monoliths sitting in my “stereo” room, that were picky with speaker placement. But, when fed that power, and set up correctly, they truly enveloped you in sound....you could actually play each instrument in an orchestral piece listening to them. They’re still around by the way. They have their own Home Theater speakers today. I’d be anxious to hear what a rig like that sounds like. Unfortunately, unless you can go to their HQ in MN, you probably won’t find such a set up. I still keep track of them. I love their slogan....”Made in America.....Sold in China”!

Those Thorens turntables are beasts. And yes, with the re-birth of vinyl, can be worth a nice chunk of change.

That said, my Pioneer Elite AVR has more power, more processing, more compute power than anything I would have ever dreamed of back in my 2-channel audio days.

Long ago, in a galaxy far far away, I owned a pair of Magneplanars. I drove them with an Adcom GFA-555. They were the replacement for a pair of Vandersteen 2Ce's. And the Magneplanars were replaced with a pair of Paradigm Elipse BP (bipolar) speakers, which I still have to this day. When I was still married, living in a big country house, I had a full 5 channel Paradigm setup. These days, I just use the one pair of speakers, driven by an Onkyo home theater receiver in 2 channel mode. I don't even use a subwoofer anymore, although I have 3 in storage. Those big Paradigm's don't need a subwoofer.

That’s some great gear.

I have a Thorens turntable, still. It’s not the one I originally had, but one I picked up used. I’ve rebuilt it and use it.

A vinyl setup isn’t for casual listening. Each album is 15-20 minutes per side. So, unless you are sitting in your chair, planning on flipping or digging through your vinyl collection for a longer term listening event, vinyl isn’t the format you want.

That said, there’s a certain satisfaction in digging through an album collection, finding long lost gems, cleaning the record, putting it on the turntable, lowering the tone arm/stylus and listening for several minutes. Did it all the time in college.

I probably should do that more often. But, I usually don’t and have to be in a “mood” to do it.

@abacomike ....glad to hear your health has improved. That’s great news.

On the other front regarding funeral arrangements, as others stated, there’s a reason you don’t see many funeral parlors declaring bankruptcy.

Believe it or not, you can buy a casket through Costco (far less expensive than what you’ll find at a funeral home).

Me? Donate what’s worth anything to science (more specifically, the University of Cincinnati Medical School), cremate the rest and give it to my son. He knows what to do after that. Way less expensive and more meaningful, to me, and my family.

graphicguy

@andres3 ....HDMI went through several interactions in years past. If your Denon had one of the older HDMI versions, it would not transmit audio, just video. Maybe that’s where the problem is.

nyccarguy

berri said:

aba - learned long ago that while the auto and airline industries are fascinating to follow, their stock is best left to frequent traders rather than long term investors. Personally, after reading quite a few business articles on this, I can't help wondering whether a big part of the Ford problem is articulating clearly where they are going. GM and FCA have done this better. But Ford may have two big issues they need to get a handle on; stale product line up and faltering international business. Other than niche players, the auto industry is global. As for their stock, I understand the bargain potential at under $10, but I'd like to see it over that threshold because many investment firms don't buy stocks priced that low and cumulatively, investment firms tend to make or break markets for a stock. Also, investors tend to look down the road rather than today, and despite the strong F-150, they don't see the rest of the company competitive in a few years without some significant changes and improvements.

i just checked. It is under $10 per share (near a 52 week low) paying a 6.2% Dividend. Comparatively, Toyota is trading at a little over $125 per share (1/2 way between 52 week high & 52 week low) paying a 3.56% dividend. Interesting times we live in for sure.

berri

I think Ford will turn it around, but high dividends in a cyclical industry are something historically you want to be cautious about investing in. You may make a nice profit down the road, but holding it too long will often underperform over the years. More than a few bought classic conservative retire with stocks in the past when they were down and paying a nice dividend. Eventually they got burned. Think GE, Sears, even the grocer A&P years back. I've been looking at possibly buying a Ford Edge. Some good deals and it seems like a nice vehicle. I like it. My caution though isn't Ford going BK, it is the deal versus the depreciation. When you net it out, something like a Highlander ends up a better choice.

Michaell

@abacomike - sorry, I disagree about Ford. There is no "divine right of corporations". Look at the companies that had a stranglehold on their market, only to lose their way:

Montgomery Ward
Polaroid
Kodak
Digital Equipment Corp

Even IBM, my former employer, has had a brush with death in the early 1990's. And, they are struggling now with this whole "cloud" approach and AI. Watson started out as a gimmick, then IBM has spent years trying to figure out how to monetize the research. Not going well, and IBM is laying off thousands of people in the process, even from companies that they recently purchased and were considered part of their new "core" businesses.

If Ford can't adapt to a changing market, or if they bet too big on strategies that don't pan out, I could see someone swooping in and buying the valuable assets (F-150) and discarding the rest.

pensfan83

You can add Sears, Toys R' Us, Circuit City, etc. to that list too. A few years ago wasn't Best Buy also closing stores and going down the wrong path only to reinvent themselves, stabilize, and become a mainstay again?

The Craftsman brand was highly recognizable and resonated with folks so someone snapped it up. With Sears Holdings hanging on by a thread I wouldn't be surprised to see the Kennmore brand auctioned off in the near future too.

Michaell

pensfan83 said:

You can add Sears, Toys R' Us, Circuit City, etc. to that list too. A few years ago wasn't Best Buy also closing stores and going down the wrong path only to reinvent themselves, stabilize, and become a mainstay again?

The Craftsman brand was highly recognizable and resonated with folks so someone snapped it up. With Sears Holdings hanging on by a thread I wouldn't be surprised to see the Kennmore brand auctioned off in the near future too.

Yep, the increased focus on on-line shopping has been a death blow to many retailers.

I read an article about Best Buy's turnaround - was fascinating to see how they countered Amazon.

Sears was the go to place for my folks when I was a kid. I remember my mom ordering from the catalog and having to go to the store and pick it up.

Gee, isn't that what Kroger / Target / etc. are doing now? Shorter timeline, of course, but the same basic concept.

Interesting that FCA hasn't been in the news much since Sergio Marchionne passed away. Another company too highly focused on a single market segment.

snakeweasel

nyccarguy said:

aba - learned long ago that while the auto and airline industries are fascinating to follow, their stock is best left to frequent traders rather than long term investors. Personally, after reading quite a few business articles on this, I can't help wondering whether a big part of the Ford problem is articulating clearly where they are going. GM and FCA have done this better. But Ford may have two big issues they need to get a handle on; stale product line up and faltering international business. Other than niche players, the auto industry is global. As for their stock, I understand the bargain potential at under $10, but I'd like to see it over that threshold because many investment firms don't buy stocks priced that low and cumulatively, investment firms tend to make or break markets for a stock. Also, investors tend to look down the road rather than today, and despite the strong F-150, they don't see the rest of the company competitive in a few years without some significant changes and improvements.

i just checked. It is under $10 per share (near a 52 week low) paying a 6.2% Dividend. Comparatively, Toyota is trading at a little over $125 per share (1/2 way between 52 week high & 52 week low) paying a 3.56% dividend. Interesting times we live in for sure.

IIRC Toyota has somewhere between 20 and 25 million outstanding shares while Ford hovers around 4 billion outstanding shares.

qbrozen

snakeweasel said:

thebean said:

How about this for @jmonroe1's mug shot?

That begs the question, what do the other posters here look like? Is this oldfarmer50?

Oh, you just had to ask. Here I am.

pensfan83

Michaell said:

Sears was the go to place for my folks when I was a kid. I remember my mom ordering from the catalog and having to go to the store and pick it up.

Same with mine, they were very loyal to Sears when I was growing up before other companies came into the picture. They have had Kennmore appliances for as long as I remember and there's a fair amount of Craftsmen tools dotting my dad's workbench, some inherited from his father. When my parents built their current house in the mid-90's the default appliance brand for that builder was GE but they requested Kennmore appliances. When they renovated the kitchen about 7-8 years ago they replaced appliances with...you guessed it, Kennmore.

tjc78

qbrozen said:

snakeweasel said:

thebean said:

How about this for @jmonroe1's mug shot?

That begs the question, what do the other posters here look like? Is this oldfarmer50?

Oh, you just had to ask. Here I am.




What a great movie.

Mr_Shiftright

Michaell said:

@abacomike - sorry, I disagree about Ford. There is no "divine right of corporations". Look at the companies that had a stranglehold on their market, only to lose their way:

Montgomery Ward
Polaroid
Kodak
Digital Equipment Corp

Even IBM, my former employer, has had a brush with death in the early 1990's. And, they are struggling now with this whole "cloud" approach and AI. Watson started out as a gimmick, then IBM has spent years trying to figure out how to monetize the research. Not going well, and IBM is laying off thousands of people in the process, even from companies that they recently purchased and were considered part of their new "core" businesses.

If Ford can't adapt to a changing market, or if they bet too big on strategies that don't pan out, I could see someone swooping in and buying the valuable assets (F-150) and discarding the rest.

Yeah but those companies totally had their heads in the sand. I mean, Kodak just abandoned the digital camera market right at its onset. "NAH, that'll never catch on!"

Even IBM almost bit the dust when they decided "Who wants a personal computer in their HOME?"

I don't see Ford being that much of a Luddite. I'd be paying more attention to very large institutional investors, to see how they are behaving, not private investors who throw money in the Tesla Currency Furnace for instance. Tesla's stock price is absurd.

dino001

Michaell said:

@abacomike - sorry, I disagree about Ford. There is no "divine right of corporations". Look at the companies that had a stranglehold on their market, only to lose their way:

Montgomery Ward
Polaroid
Kodak
Digital Equipment Corp

Even IBM, my former employer, has had a brush with death in the early 1990's. And, they are struggling now with this whole "cloud" approach and AI. Watson started out as a gimmick, then IBM has spent years trying to figure out how to monetize the research. Not going well, and IBM is laying off thousands of people in the process, even from companies that they recently purchased and were considered part of their new "core" businesses.

If Ford can't adapt to a changing market, or if they bet too big on strategies that don't pan out, I could see someone swooping in and buying the valuable assets (F-150) and discarding the rest.

Ford is far from going under, but lowered credit rating simply reflects an opinion about the risk of not paying its all obligations in the future, including very distant one. It's usually based on stress scenarios, from global economic downturn, to country-specific issues and how it can affect overall company's ability to pay its current debt. Ford's profitability is currently under pressure, its models are old and tired (in comparison to say GM), its strategy appears a bit erratic (plans to ditch passenger cars from the US lineup have a smell of desperation, IMHO) and it did not "enjoy" a hard reset, GM had during bankruptcy. All these things are fixable, but require money, which Ford will have to borrow. However, we are on the other side of peak auto (which btw was delayed by one year due to Harvey/Irma), making payoff for those lineup investments even riskier. It already has high fixed costs, if the sales drop even more (say we go into more serious auto downturn due to saturation, or recession) and Ford is in the middle of big spending spree, the situation can get much more dicey for them. Rating agencies have to weigh those kind of risk scenarios and run stress-tests on finances of the companies before the actual stress happens.

To say, it will always work for them, because it did before, is ignoring the history. Graveyards are full of companies that did not survive the downturn, whether because of the cycle, or competition. How many car brands worldwide disappeared in last 30 years? How many of them changed owners, sold at the bottom, rather than top? Just recently, Opel was a German brand owned by an American company, since before World War II, I believe. Today it's a French owned company and who knows if they even keep it around. They have Peugeots, Citroens to sell and Opel/Vauxhall are in the same brand segments. The only reason to keep those would be to sell it to Germans, Brits (perhaps Australians, if French actually bought that, too), and certain Eastern Europeans, who won't buy French car. But I can see Opel/Vauxhall pulling from other markets, especially emerging markets in Africa and Asia, where Peugeot and Citroen have stronger presence and traditions from colonial times.

dino001

nyccarguy said:

berri said:

aba - learned long ago that while the auto and airline industries are fascinating to follow, their stock is best left to frequent traders rather than long term investors. Personally, after reading quite a few business articles on this, I can't help wondering whether a big part of the Ford problem is articulating clearly where they are going. GM and FCA have done this better. But Ford may have two big issues they need to get a handle on; stale product line up and faltering international business. Other than niche players, the auto industry is global. As for their stock, I understand the bargain potential at under $10, but I'd like to see it over that threshold because many investment firms don't buy stocks priced that low and cumulatively, investment firms tend to make or break markets for a stock. Also, investors tend to look down the road rather than today, and despite the strong F-150, they don't see the rest of the company competitive in a few years without some significant changes and improvements.

i just checked. It is under $10 per share (near a 52 week low) paying a 6.2% Dividend. Comparatively, Toyota is trading at a little over $125 per share (1/2 way between 52 week high & 52 week low) paying a 3.56% dividend. Interesting times we live in for sure.

That dividend will be first thing to go (partially or fully), if finances deteriorate. All it takes is total US market losing sales of say million cars per year for couple of years and it can go very, very wrong. The fact, that the dividend went so high (due to the stock drop, not increases in the payment per share) is a signal that Mr. Market thinks it may be in danger.

tifighter

graphicguy said:

I have a Thorens turntable, still. It’s not the one I originally had, but one I picked up used. I’ve rebuilt it and use it.

A vinyl setup isn’t for casual listening. Each album is 15-20 minutes per side. So, unless you are sitting in your chair, planning on flipping or digging through your vinyl collection for a longer term listening event, vinyl isn’t the format you want.

That said, there’s a certain satisfaction in digging through an album collection, finding long lost gems, cleaning the record, putting it on the turntable, lowering the tone arm/stylus and listening for several minutes. Did it all the time in college.

I probably should do that more often. But, I usually don’t and have to be in a “mood” to do it.

@graphicguy That describes it to a T. It's a relaxing thing and I enjoy the whole process around vinyl. But you do really have to be in the mood. And a glass of wine never hurts. I replaced my Thorens table with a Rega RP6 a few years ago to round out a whole Rega lineup. Well, if you don't count that ugly Sonos thing that I wish was available in black-

dino001

I just looked at basic financials of Ford:

1. Assets: $258B, Liabilities: $226B. It's positive, but if you consider that book value of an asset is not the same as a market value of one that has to be sold in distress (if that comes), this can be quickly flipped.
2. They have $115B in current assets (easy to liquidate at par value), vs. $152B in current debt, including long term debt that comes due, plus $22B accounts payable. This is not that pretty. Of course, they have huge cashflows, to cover a lot of those current payments, but they'll have to roll over a lot of debt soon.
3. They almost doubled their dividend this year - not very responsible move in light of peak auto, huge debt expenses. BTW, I was wrong about the source of that 6%+ dividend. It came not only from stock going down, it did come from the management raising it.

Income and cash flow statements do not look that great either:
1. Dividend is $1B+ per quarter ($4/year going out)
2. Quarterly cash flow dropped $1B y/y (15%), so did net income, also by $1B (but this is 50%). They made half of the profit with revenue lower by $1B than last year. BTW, they paid 40% less income tax in the same period. So: similar (but lower) revenue, lower taxes, half the net profit. Ouch.
3. They spend $17.5B last 12 months on capital expenditures, which is about 2.5 times their typical annual rate in last five years.
4. So, funny, that billion lost in revenue vs. last year is exactly billion lost in profit. So what happens if they lose another billion in revenue? Then the profit is zero. Another billion? You get the picture.

This goes on. No wonder credit agencies are not impressed. Again - this doesn't mean Ford is going under. It just means, it has much less room for an error and much more sensitivity to external issues and credit rating agencies had to weigh it all. It means Ford will pay more for its new debt and those who want out of its current bonds will have to take less. Does it mean the stock is a sell? Not necessarily, but beware for sure. Even if one believes it will be fine (and it may just be), one would be well advised not to put too much of their wealth into it right now.

Michaell

dino001 said:

Michaell said:

@abacomike - sorry, I disagree about Ford. There is no "divine right of corporations". Look at the companies that had a stranglehold on their market, only to lose their way:

Montgomery Ward
Polaroid
Kodak
Digital Equipment Corp

Even IBM, my former employer, has had a brush with death in the early 1990's. And, they are struggling now with this whole "cloud" approach and AI. Watson started out as a gimmick, then IBM has spent years trying to figure out how to monetize the research. Not going well, and IBM is laying off thousands of people in the process, even from companies that they recently purchased and were considered part of their new "core" businesses.

If Ford can't adapt to a changing market, or if they bet too big on strategies that don't pan out, I could see someone swooping in and buying the valuable assets (F-150) and discarding the rest.

Ford is far from going under, but lowered credit rating simply reflects an opinion about the risk of not paying its all obligations in the future, including very distant one. It's usually based on stress scenarios, from global economic downturn, to country-specific issues and how it can affect overall company's ability to pay its current debt. Ford's profitability is currently under pressure, its models are old and tired (in comparison to say GM), its strategy appears a bit erratic (plans to ditch passenger cars from the US lineup have a smell of desperation, IMHO) and it did not "enjoy" a hard reset, GM had during bankruptcy. All these things are fixable, but require money, which Ford will have to borrow. However, we are on the other side of peak auto (which btw was delayed by one year due to Harvey/Irma), making payoff for those lineup investments even riskier. It already has high fixed costs, if the sales drop even more (say we go into more serious auto downturn due to saturation, or recession) and Ford is in the middle of big spending spree, the situation can get much more dicey for them. Rating agencies have to weigh those kind of risk scenarios and run stress-tests on finances of the companies before the actual stress happens.

To say, it will always work for them, because it did before, is ignoring the history. Graveyards are full of companies that did not survive the downturn, whether because of the cycle, or competition. How many car brands worldwide disappeared in last 30 years? How many of them changed owners, sold at the bottom, rather than top? Just recently, Opel was a German brand owned by an American company, since before World War II, I believe. Today it's a French owned company and who knows if they even keep it around. They have Peugeots, Citroens to sell and Opel/Vauxhall are in the same brand segments. The only reason to keep those would be to sell it to Germans, Brits (perhaps Australians, if French actually bought that, too), and certain Eastern Europeans, who won't buy French car. But I can see Opel/Vauxhall pulling from other markets, especially emerging markets in Africa and Asia, where Peugeot and Citroen have stronger presence and traditions from colonial times.

Actually, I just saw an article on Bloomberg that showed Opel turning a profit this past quarter. Vauxhall is next to get the attention from PSA.

Ah, here we go:

https://www.bloomberg.com/news/articles/2018-07-24/psa-first-half-profit-surges-on-higher-car-sales-cost-cuts

dino001

Interesting. GM couldn't turn profit in Opel to save its life.

berri

It would be interesting to see if Opel is taking some share from other French brands. I think Opel is probably accretive though because I think Peugeot is mostly up market from Opel and Citroen is further upmarket. But not sure as I don't really follow European autos these days.

dino001

berri said:

It would be interesting to see if Opel is taking some share from other French brands. I think Opel is probably accretive though because I think Peugeot is mostly up market from Opel and Citroen is further upmarket. But not sure as I don't really follow European autos these days.

That's how it used to be, but PSA came with brilliant idea to move Citroen into the lower segment. Completely ridiculous, IMHO. Citroen was in 60s one of the most innovative and forward thinking companies. Their cars were also beautiful. The buyer of course didn't care as much and they were eaten. PSA initially kept them in similar vein (I remember in 90s Citroen ZX, or something like that was still a great futuristically looking upscale sedan), but now they were diluted to the point that it's all about small subcompact segment, not the upscale limousine.

It's also an issue of nationalistic buyers in France and Germany (not much overlap). They (Opel vs. rest of PSA) compete quite directly in other countries, European or ROW, though.

bwia

berri said:

It would be interesting to see if Opel is taking some share from other French brands. I think Opel is probably accretive though because I think Peugeot is mostly up market from Opel and Citroen is further upmarket. But not sure as I don't really follow European autos these days.

How ironic, Opel was unprofitable under GM management but is profitable manufacturing the Buick Regal GS. Go figure. 

bwia

With respect to Ford and President Trump's asinine approach to international trade and tariffs on aluminum and steel ... this is but a death sentence for Ford.

dino001

bwia said:

berri said:

It would be interesting to see if Opel is taking some share from other French brands. I think Opel is probably accretive though because I think Peugeot is mostly up market from Opel and Citroen is further upmarket. But not sure as I don't really follow European autos these days.

How ironic, Opel was unprofitable under GM management but is profitable manufacturing the Buick Regal GS. Go figure. 

It's probably about the price point that those vehicles could command in Europe. Opel was a real laggard vs. its peers in term of sales and appeal. Lots of aspirations, not a great execution, high German labor cost (at least on some models). To sell they had to price it below VW, even Ford. Astra could not touch Golf/Jetta or Focus, Corsa did even worse against Polo and Fiesta, Insignia (Buick here) was also relegated to fleet vehicle of a proverbial regional sales rep and lower middle manager. Fleet vehicle. This might not have been fair, but it was the fact of life.

I wonder if the profitability was achieved by better sales, or a flying axe.

dino001

bwia said:

With respect to Ford and President Trump's asinine approach to international trade and tariffs on aluminum and steel ... this is but a death sentence for Ford.

Overall, if you account much lower corporate taxes, the total is still positive, but the issue is more in the sentiment plus additional threats now on parts and vehicles imported from Canada and Mexico (reportedly we have a "deal" with the latter, but we shall see).

berri

If the tariff stuff goes on over time I think it will ironically hurt Detroit more than Asian brands and the south may get hurt in some of its transplants. That's why I think the reality is mostly showmanship. But I guess we'll see down the road. At some point if goods and services keep spiraling in costs (including housing) and wages remain dampened it will spell stagflation.

roadburner

dino001 said:

Overall, if you account much lower corporate taxes, the total is still positive, but the issue is more in the sentiment plus additional threats now on parts and vehicles imported from Canada and Mexico (reportedly we have a "deal" with the latter, but we shall see).

Politics aside, I don't agree with tariffs when they are used to protect a domestic industry. However, if Country A has a 25% tariff on imported cars, I don't have a problem with the U.S. slapping the same 25% tariff on cars from Country A.

nyccarguy

roadburner said:

dino001 said:

Overall, if you account much lower corporate taxes, the total is still positive, but the issue is more in the sentiment plus additional threats now on parts and vehicles imported from Canada and Mexico (reportedly we have a "deal" with the latter, but we shall see).

Politics aside, I don't agree with tariffs when they are used to protect a domestic industry. However, if Country A has a 25% tariff on imported cars, I don't have a problem with the U.S. slapping the same 25% tariff on cars from Country A.

In my business, the tariffs are being used to "protect" a domestic industry that is already damn close to a monopoly (the son of one company married the daughter of the other). It has put some very hardworking, honest, tax paying people out of business.

henryn

Michaell said:

Even IBM, my former employer, has had a brush with death in the early 1990's. And, they are struggling now with this whole "cloud" approach and AI. Watson started out as a gimmick, then IBM has spent years trying to figure out how to monetize the research. Not going well, and IBM is laying off thousands of people in the process, even from companies that they recently purchased and were considered part of their new "core" businesses.

I have been reading Robert X Cringely since the mid-80s, better than 30 years now. I started when he and Peter Norton each had a regular column in -- what was the name of that magazine, "Infoworld" I think. Cringely is a close follower of IBM, he has written a book about them, and many of his columns and newsletters have been on that subject. I always pay attention to whatever I encounter about IBM, I made a living for many years programming on IBM mainframes.


Cringely has a lot to say about the current mess IBM is in.

tbirdmarco

 I’m still around everyone, I’ve been enjoying reading everything on and off in here every few days little by little. Unfortunately we got to do what we got to do when it comes to final arrangements that’s wife for you. How’s everyone been doing in here. I am still jobhunting still working at the old job. Haven’t been on any interviews lately. I think my best bet is to go to a trade school and get some more schooling. And we have high school now. Have to wait for my job 

tbirdmarco

 I have to wait for my job to lay me off though before I do that, then at least can get unemployment and then maybe get the school paid for through the state. That’s my best bet want to go for something in the computer field, I know there’s many avenues to go down with that. The Thunderbird is finally on the road. Now the problem is finding reliable driver to go with me to the remaining shows of the season. 

Michaell

henryn said:

Michaell said:

Even IBM, my former employer, has had a brush with death in the early 1990's. And, they are struggling now with this whole "cloud" approach and AI. Watson started out as a gimmick, then IBM has spent years trying to figure out how to monetize the research. Not going well, and IBM is laying off thousands of people in the process, even from companies that they recently purchased and were considered part of their new "core" businesses.

I have been reading Robert X Cringely since the mid-80s, better than 30 years now. I started when he and Peter Norton each had a regular column in -- what was the name of that magazine, "Infoworld" I think. Cringely is a close follower of IBM, he has written a book about them, and many of his columns and newsletters have been on that subject. I always pay attention to whatever I encounter about IBM, I made a living for many years programming on IBM mainframes.


Cringely has a lot to say about the current mess IBM is in.

I discovered Cringely a few years back.

I'd suggest you read the ProPublica article on IBM from this past spring, as well. Good investigative journalism.

driver100

Michaell said:

@abacomike - sorry, I disagree about Ford. There is no "divine right of corporations". Look at the companies that had a stranglehold on their market, only to lose their way:

Montgomery Ward
Polaroid
Kodak
Digital Equipment Corp

If Ford can't adapt to a changing market, or if they bet too big on strategies that don't pan out, I could see someone swooping in and buying the valuable assets (F-150) and discarding the rest.

well said....remember the market leader..... Blockbuster boasted 9,000 locations in 2004. Now the major TV Networks are getting hammered by Netflix and Amazon. There is no loyalty....everyone is replaceable.

I remember a guy bought a $300000 franchise for a Motofoto place in town. He was busy for about 6 months before everyone started buying digital cameras.

oldfarmer50

stickguy said:

Farmer, they might rent more minivans if they did not charge 2-3 times as much as a full sized sedan for them.

JM, post a pic of the old red Genny. Just to remind you of the good old days.

Sandy, FYI if you have threads bookmarked that you no longer want, just click on the yellow star to turn it white, and the will drop off your bookmarks.

Not my department. I have no idea what Enterprise charges as i haven't rented a car since 2011. Now , if you were willing to pose as a family member, i could get you a 50% super secret hand shake discount. Of course, if caught I would have to disavow all knowledge of your actions.

oldfarmer50

jmonroe said:

oldfarmer50 said:

jmonroe said:

driver100 said:

stickguy said:

Sandy, you should create a spreadsheet for whoever is going to handle things. List your accounts, contacts, PWs, etc. For your credit cards, pension, 301k, life insurance, everything. When the time comes, makes it vastly easier on them.

usually when married the spouse just takes it all on though. everything we have is joint so no need to have one of the kids on anything. My dad though, after my mom passed away, he made everything joint with me (and various stuff in trust) so if something happens I can get to everything.

Stick...yes, if one goes the other spouse can take over.....more difficult if you both go at the same time. My wife always says, "What is the chance of that happening". And, I say, do you remember when the big garbage truck hit us....that could have been the day we both could have gone together!

I was wondering who this @Drivingfool was and it turned out he is really @sandman. If this was posted in the screw-ups that Edmunds created, I missed it. Maybe it wasn't conveyed on this board.

In any case, why didn't he go with @sandman2 or something like that so we'd recognize him or did Edmunds make him do this because they found out he is in Federal Witness Protection Program?

Sure is getting tough to recognize the regulars in. I have even noticed that several mug shots have changed. Seamless huh?

jmonroe

Sandy posted his change in CCBA. It`s funny that while i can't log in from my own device, when i use my son`s tablet they remember me and i come on unchanged from the old days.

So, tell us how you like this new change.

jmonroe

I don't. Unless I keep stealing my son's tablet I can't post here unless I spend hundreds of $$$$$$$.

dino001

roadburner said:

dino001 said:

Overall, if you account much lower corporate taxes, the total is still positive, but the issue is more in the sentiment plus additional threats now on parts and vehicles imported from Canada and Mexico (reportedly we have a "deal" with the latter, but we shall see).

Politics aside, I don't agree with tariffs when they are used to protect a domestic industry. However, if Country A has a 25% tariff on imported cars, I don't have a problem with the U.S. slapping the same 25% tariff on cars from Country A.

Even if not fully support, I can understand the sentiment. However, this can quickly escalate into something nobody remembers how it all started and nobody knows how to end.

Another thing, politicians, labor unions and managements of involved companies are often very disingenuous (to be charitable), when they cry foul over how foreign countries and their protections (that's not unique to America, of course, it's everywhere). Vehicles are actually a great example: everybody and their brother now knows how how unfair and evil European tariffs are on US passenger cars, but just mention to them "chicken tax" and see what they say... It is 25% duty on light trucks in force since 1964, which was imposed by the way in response on France's and Germany's tariffs on chickens (hence the name). Did you really think Big Three were this much better in SUVs and pickups than everybody else in the world, that was why nobody seriously challenged them for so long and everybody else making them uses facilities in the US (as opposed to cars, which often are imported)?
We can go industry, by industry - suddenly all that "unfair" foreign competition "killing" those oh-so-poor companies isn't so unfair after all. The old parable about seeing a grass in somebody's eye and ignoring the log in your own comes in mind.... For every bad tariff in EU we have our Chicken Tax, agricultural subsidy, or some other prohibition for foreign capital to start or purchase certain type of business in the US. It would be nice to make it all go away and let real advantages to play out, but it's not realistic to do it right away. We shouldn't believe (or at least be skeptical about) political/corporate talking points, or worse, completely uninformed spews from the Ignoramous. The truth is usually much more complicated by several orders of magnitude than 140 characters can ever express, even if they are dished out in series of twenties over the weekend. We should at least acknowledge that simple truth. The alternative is everybody screaming bloody hell on the others unfairness and wars of XVIII, XIX and XX centuries, inspired by merkantilists, to resume. Not just "trade wars". Hot wars with real people dying somewhere on a ship, hole in the ground, or under a rubble of a bombed house, cause that's how has ended then.

oldfarmer50

berri said:

Well Sandman, just remember what Mr. T said "I pity the "fool" Seriously, what the heck you viewed the mess as an opportunity.

OF50 - got the same inconsistencies between two computers and they are almost identical. But one works best with Bing and the other with Chrome for this application. After messing around with this defying logic, I realized - just go with the flow because it ain't worth more hassle.

While I realize that my obsolete IPad using Safari might benefit from a browser change I can't do that since the unit was originally set up by my autistic son and his equally disabled friend and nither one can remember the passwords needed to access the operating system. The thing is so outdated and corrupted by various adware gremlins that it's not much use for anything.

I'll replace it a some point but in the meantime I'll make do.

oldfarmer50

berri said:

So Ford has just had their debt rating reduced to one step above junk by Moody's and their stock has dropped to under $10. There are forecasts it will hit junk bond status within a year or so. Some attribute the mess to old and stale vehicles, as well as cost cutting QC effects on product. But Ford remains strong in trucks. The family super majority through their special stock shares allows the company to move easier than a normal corporation. If things don't change in the next few years, have to wonder about a merger possibility. The UAW will likely keep Honda out of it, but HyunKia has union in Korea and is weak in trucks. OTOH as long as Ford has cash, the family control makes Ford not nearly at the mercy of Wall Street as most publicly listed corporations. Any thoughts where this all may be headed?

I think if they can't make money with sedans they should form an association with someone who can. They did it with Mazda, Chrysler did it with Mitsubishi and GM did it with Suzuki et al. Right now they are using Ford Australia to bring back the Ranger pick up, why not someone else to produce sedans?

oldfarmer50

snakeweasel said:

thebean said:

How about this for @jmonroe1's mug shot?

That begs the question, what do the other posters here look like? Is this oldfarmer50?




I wish.