Ford has acquired a lot of foreign brands, and only Volvo makes them a lot of money. Land Rover is marginally profitable. Aston Martin is actually profitable, but low volume. Jaguar and the American brands are the boat anchors for Ford right now. Both Ford and GM have got to shrink the companies drastically to get profitable, and I believe Ford has to come out with some killer product to turn around. The 500 is an awesome car - but they made the mistake of making it very invisible, thinking that Americans by the Avalon because it's plain. That's wrong. They buy it because they have confidence in it. The 500 should have been made dramatically attractive - and also very well.
Except for Volvo and maybe Land Rover, I really don't see why Ford bought the rest of the companies. I think that money could have been better spent on the Ford products. The 500 is a awesome car? How is it awesome? It is about as bland and uninviting a car that has been made. Thank God they didn't name it Galaxie 500 or worse yet XL. We's have another "Charger" incident on our hamds.! LOL .
Have ya driven a 500? Aside from the looks, which I agree, are pathetic, it is extremely comfy, roomy in the extreme, from the back seat to the trunk, and sits nice and high. It handles like a Volvo, since it is actually one underneath, and it's about as good a value as you can find. If ONLY they had bothered to style it, inside and out. I think they should have named it Galaxie 500 myself......@!!!
VW/Audi's DSG gearboxes are actually made by Borg-Warner. I've read that there are plans to make them for other manufacturers. If that happens, I imagine royalties will flow back to VW Group since it's mostly an Audi design IIRC.
In an era of high fuel prices the DSG should catch on quickly as it's supposedly more efficient than either a Manual or TC Automatic.
I think the biggest problem with the Ford 500 is under the hood. The car is just plain slow, and that combined with the bland looks equals a totally forgettable car for most. Actually there is nothing "wrong" with the styling that a few front-end tweaks couldn't fix, along with a 3.5L 280hp Duratec V6.
The Avalon is ugly as hell to me, but at least it has a proper engine.
On Saturday, Andre1969 and I were on the way home from the Fall Carlisle Show. We stopped at a local Ford dealer, which had a Fusion SEL on the lot.
We were both impressed. The styling is quite nice in real life - particularly the front. The entire car has a neat, tidy appearance both inside and out that has been missing from too many domestic vehicles. The front is strong - it is bold, distinctive and will serve as a good template for future Fords.
It may not be the 21st century version of the 1949 Ford, but I believe that the Fusion will help keep Ford afloat. Unfortunately, it's going to take more than one hot vehicle to save Ford.
As for the Five Hundred - there's actually a lot to like, but unfortunately it's hidden under the super-sized Passat exterior and powered by an engine that is just too small to be "inspired" in this size of vehicle.
Ok I'll admit I havn't driven one. I'm sure it's a "comfy" car, but the looks gives me no inspiration to be interested in it. If they'd change the front end and gave it more power then maybe I would be.
Plus, if you actually drive one, you will also see that the "underpowered" is grossly exagerated. At least the CVT version, when floored will equal or better anythng in it's class, short of a few modern day "muscle" cars.
I agree that blandness isn't a huge handicap in the 500's market. The Avalon and Lacrosse are good examples of bland-mobiles. But I think you've got to have something (other than style) if you're going to stand out in this segment. AWD was a good idea, but apparently it hasn't been enough on it's own.
I think Chrysler did it right. The 300 is also strong competition for the same type of buyers who want larger cars. Nothing bland about the 300. Not only does the styling break the mold, the hemi engine goes a long way toward attracting new buyers to the segment.
Supposedly there was a shortage of AWD models earlier this year. Ford underestimated demand for them.
Another "hook" for the Five Hundred/Montego is the SUV-like seating height. The vehicle really is taller than the typical sedan. Apparently, that isn't enough, as Chrysler 300 buyers have shown that they will tolerate a low roof and gunslit side windows in exchange for style.
Ford would be disappointed if sales of the Five Hundred were only on the level of sales of the Chrysler 300. Ford is looking for BIG volume.
Big surprise coming in the form of sales news for September - Ford SUVs were WAY down (50%?). Overall sales were down by double digits. This is not unexpected, with employee pricing wiping out MY 2005 stock. I wonder how many of those sales they can make up with sales of the new Fusion. Will this be the next Ford to knock the Camry and Accord off their pedestal (the way the Taurus gave them a run for their money in the late 80s)?
And why oh why could Ford not ready the 3.5L V-6 to launch with the Fuson, better yet with the Five Hundred last year? They've been talking about this coming engine for years now.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
And why oh why could Ford not ready the 3.5L V-6 to launch with the Fuson, better yet with the Five Hundred last year? They've been talking about this coming engine for years now.
Could be that the performance is there but the mpg numbers were not making them warm and fuzzy. So they've been tweaking things on the engine to find a happy medium.
Anybody can drop a big block into a engine bay (*cough* hemi *cough*) and say "Look what we can do!" But to make it an all-around competitor (mph and mpg) in these times is a little more difficult.
I'm just glad Ford didn't go the route of Dodge and re-introduce their Hemi to the auto world. That's all we need is a Ford 500 with a 460 monster in it.
Well, to give Chrysler a little credit here, they did make the variable cylinder management standard on the Hemi, which netted them some mpgs, at least in the highway number.
But I agree, it is not easy bringing out a new engine you will be relying on for years. It just seems like Ford is slower at it than other manufacturers, in this case. Maybe they are just in the habit of announcing it earlier in the R&D cycle than others.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
The focus did? ok, but now they have cars like Scion to deal with. And I agree that it looks better than the Neon, which really needs an update. Don't forget the PT Cruiser. What's up with the Chevy PT Cruiser? The HHR. Talk about NOT being creative. About the Avalon (or Lacrosse). I have no idea why people would pay $30k for them. In that price range, there are a LOT of cars to choose from. BMW, Subaru, Acura, Audi, Saab, etc. Even the Kia Amanti looks much better. Mercedes C230. And talk about a wow factor - look at the new Mazdaspeed Mazda6. VW has beautiful cars. I'd risk the reliability concerns.
Just thinking about the other cars, I don't even care about Ford or GM. No excitement. No interest. $20k or $30k is too big an investment to not get jazzed up about. I don't understand why people like bland and boring. Suppose that's why I'm an engineer and not in marketing or PR.
is officially dead now, to be replaced early next year with the Caliber 5-door. Then the new Sentra will come along in the fall and make the Focus OFFICIALLY the oldest car in its segment. Don't tell me about the mild refresh they did either. That wasn't a revamp, the only thing they accomplished was to KILL the only really attention-grabbing Focus, the SVT.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
As I was watching MSNBC at lunchtime one of their analysts said that he predicted that at the rate the auto industry is going, both Ford and GM could potentially declare Chapter 11 bankruptcy two years from now.
I have but one question: Why? What has brought these giants so low?
Not to mention huge legacy costs (health care and pensions) created mostly by the generous benefits deals they gave the unions back at a time when the very notion of foreign competition was considered laughable by big three auto execs.
Now they have to make good on the deals they made, the unions won't have their benefits cut and ever-increasing foreign competition is a fact of life.
The only thing that's going to save them is to across the board start making cars that people actually want to buy, even without discounts. To say it's going to be tough for them is an understatement.
Supposedly the Focus will be revamped for in 2007 - which isn't soon enough.
The problem with Ford (and GM) is that too many people in important management positions have a feel for business as opposed to a feel for automobiles. They are more concerned about everything BUT making great vehicles. Hence, the emphasis on mergers and acquisitions, marketing, stock buybacks, management chart reorganizations, etc.
In short, just about everything except making great cars and trucks.
The foreign automakers also show more consistency. Honda, for example, has relied on two nameplates since the 1970s - the Civic and the Accord. And it has never let those nameplates grow stale. Every 4-5 years, we are treated to a thoroughly revamped Civic and Accord.
Buyers not only know what an Accord and Civic are, but they also know that they will be at or near the top of their respective segments. I've read that buyers looking for vehicles in these segments will automatically check out the Accord and Civic, even if they aren't set on buying one, because they know that those two vehicles set "the standard" in these classes. That means Honda saves on advertising costs (no need to pull buyers into the showroom, when they are coming anyway). It also shows that Honda has established a firm identity for the Accord and Civic.
Ford is now coming out with the Fusion, which, as I said above, looks great. And it is getting great reviews. But it will have to spend lots of money letting buyers know just what a Fusion is.
And what will happen to the Fusion down the road? Will it be a great car crippled by quality glitches and recalls (think Focus)?
Will Ford let it wither on the vine after its initial success, because it's more "cost effective" in the short run to spend less on regular revamps (think Taurus)?
If it doesn't sell well right away, will Ford immediately pull the plug, and switch to Plan B (think Freestyle)?
"VW has beautiful cars. I'd risk the reliability concerns. " I did exactly that in 2000 with the Passat- and got slapped in the face, then kicked in the kahoonas. :lemon:
I understand what your saying. I have purchased 2 cars in my life a Mazda and an Acura. I just don;t like the way GM cars look save for the Cadillac XLR which is a convertible in the 70,000 dollar range. The GMC Envoy looks good but thats a Big SUV that guzzles alot of gas so I wouldn;t buy that. The Pontiac G6 looks alot better than the Grand Am it replaced but I wouldn;t buy one over the Mazda 6. I like the Chevy Equinox SUV but again gas mileadge and Consumer Reports said the engine is old tech. Oh yeah the Chevy PT Cruiser wll the designer who used to work for Chrysler(Brian Nesbitt) came over to GM so thats why the Chevy HHR looks like the PT Cruiser.
As for Ford the 1996 Tarus I was was a sophmore in high school when that car came out and I used to get automobile magazine at that time. Automobile magazine had photo's of the 96 Tarus and as a real young person and my first reaction was like thats ugly. The 97-98 Mustang was a great looking car at that time though. The mid to late 90's Escort was too weird looking for me. However I do think the current Focus while I wouldn;t buy one was an improvement over the Escort it replaced. The Fusion will do better than the Tarus it replaced I think. I conclude by saying Ford is definately getting better in terms of judging the market in consumer taste in terms of exterior styling the last 5 years. In the mid 90's they try to be innovative with their styling and push the envelope but they turned off customers.
As for the Avalon and LaCorosse those cars are bought by older people in their 60 and 70's. Those cars are not young people cars. I'm sure an older person would not buy a Mazda 6 with the sport package.
As for VW I like the 02-05 Passats but the new one I'm kinda indifferent because of the way it looks. The new Jetta looks like a Toyota Corolla. The previous generation looked alot better.
I think GM might go into bankruptcy if they don;t put some good product out there soon. I think Ford will be ok. The have the Fusion coming out and a new Focus in a year(07 somebody said on this thread.) If i were Ford I would start pumping some R&D money to makeover Lincoln's image though.
Will Ford let it wither on the vine after its initial success, because it's more "cost effective" in the short run to spend less on regular revamps (think Taurus)?
That's always true for any Detroit car. When Lincoln LS came out, Ford promised it'd have a life cycle as regular as its competitors. So what happened? There will never ever be a 2nd LS. Ford is promising the same thing for 500 & Fusion.
Automakers tend to concentrate on things that earn them money. GM and Ford make big money on Silverado and F150, Suburban and Explorer, so those models get regular updates. GM and Ford pretty much lose money on every car they sell!
A friend of my dad's who had on of the first Hemi's said they weren't very reliable. I haven't hard anything like that wih this new one.
They had a lot of problems with detonation due to the shape of the heads. Today's computers have helped considerably.
I do wonder how an engine that can shut down 4 of it's 8 cylinders will last over time. Does it shut down the same cylinders all of the time? Or does it shift to the other 4 every other time? I would think that the cylinder bores and heads may become abnomally worn....along with all of the other moving parts that are removed form the combustion process.
I wasn't really referring to the $40000 and up cars Cadillac does make a nice one, I don't remember the model. But then again, for $70k there are some NICE cars out there! Nicer than the caddy.
"Not to mention huge legacy costs (health care and pensions) created mostly by the generous benefits deals they gave the unions back at a time when the very notion of foreign competition was considered laughable by big three auto execs."
That would be a big part of the "poor planning" I mentioned.
Grbeck did a good job of summing up the problems with their product. But I disagree with his assessment of their business sense. GM and Ford appear to lack any sort of foresight. (I think Chrysler is better in this regard.) It's like they have a good three-year plan, but nothing else on the shelf.
Examples include getting blind-sided by the hybrids. Or not having any kind of depth in the product line, so high gas-prices cut their sales in half. Not seeing what a bad idea it was to give the unions healthcare and production control would be another. Give them concessions? Yes! The union workforce has earned their pay. But what they conceded has more than doubled in value.
You Ford guys out there do you remember the old 300 straight-six engine that they used in the F-150s for many years? That has got to be one of the world's most, if not the most, durable engine ever. Why can't Ford make something like that again? I almost always see a 300-equipped truck that's been beat to hell and yet it's still running like a top.
I am still surprised about GM's products.. the new Impala and Equinox are the only Chevy I would ever look at... Pontiac has recently introduced very nice rars.. G6, Vibe, Solicite, Torrent(Equinox).. all great... but what is GM thinking with the new All GM Van/SUV... those things are ugly as night.. I cannot imagine people WANTING to buy them.. Moreover, GM surpises me by pulling down its foreign brands.. I think SAAB is losing under GM.. and I hope Subaru won't... GM exploits its interests in Daewoo so much they killed it.. and areslowly killing Suzuki (*maybe the new Vitara will help).. Opel is an OK european brand, but recently I feel they are losing ground..
To the contrast Ford is getting better.. as a Focus owner.. I am bitter at the decision not to bring the new Focus over the ocean.. appartently they think it would be too expemsive (doesn't seem to be out of range of Mazda 3 buyers)... whatever.. I think that was a bad decision..
However when you look at the new models from ford you can see how they are learning from their foreign brands. All 4 bangers are great Mazda engines. 500 has a great underpinnings because they are from volvo. Fusion is based on Mazda6, because it handles like a dream. They take the best things they have in the group and use them.. they still have a LONG way ahead, but I think thir are ion the right track.. especially last 2 years: - 500 got blamed for dullness, but it is a gtreat car, that is getting great reviews. AND Ford listened and is going to redesign it for 2007 - Freestyle is also dull, but it was a patch, that will become Meta One for Lincoln and replaced by a full fledged Fusion based Edge crossove wagon (with sharp styling) - 06 explorer is praised unanimously - Fusion is a very good car and I believe it will be a hit.. - they plan Edge, right along the lines of what they should do... bring a midize corssover/wagon (see Pacifica)... They have a plan and they are well on their way.. My only worry is their utter neglect of the Compacts segment.. I think if they believed in themselves, they could bring the new European focus.. and blow the doors off Corolla (maybe not Civic, but corolla definitely). I am affraid if they neglect focus for a couple omore years they will lose the young buyers that would later move to Fusion... I also hope they will maintiain the momentum, the way Chysler is trying to (despite the fact that I do not like a single Chrysler Group vehicle, they are planning well and thus doing well)
I think GM needs to look what others are doing to survive.
Actually, the Duratec V-6 is a pretty durable engine, from what I've read. If nothing else, it has helped erase the memory of the awful 3.8 V-6 and its faulty head gaskets.
Plus, I wonder if part of the old 300 I-6's "durability" really stemmed from its relative simplicity (like many old engines). It was probably very cheap to repair and maintain, so it made sense to keep it running, even if it did break down.
On GM yeah they have never been a standout in the mini-van category so I;m with you there.
With foreign brands thst GM purchased like Daweoo they were already in trouble even before GM bought them so I am not blaming GM directly for Daweoo's miss doings. Well Subaru I don;t like that ugly nose that they started putting on their cars recently. Finally, Saab they have been behind their European and even rival Japanese Luxury Brands for years. They just don't have a good following like Acura, Lexus, BMW, and Mercedes Benz do. Why did they even base their new SUV (the 9-7)on a platform used by the Chevrolet Trailblazer? saab sales are up from last year though.
On the subject of Ford I don't think Ford is going to redesign the 500 in 2007 its more like a mid-cycle refresh I would think. 2 years into a model cycle is too early for a redesign. I do think the Freestyle is dull as well. As for the Focus somebody on this board said it will come out supposedly as an 07 model. I agree the current Focus is 6 years old now which is too old nowadays in the auto industry for a single model to lag on without a redesign.
I agree Chrysler is doing well but like yourself their vehicles aren't my style.
Remember the Cadillac V-8-6-4 of the 80's? It had a reputation of catchng on fire when it changed the number of cylinders. I'm not sure which was worse for Caddy, that engine ir the diesels!
that by July 1, 2006, either GM or Ford will file Chapter 11, for the sole purpose of voiding union contracts, forcing employees and retirees to pay at least 50% of any health care premiums, with high deductibles to boot, and they will jettison their pension plans...whether you think they earned it or not, it will be gone, much sooner than you think...I also believe that Delta and Northwest Ch 11 will make the automakers move faster than they otherwise would...if I was a UAW retiree, I would start lining up a part-time job now, as their pensions will be cut by at least 50%... :shades: :shades:
varmint, you are right that GM and Ford lack long-term business sense, although I do think that Ford has been slightly better at this than GM lately. William Clay Ford, Jr., had to override several of this top managers and move forward with the Escape/Mariner Hyrid...looks as though he was now the smart one, atlhough Ford doesn't seem to be promoting it too much. Which is a missed opportunity.
When I talked about business abilities, I meant from the standpoint of executing all sorts of fancy plans and programs that look on paper and would impress a business school professor. Both companies can't seem to stick with a plan over the long term, unless we consider constantly obsessing over next quarter's stock price and profits to be a long-term plan.
Marsha, it is my understanding that a company can't just go to court and automatically receive a declaration of bankruptcy. The judge will look at assets, cash reserves and cash flow. Plus, interested parties can contest the request for bankruptcy, as the UAW and the suppliers would surely do.
Given the impact of a GM or a Ford bankruptcy on the government's pension fund guaranty program, as well as the loss of health care benefits by thousands of retirees and the hit that would be taken by already weakened suppliers, any objection to a declaration of bankruptcy would be examined carefully, unless the company really is at the end of its rope. I don't think either GM or Ford will reach that point by July 2006, unless the auto market really tanks in the coming months.
If one company does file for bankruptcy, it takes the heat off the other one. There are three main problems plaguing GM and Ford:
1. lackluster management; 2. overcapacity in the North American auto market; 3. a stubborn union.
A bankruptcy filing by one company would help the other on points two and three. The company that files for bankruptcy would experience a sudden drop in sales, as many people still equate bankruptcy with "going out of business." It's one thing to buy an airline ticket from a bankrupt company, especially since the public pretty much ignores stories about airline bankruptcies at this point.
It's quite another to sign up for a five-year loan on a new vehicle with the knowledge that the company (or the dealer, for that matter) may not be around to service it or honor the worry. Plus, a new vehicle is still an "image" purchase, so many people would be reluctant to buy one from a company perceived as a loser.
Since many GM and Ford customers are domestic loyalists, they would be quite likely to switch to the other company's offerings.
A declaration of bankruptcy would also probably kill off the weaker brands of the company that files for it - Buick, Pontiac and Saturn at GM; Lincoln and Mercury at Ford. Even if the reorganized company tried to keep those brands, they are too weak to withstand the drop in sales that would inevitably come with a declaration of bankruptcy.
As for the unions - assuming that the bankrupt company keeps operating, it will be operating with a much lower cost structure. You'd better believe that the OTHER company will demand similar concessions from the union regarding health care benefits, the jobs bank and plant closures. A chastened union would have no choice but to grant those terms. So the other company will benefit from the first company's action.
I see GM filing before Ford. Judging by recent actions on Wall Street, the financial community apparently sees GM as the shakier of the two companies. Plus, a bankruptcy filing would wipe out Ford family's stake in the company. That gives the company an extra reason to do whatever necessary to avoid a bankruptcy filing.
Reminds me of the old joke about two men running from a hungry bear. The one man says, "We have to outrun that bear." The other replies, "No, I just have to outrun YOU."
Ahem, CHRYLSER is better at foresight??? The only company with more cycles of boom & bust than Chrysler has had, was Packard. Maybe with DCX, things will be different, but I disagree that Chrysler has had a plan in the past. Here's my take: GM that elephant just can't tap dance - they plod. Ford, short term CEOs mean short term thinking and planning, and they have their good decades and their bad ones. Chrysler has been bankrupt twice. What else can I say?
LOL! Okay, you've got me there. Historically, Chrysler has been poor at planning. But I do think they have been making better decisions recently.
When the small SUV fad began developing in the late 1990's Chrysler was early on the scene (for a domestic) with the PT Cruiser. Notice they didn't tackle the industry head-on. Instead they created something functionally similar but with a twist.
For the past few years, it has been forecast that the era of trucks will begin to wane. Chrysler responded with the 300. Not a Camcord-fighter, but a car with a twist. They even created a wagon Americans would buy.
Chrysler was also insightful when they created the first Durango. Since people were buying SUVs instead of vans, why not give them an SUV with a van's 3rd row seat? Again, a mid-size SUV with a twist. (However, I believe the second Durango was not such a good move.)
Ditching the old-school design of the Cherokee and replacing it with the more refined Liberty was a big gamble. The old clunker had a very loyal following. But that turned out to be another smart move.
When I look at Chrysler, I see more successful responses to market trends and responses that come faster. I also see them leading new trends, rather than relying on reactions to what everyone else is doing.
Without Mazda to develop a small SUV or a mid-size family sedan, Ford would be in even rougher shape. I mean, the Escape/Tribute design was a joint effort, but it took Mazda quite a bit of talking to convince Ford that they should go with something car-based. GM is in even worse shape when it comes to picking horses... Witness the Aztek.
Neither GM nor Ford will file bankruptcy in this decade. While they are currently doing badly, they are not doing badly enough to warrant Chapter 11 filing. Look at Chrysler - 2 years ago they had a quarter where they lost $1 billion, just like GM. Now they're doing fine. Not to mention the vast amount of cash each of these companies have on hand. Just not going to happen.
I agree that neither will likely file chp. 11, but whenever someone mentions the "vast amounts of cash", I feel the need to point out they also have vast amounts of debt. :sick:
...that doesn't mean anything. Take me, I have a fairly large mortgage, but I have enough cash on hand to invest, buy things, take the ocassional nice vacation. If I had to pay that mortgage off today, then yeah, I'd have to go bankrupt or sell my house. But I don't have to.
- Freestyle is also dull, but it was a patch, that will become Meta One for Lincoln and replaced by a full fledged Fusion based Edge crossove wagon (with sharp styling)
We'll see how the Edge really turns out. Today's Freestyle is much different then the concept car, better I think because I like plain, simple cars without the flash just for the sake of flash...call me dull!
"Ford is now coming out with the Fusion, which, as I said above, looks great. And it is getting great reviews. But it will have to spend lots of money letting buyers know just what a Fusion is."
Yeah but Ford has gotten alot of letters from what I've heard sent to them from people that are interested in the Fusion. A big company like Ford if they have a product that attracts people they will come to the showroom.
"And what will happen to the Fusion down the road? Will it be a great car crippled by quality glitches and recalls (think Focus)?"
That has been a serious problem with Ford's first year models. Even Consumer Reports said something in their latest issue about Ford struggling with first year models that have resulted in poor reliability ratings. Over the last few years Ford has had First year problems with the Focus(first 2 years), Escape, Navigator, and Expedition. The Focus and Escape are up to above average in reliability. The Navigator since the 02 redesign has rated worse than average reliability. The Expedition with the 03 redesign is rated worse than average in reliability. Of course the 04 Expedition like other 04 models that CR rated in their latest big issue only had a total of 3,000 miles on them and were last surveyed on March 31, 2004.
In an abstract sense, you are right...a company cannot just walk in and declare bankruptcy for the hell of it...but I believe you are not correct in this instance, and I will state why...
Side note: when I say bankruptcy, I mean Chapter 11, where a company will usually keep operating, like Delta, United Airlines, etc., but they use Ch 11 to shed debt, pension plans, and union contracts to which they never should have agreed in the first place, IMO...so GM and Ford would keep operating as a viable business, altho they do have the option of liquidation, but they will not do that...end side note...
You are not correct, IMO, because of their true financial situation...I believe that GM has about $18 billion in cash, Ford about $4-5 billion...that seems like a lot, but GM's debt is about $240 billion and Ford's debt is about $125 billion...if YOU had $18 billion in the bank and debts of $200 billion-plus, you are actually beyond insolvent, you are so deep under water that you may be sitting on the ocean floor...
Add to that debt the underfunded pension obligations of over $5 billion, growing retiree health costs (that factor will slow as retirees will be forced to pay for their own health insurance, or at least pay 50% of the premium), and as current employees also are forced to pay for a substantial portion of their health insurance, probably 50-75%...
So, the filing of a Ch 11 is actually a piece of cake, as all you need is debts far in excess of your ability to repay...that $18 billion in the bank is chicken feed compared to the outstanding debt of GM...
That's why I believe you are wrong, as you see the cash in the bank but not the total crushing debt these companies both have...
Ford has had some first-year issues for sure - but BMW has had about 18 recalls on the X-5, you know, far more than Ford had even on the Focus, their recall king - for some wierd, inexplicable reason, C/R never seems to mention or notice that.... But let Ford or GM have a recall, and it's front cover news.
Ford also puts out some outstanding launches, like the last two new F-150s. Flawless introductions. The 500 has been a flawless intro of a new model. So, it depends, which is one of the strange things about Ford. I've never understood how the same company can produce amazingly dependable cars like the Crown Victoria, and the Taurus at the same time...
Unfortunately, I don't think the Fusion/Milan will generate enough profits to pull Ford's bacon out of the fire, although it would certainly be a big morale booster (at both the corporate and dealer level) if the cars are a hit. They certainly look good.
Comments
plans to make them for other manufacturers. If that happens, I imagine royalties will flow back to VW Group since it's mostly an Audi design IIRC.
In an era of high fuel prices the DSG should catch on quickly as it's supposedly more efficient than either a Manual or TC Automatic.
2001 BMW 330ci/E46, 2008 BMW 335i conv/E93
The Avalon is ugly as hell to me, but at least it has a proper engine.
M
We were both impressed. The styling is quite nice in real life - particularly the front. The entire car has a neat, tidy appearance both inside and out that has been missing from too many domestic vehicles. The front is strong - it is bold, distinctive and will serve as a good template for future Fords.
It may not be the 21st century version of the 1949 Ford, but I believe that the Fusion will help keep Ford afloat. Unfortunately, it's going to take more than one hot vehicle to save Ford.
As for the Five Hundred - there's actually a lot to like, but unfortunately it's hidden under the super-sized Passat exterior and powered by an engine that is just too small to be "inspired" in this size of vehicle.
Ford like GM has a 0 to 60 mentality. With the price of fuel and no site of lower fuel prices in the future there needs to be a change.
I think Chrysler did it right. The 300 is also strong competition for the same type of buyers who want larger cars. Nothing bland about the 300. Not only does the styling break the mold, the hemi engine goes a long way toward attracting new buyers to the segment.
Another "hook" for the Five Hundred/Montego is the SUV-like seating height. The vehicle really is taller than the typical sedan. Apparently, that isn't enough, as Chrysler 300 buyers have shown that they will tolerate a low roof and gunslit side windows in exchange for style.
Big surprise coming in the form of sales news for September - Ford SUVs were WAY down (50%?). Overall sales were down by double digits. This is not unexpected, with employee pricing wiping out MY 2005 stock. I wonder how many of those sales they can make up with sales of the new Fusion. Will this be the next Ford to knock the Camry and Accord off their pedestal (the way the Taurus gave them a run for their money in the late 80s)?
And why oh why could Ford not ready the 3.5L V-6 to launch with the Fuson, better yet with the Five Hundred last year? They've been talking about this coming engine for years now.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Could be that the performance is there but the mpg numbers were not making them warm and fuzzy. So they've been tweaking things on the engine to find a happy medium.
Anybody can drop a big block into a engine bay (*cough* hemi *cough*) and say "Look what we can do!"
But to make it an all-around competitor (mph and mpg) in these times is a little more difficult.
I'm just glad Ford didn't go the route of Dodge and re-introduce their Hemi to the auto world. That's all we need is a Ford 500 with a 460 monster in it.
hmmmm...no....nevermind
But I agree, it is not easy bringing out a new engine you will be relying on for years. It just seems like Ford is slower at it than other manufacturers, in this case. Maybe they are just in the habit of announcing it earlier in the R&D cycle than others.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Just thinking about the other cars, I don't even care about Ford or GM. No excitement. No interest. $20k or $30k is too big an investment to not get jazzed up about. I don't understand why people like bland and boring. Suppose that's why I'm an engineer and not in marketing or PR.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I have but one question: Why? What has brought these giants so low?
Bad product, followed by lack of planning.
Now they have to make good on the deals they made, the unions won't have their benefits cut and ever-increasing foreign competition is a fact of life.
The only thing that's going to save them is to across the board start making cars that people actually want to buy, even without discounts. To say it's going to be tough for them is an understatement.
The problem with Ford (and GM) is that too many people in important management positions have a feel for business as opposed to a feel for automobiles. They are more concerned about everything BUT making great vehicles. Hence, the emphasis on mergers and acquisitions, marketing, stock buybacks, management chart reorganizations, etc.
In short, just about everything except making great cars and trucks.
The foreign automakers also show more consistency. Honda, for example, has relied on two nameplates since the 1970s - the Civic and the Accord. And it has never let those nameplates grow stale. Every 4-5 years, we are treated to a thoroughly revamped Civic and Accord.
Buyers not only know what an Accord and Civic are, but they also know that they will be at or near the top of their respective segments. I've read that buyers looking for vehicles in these segments will automatically check out the Accord and Civic, even if they aren't set on buying one, because they know that those two vehicles set "the standard" in these classes. That means Honda saves on advertising costs (no need to pull buyers into the showroom, when they are coming anyway). It also shows that Honda has established a firm identity for the Accord and Civic.
Ford is now coming out with the Fusion, which, as I said above, looks great. And it is getting great reviews. But it will have to spend lots of money letting buyers know just what a Fusion is.
And what will happen to the Fusion down the road? Will it be a great car crippled by quality glitches and recalls (think Focus)?
Will Ford let it wither on the vine after its initial success, because it's more "cost effective" in the short run to spend less on regular revamps (think Taurus)?
If it doesn't sell well right away, will Ford immediately pull the plug, and switch to Plan B (think Freestyle)?
I did exactly that in 2000 with the Passat- and got slapped in the face, then kicked in the kahoonas. :lemon:
As for Ford the 1996 Tarus I was was a sophmore in high school when that car came out and I used to get automobile magazine at that time. Automobile magazine had photo's of the 96 Tarus and as a real young person and my first reaction was like thats ugly. The 97-98 Mustang was a great looking car at that time though. The mid to late 90's Escort was too weird looking for me. However I do think the current Focus while I wouldn;t buy one was an improvement over the Escort it replaced. The Fusion will do better than the Tarus it replaced I think. I conclude by saying Ford is definately getting better in terms of judging the market in consumer taste in terms of exterior styling the last 5 years. In the mid 90's they try to be innovative with their styling and push the envelope but they turned off customers.
As for the Avalon and LaCorosse those cars are bought by older people in their 60 and 70's. Those cars are not young people cars. I'm sure an older person would not buy a Mazda 6 with the sport package.
As for VW I like the 02-05 Passats but the new one I'm kinda indifferent because of the way it looks. The new Jetta looks like a Toyota Corolla. The previous generation looked alot better.
That's always true for any Detroit car. When Lincoln LS came out, Ford promised it'd have a life cycle as regular as its competitors. So what happened? There will never ever be a 2nd LS. Ford is promising the same thing for 500 & Fusion.
Automakers tend to concentrate on things that earn them money. GM and Ford make big money on Silverado and F150, Suburban and Explorer, so those models get regular updates. GM and Ford pretty much lose money on every car they sell!
They had a lot of problems with detonation due to the shape of the heads. Today's computers have helped considerably.
I do wonder how an engine that can shut down 4 of it's 8 cylinders will last over time. Does it shut down the same cylinders all of the time? Or does it shift to the other 4 every other time?
I would think that the cylinder bores and heads may become abnomally worn....along with all of the other moving parts that are removed form the combustion process.
That would be a big part of the "poor planning" I mentioned.
Grbeck did a good job of summing up the problems with their product. But I disagree with his assessment of their business sense. GM and Ford appear to lack any sort of foresight. (I think Chrysler is better in this regard.) It's like they have a good three-year plan, but nothing else on the shelf.
Examples include getting blind-sided by the hybrids. Or not having any kind of depth in the product line, so high gas-prices cut their sales in half. Not seeing what a bad idea it was to give the unions healthcare and production control would be another. Give them concessions? Yes! The union workforce has earned their pay. But what they conceded has more than doubled in value.
I am still surprised about GM's products.. the new Impala and Equinox are the only Chevy I would ever look at... Pontiac has recently introduced very nice rars.. G6, Vibe, Solicite, Torrent(Equinox).. all great... but what is GM thinking with the new All GM Van/SUV... those things are ugly as night.. I cannot imagine people WANTING to buy them..
Moreover, GM surpises me by pulling down its foreign brands.. I think SAAB is losing under GM.. and I hope Subaru won't... GM exploits its interests in Daewoo so much they killed it.. and areslowly killing Suzuki (*maybe the new Vitara will help).. Opel is an OK european brand, but recently I feel they are losing ground..
To the contrast Ford is getting better.. as a Focus owner.. I am bitter at the decision not to bring the new Focus over the ocean.. appartently they think it would be too expemsive (doesn't seem to be out of range of Mazda 3 buyers)... whatever.. I think that was a bad decision..
However when you look at the new models from ford you can see how they are learning from their foreign brands. All 4 bangers are great Mazda engines. 500 has a great underpinnings because they are from volvo. Fusion is based on Mazda6, because it handles like a dream. They take the best things they have in the group and use them.. they still have a LONG way ahead, but I think thir are ion the right track.. especially last 2 years:
- 500 got blamed for dullness, but it is a gtreat car, that is getting great reviews. AND Ford listened and is going to redesign it for 2007
- Freestyle is also dull, but it was a patch, that will become Meta One for Lincoln and replaced by a full fledged Fusion based Edge crossove wagon (with sharp styling)
- 06 explorer is praised unanimously
- Fusion is a very good car and I believe it will be a hit..
- they plan Edge, right along the lines of what they should do... bring a midize corssover/wagon (see Pacifica)...
They have a plan and they are well on their way.. My only worry is their utter neglect of the Compacts segment.. I think if they believed in themselves, they could bring the new European focus.. and blow the doors off Corolla (maybe not Civic, but corolla definitely).
I am affraid if they neglect focus for a couple omore years they will lose the young buyers that would later move to Fusion...
I also hope they will maintiain the momentum, the way Chysler is trying to (despite the fact that I do not like a single Chrysler Group vehicle, they are planning well and thus doing well)
I think GM needs to look what others are doing to survive.
Plus, I wonder if part of the old 300 I-6's "durability" really stemmed from its relative simplicity (like many old engines). It was probably very cheap to repair and maintain, so it made sense to keep it running, even if it did break down.
With foreign brands thst GM purchased like Daweoo they were already in trouble even before GM bought them so I am not blaming GM directly for Daweoo's miss doings. Well Subaru I don;t like that ugly nose that they started putting on their cars recently. Finally, Saab they have been behind their European and even rival Japanese Luxury Brands for years. They just don't have a good following like Acura, Lexus, BMW, and Mercedes Benz do. Why did they even base their new SUV (the 9-7)on a platform used by the Chevrolet Trailblazer? saab sales are up from last year though.
On the subject of Ford I don't think Ford is going to redesign the 500 in 2007 its more like a mid-cycle refresh I would think. 2 years into a model cycle is too early for a redesign. I do think the Freestyle is dull as well. As for the Focus somebody on this board said it will come out supposedly as an 07 model. I agree the current Focus is 6 years old now which is too old nowadays in the auto industry for a single model to lag on without a redesign.
I agree Chrysler is doing well but like yourself their vehicles aren't my style.
When I talked about business abilities, I meant from the standpoint of executing all sorts of fancy plans and programs that look on paper and would impress a business school professor. Both companies can't seem to stick with a plan over the long term, unless we consider constantly obsessing over next quarter's stock price and profits to be a long-term plan.
Given the impact of a GM or a Ford bankruptcy on the government's pension fund guaranty program, as well as the loss of health care benefits by thousands of retirees and the hit that would be taken by already weakened suppliers, any objection to a declaration of bankruptcy would be examined carefully, unless the company really is at the end of its rope. I don't think either GM or Ford will reach that point by July 2006, unless the auto market really tanks in the coming months.
If one company does file for bankruptcy, it takes the heat off the other one. There are three main problems plaguing GM and Ford:
1. lackluster management;
2. overcapacity in the North American auto market;
3. a stubborn union.
A bankruptcy filing by one company would help the other on points two and three. The company that files for bankruptcy would experience a sudden drop in sales, as many people still equate bankruptcy with "going out of business." It's one thing to buy an airline ticket from a bankrupt company, especially since the public pretty much ignores stories about airline bankruptcies at this point.
It's quite another to sign up for a five-year loan on a new vehicle with the knowledge that the company (or the dealer, for that matter) may not be around to service it or honor the worry. Plus, a new vehicle is still an "image" purchase, so many people would be reluctant to buy one from a company perceived as a loser.
Since many GM and Ford customers are domestic loyalists, they would be quite likely to switch to the other company's offerings.
A declaration of bankruptcy would also probably kill off the weaker brands of the company that files for it - Buick, Pontiac and Saturn at GM; Lincoln and Mercury at Ford. Even if the reorganized company tried to keep those brands, they are too weak to withstand the drop in sales that would inevitably come with a declaration of bankruptcy.
As for the unions - assuming that the bankrupt company keeps operating, it will be operating with a much lower cost structure. You'd better believe that the OTHER company will demand similar concessions from the union regarding health care benefits, the jobs bank and plant closures. A chastened union would have no choice but to grant those terms. So the other company will benefit from the first company's action.
I see GM filing before Ford. Judging by recent actions on Wall Street, the financial community apparently sees GM as the shakier of the two companies. Plus, a bankruptcy filing would wipe out Ford family's stake in the company. That gives the company an extra reason to do whatever necessary to avoid a bankruptcy filing.
Reminds me of the old joke about two men running from a hungry bear. The one man says, "We have to outrun that bear." The other replies, "No, I just have to outrun YOU."
Ford has to outrun GM at this point.
Here's My View:
The Wakeup Calls: The Japanese delivered the wakeup calls to Detroit, direct from Tokyo.
The Death Sentence: The Death Sentence came from Seoul, South Korea. Hyundai and Kia both delivered this.
Nuff said.
Ford and GM need product and less red tape.
I like the Freestyle actually. It gets decent fuel economy, is roomy, and isn't too bad price wise.
When the small SUV fad began developing in the late 1990's Chrysler was early on the scene (for a domestic) with the PT Cruiser. Notice they didn't tackle the industry head-on. Instead they created something functionally similar but with a twist.
For the past few years, it has been forecast that the era of trucks will begin to wane. Chrysler responded with the 300. Not a Camcord-fighter, but a car with a twist. They even created a wagon Americans would buy.
Chrysler was also insightful when they created the first Durango. Since people were buying SUVs instead of vans, why not give them an SUV with a van's 3rd row seat? Again, a mid-size SUV with a twist. (However, I believe the second Durango was not such a good move.)
Ditching the old-school design of the Cherokee and replacing it with the more refined Liberty was a big gamble. The old clunker had a very loyal following. But that turned out to be another smart move.
When I look at Chrysler, I see more successful responses to market trends and responses that come faster. I also see them leading new trends, rather than relying on reactions to what everyone else is doing.
Without Mazda to develop a small SUV or a mid-size family sedan, Ford would be in even rougher shape. I mean, the Escape/Tribute design was a joint effort, but it took Mazda quite a bit of talking to convince Ford that they should go with something car-based. GM is in even worse shape when it comes to picking horses... Witness the Aztek.
We'll see how the Edge really turns out. Today's Freestyle is much different then the concept car, better I think because I like plain, simple cars without the flash just for the sake of flash...call me dull!
Yeah but Ford has gotten alot of letters from what I've heard sent to them from people that are interested in the Fusion. A big company like Ford if they have a product that attracts people they will come to the showroom.
"And what will happen to the Fusion down the road? Will it be a great car crippled by quality glitches and recalls (think Focus)?"
That has been a serious problem with Ford's first year models. Even Consumer Reports said something in their latest issue about Ford struggling with first year models that have resulted in poor reliability ratings. Over the last few years Ford has had First year problems with the Focus(first 2 years), Escape, Navigator, and Expedition. The Focus and Escape are up to above average in reliability. The Navigator since the 02 redesign has rated worse than average reliability. The Expedition with the 03 redesign is rated worse than average in reliability. Of course the 04 Expedition like other 04 models that CR rated in their latest big issue only had a total of 3,000 miles on them and were last surveyed on March 31, 2004.
Side note: when I say bankruptcy, I mean Chapter 11, where a company will usually keep operating, like Delta, United Airlines, etc., but they use Ch 11 to shed debt, pension plans, and union contracts to which they never should have agreed in the first place, IMO...so GM and Ford would keep operating as a viable business, altho they do have the option of liquidation, but they will not do that...end side note...
You are not correct, IMO, because of their true financial situation...I believe that GM has about $18 billion in cash, Ford about $4-5 billion...that seems like a lot, but GM's debt is about $240 billion and Ford's debt is about $125 billion...if YOU had $18 billion in the bank and debts of $200 billion-plus, you are actually beyond insolvent, you are so deep under water that you may be sitting on the ocean floor...
Add to that debt the underfunded pension obligations of over $5 billion, growing retiree health costs (that factor will slow as retirees will be forced to pay for their own health insurance, or at least pay 50% of the premium), and as current employees also are forced to pay for a substantial portion of their health insurance, probably 50-75%...
So, the filing of a Ch 11 is actually a piece of cake, as all you need is debts far in excess of your ability to repay...that $18 billion in the bank is chicken feed compared to the outstanding debt of GM...
That's why I believe you are wrong, as you see the cash in the bank but not the total crushing debt these companies both have...
Ford also puts out some outstanding launches, like the last two new F-150s. Flawless introductions. The 500 has been a flawless intro of a new model. So, it depends, which is one of the strange things about Ford. I've never understood how the same company can produce amazingly dependable cars like the Crown Victoria, and the Taurus at the same time...