Mazda 6 Forums banner

1 - 17 of 17 Posts

·
Registered
Joined
·
2,661 Posts
Discussion Starter #1
News articles today report Ford's continuing financial troubles. Interestingly enough none of them even mention Ford's stake in Mazda, or whether its continuing financial woes will have any effect at all on its relationship with the Mazda corporation.

Here's one of thousands of articles about Ford's latest reported losses:

http://money.cnn.com/2006/10/23/news/compa...sion=2006102308
 

·
Registered
Joined
·
981 Posts
I think if Ford had to sell Mazda off, it'd probably be bought up by some Japanese company (hopefully Toyota to put some quality back into it). But, if Mazda remains profitable, I don't see them selling it off.
 

·
Registered
Joined
·
2,405 Posts
Ford won't sell off Mazda. Its too profitable for them specially since Mazda reported growth 16fold from last year(back in the 2nd quarter).

Don't expect them to return to profitability until 2009 I think are the current estimates.


Its really sad though, they need a huge and I said HUGE lift in style department and Mazda is just a perfect example of what they should be doing... o well
 

·
Registered
Joined
·
210 Posts
No surprises here. Ford is going to take its lumps for a few more years. It's hard to believe they hadn't seen this coming, the SUV fad couldn't last forever - particularly with tensions in the Middle East.

It's time for Ford to rethink the products that have the broadest market appeal - and that's the midize sedan and compact car and market. A redesign for the Focus is absolutely critical IMO and the Fusion is good, but not nearly good enough to pose a serious threat to Toyota or Honda's market share.

I don't think it would be a bad idea to cut Mercury loose too. No one knows what niche Mercury is supposed to fit into anyway, so why compete against yourself? I don't think anyone who doesn't like Ford would shop Mercury, even the most ignorant car shoppers know they are one and the same.

I also think that Ford (justifiably so or not) has one of the worst reputations out there in terms of reliability. They need to recognize this and address it with a warranty similiar to what Hyundai has (across the board). It will help greatly with resale value and it might bring some of the Honda/Toyota buyers back who would otherwise buy American but are afraid of reliability problems.

Either way, they've got a tough road ahead of them and I don't expect to see their stock move in a positive way for some time to come. Let's hope that if the ship sinks, they don't take Mazda with them!
 

·
Registered
Joined
·
130 Posts
My concern is that since Mazda is the brightest light in the Ford family they might start stealing the people that have been responsible for Mazda's resurgence and replace them with the dim bulbs at Ford.
 

·
Registered
Joined
·
1,479 Posts
I've been noticing a lot more M6 on the road (of all years model) these past couple of months...
[/b]
Yea I think the whole ZOom ZOom commercial did it for the public, that then all of a sudden the Speeds came out!!!! WHile the SPeeds grabbed so much attention people go to the dealer to check it out then realize that there's actually other cars like it. Minus the turbo and AWD of course.
 

·
Registered
Joined
·
1,708 Posts
No surprises here. Ford is going to take its lumps for a few more years. It's hard to believe they hadn't seen this coming, the SUV fad couldn't last forever - particularly with tensions in the Middle East.
[/b]
To be honest - no one saw this coming. Sure, an increase in gas/oil prices was inevitable, but did anyone expect them to go up this much this fast? (Except maybe the oil companies after Bush took the Presidency...)

It's time for Ford to rethink the products that have the broadest market appeal - and that's the midize sedan and compact car and market. A redesign for the Focus is absolutely critical IMO and the Fusion is good, but not nearly good enough to pose a serious threat to Toyota or Honda's market share.
[/b]
They're working on it. The Fusion is just the beginning. Only time will tell if they can continue to turn out better styled, higher mileage cars.

I don't think it would be a bad idea to cut Mercury loose too. No one knows what niche Mercury is supposed to fit into anyway, so why compete against yourself? I don't think anyone who doesn't like Ford would shop Mercury, even the most ignorant car shoppers know they are one and the same.
[/b]
The Mercury line has always had a lot of hard core customers - mostly older. That may be changing. Ford is looking at everything they can do to once again be competitive, but as long as Mercury sells they won't get rid of it - it would be throwing away customers. It doesn't have to make sense when discussing the likes and dislikes of consumers - especially car buyers.

I also think that Ford (justifiably so or not) has one of the worst reputations out there in terms of reliability. They need to recognize this and address it with a warranty similiar to what Hyundai has (across the board). It will help greatly with resale value and it might bring some of the Honda/Toyota buyers back who would otherwise buy American but are afraid of reliability problems.
[/b]
Not too long ago - pre-Jack Nasser - Ford had one of the best reliability ratings. After he took over and started amking his changes (which included deemphasizing the vehicle manufacturing aspects of Ford and favoring 'diversification') the quality started dropping and so did sales. Bill Ford took over temporarily (and he really was temporary - SURPISE!) and he looked for ways to turn Ford around, which the new management is also working on.

Either way, they've got a tough road ahead of them and I don't expect to see their stock move in a positive way for some time to come. Let's hope that if the ship sinks, they don't take Mazda with them!
[/b]
Ford won't sink anymore then GM or Dodge/Chrysler. The third quarter loss includes a lot of writeoffs from the reorg they are currently going through - somewhere in the neigborhood of $4.6B more. Actual losses from the manufacturing end were about $1.2B according to the articles I've read. Next quarter will look a lot better, though still not profitable.

Will they sell off their shares of Mazda? I doubt it. If by some chance they fail will they "take Mazda with them?" No way - Mazda is still a publicly held company and while Ford may own a controlling share, the worst that will happen is they will sell their shares to cover expenses - which I also don't see happening any time soon.

I wouldn't worry too much about Ford's problems or any potential affect they may have on Mazda. If anything, Mazda management has shown they are capable of shooting themselves in the foot from time to time by trying to restyle their cars for the masses.

And while Toyota and Honda may be slightly better than their US competitors, they aren't THAT much better. IMO, most of the differences are perception, not reality.
 

·
Registered
Joined
·
359 Posts
One of the reason quality is dropping in a lot of case due to the customer(Ford/GM) keep forcing their supplier to cut prices. Something along the way got to give.
 

·
Registered
Joined
·
210 Posts
It's payback for the Taurus line. Worst automobile line ever.
[/b]
I disagree. The original generation of the Taurus (1985-1991) revolutionized and reinvigorated the American automobile industry. Everybody copied it as closely as they could, including Honda and Toyota. With the Taurus, Ford recognized exactly what the American public wanted at the time. Fairly reliable, aerodynamic, (read: good gas mileage), roomy and excellent handling compared to its contemporaries. The problem was, they basically let it flounder until it became an also-ran. When Ford finally redesigned it for '96, they completely went ape shit with the styling and without significantly updating the handling dynamics and drivetrain. All of this occured around the same time as Toyota and Honda got their acts together and produced vehicles that matched all of the Taurus's positive traits, with far greater reliability and better drivetrains. At that point, Ford had already shifted much of its focus to trucks and more specifically, SUVs. It was a good move at the time, but they really needed to rethink the Taurus. Instead, they tweaked the styling to make it a little more conservative, but it was never again competitive to anything other than GM's mediocre products.

The Taurus was never something I'd want to own (except maybe the SHO), but it did appeal to a large market segment, as evidenced by the fact that it was the best selling midsize vehicle up until 1996 when they did that horrible, guppy-looking redesign.

http://news.yahoo.com/s/ap/20061019/ap_on_...e_last_taurus_3
 

·
Registered
Joined
·
981 Posts
Well the Taurus is gone now. I do however think Ford will make a resurgence (as illustrated by Goldman Sach's recent upgrade to Neutral).

Once Ford can reorganize and write off all of these expenses (7.7 billion last quarter) they'll be in better shape than ever to make a comeback. The thing that killed Ford is the cost per vehicle due to their pension plans and wages compared with Toyota.

After this reorganization and buyouts, I believe ford will eliminate the pension plan and switch to defined contribution plans which would save them even more. Hopefully the unions will allow them to switch this around away from the pension plan. The reduced costs of having to fund such a plan for Ford's employees will once again make each car profitable. On top of that, Ford would probably have to provide lower wages which are inflated due to the unions (you could pay some kid $10 an hour to do assembly line work).

Once they are profitable per vehicle, you'd probably start seeing more investment from Ford into quality and new designs. The problem now is with all the problems, programs are on tight budgets, therefore non-essentials are cut. If the new Ford executives are smart, they could get all this accomplished and need to focus on quality and design where companies like Toyota or Nissan have a higher perception of such attributes.

While buyouts may seem counterproductive to some, it frees up Ford's responsibility of funding pension plans in the future. It allows them to get rid of the burden and put it on the employee's shoulders.

Step 1 - complete buyouts and reorganization
Step 2 - get out of pension plans and make them defined contribution
Step 3 - Get rid of older, higher paid, workers and hire new ones at lower wages
Step 4 - Return to profitabilty, dump money into R&D/Quality assurance

Whether or not they can do this with the Union's approval is something to be seen, but I believe its the best chance Ford has at making a comeback. If the union were smart, they'd agree to it otherwise Ford could go bankrupt eventually then they could change whatever they wanted.
 

·
Registered
Joined
·
2,914 Posts
Well the Taurus is gone now. I do however think Ford will make a resurgence (as illustrated by Goldman Sach's recent upgrade to Neutral).

Once Ford can reorganize and write off all of these expenses (7.7 billion last quarter) they'll be in better shape than ever to make a comeback. The thing that killed Ford is the cost per vehicle due to their pension plans and wages compared with Toyota.

After this reorganization and buyouts, I believe ford will eliminate the pension plan and switch to defined contribution plans which would save them even more. Hopefully the unions will allow them to switch this around away from the pension plan. The reduced costs of having to fund such a plan for Ford's employees will once again make each car profitable. On top of that, Ford would probably have to provide lower wages which are inflated due to the unions (you could pay some kid $10 an hour to do assembly line work).

Once they are profitable per vehicle, you'd probably start seeing more investment from Ford into quality and new designs. The problem now is with all the problems, programs are on tight budgets, therefore non-essentials are cut. If the new Ford executives are smart, they could get all this accomplished and need to focus on quality and design where companies like Toyota or Nissan have a higher perception of such attributes.

While buyouts may seem counterproductive to some, it frees up Ford's responsibility of funding pension plans in the future. It allows them to get rid of the burden and put it on the employee's shoulders.

Step 1 - complete buyouts and reorganization
Step 2 - get out of pension plans and make them defined contribution
Step 3 - Get rid of older, higher paid, workers and hire new ones at lower wages
Step 4 - Return to profitabilty, dump money into R&D/Quality assurance

Whether or not they can do this with the Union's approval is something to be seen, but I believe its the best chance Ford has at making a comeback. If the union were smart, they'd agree to it otherwise Ford could go bankrupt eventually then they could change whatever they wanted.
[/b]

I agree, the current losses are due in part to the buyouts and job cuts. With the new generation of vehicles coming out and new marketing strategys, they'll be back. The union will have no choice or it will have nothing or no one to back them.
 

·
Registered
Joined
·
2,080 Posts
Ford and GM have been subsidizing rediculous retirements and health care costs for years. Once they get these costs off the books, as they are doing now, things will look much better in the future. Once study said that GM was putting 3500 dollars of each cars sale price into retirement and health care costs.....imagine when they can put a large chunk of that into R&D. I am sure that Ford is in about the same situation.
 

·
Registered
Joined
·
2,405 Posts
You people can't forget the weaking american dollar as well.

It seems Ford's European line up and Aulstralian line up does quite well. I think its time they start bringing over to the states. It will be intresting to see what comes from Fords lineup over the next 5 years...
 

·
Registered
Joined
·
5,217 Posts
You people can't forget the weaking american dollar as well.

It seems Ford's European line up and Aulstralian line up does quite well. I think its time they start bringing over to the states. It will be intresting to see what comes from Fords lineup over the next 5 years...
[/b]
Unfortunately those 2 statements are contradictory.

Ford's Aussie and Euro cars have always been great cars. But very expensive. Much moreso than the average American would want to pay. That's the price you pay for a better car.

With the ever-weakening US dollar, the chance of Ford bringing those cars over here becomes less and less likely. It was one of the major reasons why the GTO was dropped this year -- it just cost too much to bring all the way over from Australia after the freight and exchange rates were figured in.

So now the plan is to bring over Platforms and build the cars here. GM with the next generation Monaro being a likely addition and Ford is replacing the Crown Vic with the LTD from Australia. But they won't be brought over as cars, just engineering drawings. The question is whether those "good cars" will be quite as good once they've been cheapified to bring the price down to what the average American wants to pay for those respective automobiles.
 

·
Registered
Joined
·
210 Posts
You people can't forget the weaking american dollar as well.

It seems Ford's European line up and Aulstralian line up does quite well. I think its time they start bringing over to the states. It will be intresting to see what comes from Fords lineup over the next 5 years...
[/b]
Agreed. They have some very appealing cars over there - particularly with the recent popularity of the 300C/RWD performance-oriented sedan. Ford already has cars in it's Austrailian stable that might prove popular here.

BTW, all of your opinions/ideas are very interesting - great thread!
 
1 - 17 of 17 Posts
Top