Just want to say it. No, they are not perfect, but they are trying hard … and so far not taking bail out money. I hope they emerge from this recession stronger than ever before.
In spite of all the really bad and often dangerous cars Ford produced in the past, they are truly behaving like a reformed drunk! I agree with you that at the hand of Mulally, who saved Boeing after the 9-11 crisis, Ford is finally being managed by a serious and competent businessman. They most certainly deserve our respect for taking an early lead in getting rid of the losers, closing plants where necessary, and turning down federal dollars after mortgaging the whole company.
Ford deserves to survive and prosper; their current stock price has risen from 1/2 of General Motors to almost 3 times! They will most certainly request concessions from the auto unions equal to those just given to Chrysler. That will make them competitive with Toyota and Honda.
They will still need to build their small cars (Fiesta, Focus) in Mexico to make a profit on them.
I’ll second that. Car manufacturers in the United States have been under assault over the past 40 years, by the government, by unions, and by foreign competition that is able to structure their multinational assembly operations such that they can assemble cars here while paying almost no taxes, here or in Japan. Therefore, not all the Big Three’s problems are of their own making. However, it sure seems like Ford has been doing most things right while GM and Chrysler have been doing many things wrong.
I grew up with a Dad who hated Ford because of one bad experience with a dishonest dealer in the 1940s. I have carried that prejudice with me my whole life, and I have never owned a Ford.
That being said, I drive a LOT of rental cars, so I get to compare handling, fit, and finish on a lot of different makes and models. Also, I worked my way through college as mechanic, and I am an engineer by trade, so I know a thing or two about how cars are made.
Fords don’t seem to last much longer than GMs, but over the last 20 years, their fit, finish, and handling has continuously improved, while GM’s and Chrysler’s has declined.
I read in some business magazine while waiting in a doctor’s office that Mulally and some of his engineers visited Consumer Reports to see how CR tested cars and talk with the car testers at CR. The testers criticized one of Ford’s SUV models because the tail gate was hard to reach for short people. The Ford engineers immediately became defensive. Mulally reminded them that the purpose of the trip was to learn and not defend the product. I think that this attitude of accepting criticism on the part of the CEO goes a long way to improving the product. I’ve owned Ford products–a Maverick, a Tempo, a Taurus, a Sable, an Aerostar and a Windstar. All of them have been satisfactory. I don’t own a Ford product at present, but if Ford has a vehicle that I want, I wouldn’t hesitate to purchase another Ford product.
Until recently I suspected that Mulally was driving Ford in the wrong direction by being so focused on shrinking the company. I was wrong. He was right.
I agree that they deserve to emerge as the major U.S. manufacturer. The dichotamy is that they’re the only one who truely deserves help and only by refusing it will they be able to continue unfettered on the correct path that they’ve chosen.
And I also agree that their quality seems to have improved markedly.
So are you thinking of changing the screen name from Oldsfan to Fordfan?
I am anything but a Ford man, but I have to agree. They seem to have planned well for the current economic climate and they could quite possibly become the USA’s top or even the lone USA auto maker.
The Sport Trac is very popular around here where I live
I swore I’d never buy a Ford after owning a couple of lemons and being thoroughly disgusted by the “mentally challenged” engineering on them. However, the last two Fords I drove, I was impressed. They have come a long way. I would actually consider owning one now.
As far as the management (and obviously this is just my opinion), I think they have some reasonably competent management now, but I also think that if Ford hadn’t been forced to restructure earlier than GM and Chrysler, due to major losses, that they’d be in pretty much the same boat right now.
I’d say that Ford’s management is a lot more in touch with reality now than GM’s or Chrysler’s. I think most of GM’s problems were due to management’s apathy, and many of Chrysler’s woes came not just from failure to react fast enough, but due to being treated like an orphan child and shuffled from Daimler to Cerebrus, which seems to me to have been very much a fair-weather friend to Chrysler.
and by foreign competition that is able to structure their multinational assembly operations such that they can assemble cars here while paying almost no taxes, here or in Japan.
UMM…WRONG…Any foreign car assembled here is subject to the EXACT SAME taxes Ford/GM and Chryco are. There is no SPECIAL exemption. Any vehicle assembled overseas (i.e. Japan) and then imported to the US is subject to an on average tax of 20% import tax.
I too am NOT a Ford fan. Use to be a HUGE GM/Chevy fan. But I have to agree that Ford seems to be doing things right. Many of us who are avid Japanese vehicles buys who use to be US vehicles buyers would LOVE to see Ford/GM and Chryco grow to where they were in the 70’s. There is no reason what-so-ever they can’t build more reliable vehicles. They CHOOSE not to.
“Fords don’t seem to last much longer than GMs, but over the last 20 years, their fit, finish, and handling has continuously improved, while GM’s and Chrysler’s has declined.”
This is simply not true. Compare any 89 Chevy car to a 09 Malibu, no improvement in fit and finish? How about an 89 Dodge Omni vs 09 Caliber? The improvements by ALL 3 US automakers are vast!
“There is no reason what-so-ever they can’t build more reliable vehicles. They CHOOSE not to.”
It’s not a switch that you turn on and off. GM and Ford quality has improved substantially to compete with the excellent Asian car quality. Asian car quality has improved to stay ahead. Buick had quality ratings comparable to Lexus last year. That’s only one GM brand; they all need to improve to Buick levels and maintain them.
Back to the switch thing: Statistical process control is achieved when the user finds the correct parameters to monitor and learns how to respond when out-of-control conditions are encountered. Considering the thousands of parts on a car and the many steps to manufacture some of them, achieving the levels Asian manufacturers have is a daunting task. It’s one the Beg Three must continue to work on, but it isn’t easy and takes a long time to implement.
I must agree with you, oldsfan, that it was a brilliant strategy on Ford’s part to separate itself from GM & Chrysler by not taking bail out money. America will applaud it.
Agreed. Somehow GM has not had been successful in promoting their fit and finish upgrades, while Ford has been very successful. GM’s been making some great cars these last few years.
I am with you here—with a caveat. I have been extremely impressed that they did not take bail out money. I would buy another Ford if I was a bit better off financially and could afford when things go sideways and not worrying about getting killed in repair costs.
That being said, for now my 1997 never misses a beat with 140K and I would find it hard to turn my back on Japanese branded cars even with my reformed opinion of Ford.
Of course there is no special tax exemption. Did I say there was? I said that they structure their operations to avoid taxes.
Let’s say you want to assemble cars here but keep the profits in your home country where taxes are more favorable to heavy industry. You also want to have tight control over the quality of key components. You will stamp the metal for the body here, manufacture the interiors here, etc., but you will build the engine and transaxle in your home country and import it as a unit. How will you set the price that the US subsidiary pays for those engine/transaxles? You will price them such that the US subsidiary operates at zero profit.
We all adapt our business decisions for tax efficiency. American companies do the same sorts of things all the time. It just happens that it is easier for offshore auto companies to use this particular technique.
I said that they structure their operations to avoid taxes.
Which is BETTER for the US…Having cars shipped in and tax them 20%…OR…build the car here using US workers and NOT paying a duty tax.
but you will build the engine and transaxle in your home country and import it as a unit.
Which companies are building their engines overseas??? I know Honda and Toyota engines are built right here in the US…So are their transaxles.
How will you set the price that the US subsidiary pays for those engine/transaxles?
How do you set the price of a US owned/built car. MOST steel in US cars today is IMPORTED…MOST electronics in US cars is IMPORTED…Many engines are IMPORTED…Look at Chryco using Mitsubishi engines…and in the 70’s using VW engines…My Chevy Vega had a Opel transmission in it…been going on for years. GM/Ford and Chryco are all shipping engineering to countries like India and China…How do you tax that. GM and Ford have built HUGE engineering campuses in India to design cars sold in Europe AND the US. Pretty much all software for On-Star is from India.
It just happens that it is easier for offshore auto companies to use this particular technique.
And I see NOTHING wrong with it since it’s supplying good paying jobs to US workers.
Manolito; thanks for you economic theory on how to maximize carmaking profits. HOWEVER, Japanese cars made in the US and Canada are nearly all made here. Toyota, Nissan and Honda all make engines, transmissions, and all other manner of mechanical and electrical equipment in North America.
The decisions as to what to build and where is production and logistics driven; the most profit is made by optimizing those factors. As soon as production volume is high enough, the item will be made locally, or in a nearby country.
Expensive high tech items, however, are often made half way around the world, such as in China, where the cost is low, quality high, and transportation cost minimal.
This did not start initially; usually the bodies are stamped locally and tires, batteries and other generic components purchased locally. The difficult and expensive parts are initially imported, and later made locally when the volume builds up.
I realize you live in Mexico where the skill level is lower than in the US as is the sales volume. But even there, most of the cars, content-wise, are made there; Volkswagens in Puebla, Ford in Hermosillio, etc.
The unions and congressmen from car manufacturing states in the US initally complained about "all those Japanese imports " taking away US jobs. The US government persuaded those “cheap” Japanese manufacturers to set up shop in the US and they ended up beating the big Three at their own game. The rest, as they say, is history.
With respect to profits, they are maximum 8% of factory sales, even for Toyota. That money may or may not leave the country. In the case of the Japanese manufacturers, most of it was REINVESTED in US and Canadian plants and the local content got even higher. We now have Japanese models that are specifically designed for the North American market. The Honda Odessey minivan is way too big for Japan; parking it would be a chore!
All Japanese carmakers selling here now have design studios as well, since Japanese based designers can’t understand what Americans really want!
Finally, Japanese manufacturers have paid vastly more taxes to Uncle Sam than US manufacturers, who have mostly lost money in the last 10 years.
Toyota runs public awareness ads about their contribution to the US economy and job market. AT this stage it’s ludicrous to suggest that they are less good corporate citizens than the Detroit Three, two of which are now Corporate Welfare Bums!
No US car maker has had a decline in quality. What they have had is a quality race where some Japanese manufacturers are ahead of the game. However, the failure of GM and Chrysler to keep up doesn’t mean they have declined. It just means they haven’t increased at the same rate.