Ford and the "No More Cars" Statement(s) – Q1 2018 Earnings Up 9 Percent

Discussion in 'In the News' started by xcel, Apr 26, 2018.

  1. WriConsult

    WriConsult Super Moderator

    Well, let's see ... it's just about ten years since the last time the Detroit-ish automakers got caught by rising fuel prices, with no working plan in place to meet the changes in demand. Ford did at least get credit for being the only one of the Three that got through it without a government bailout. I think it may play out differently this time, even if gas prices do suddenly spike.

    The current demand picture is bleak for car-type sedans and hatchbacks. The younger buyers who've traditionally bought smaller cars are either ditching cars completely in favor of Uber, or buying subcompact SUVs instead. For better or worse, instead of buying a subcompact car for $17k, they're electing to spend $22k for something that burns more gas and has sloppier handling -- but also looks more rugged. Cars 'R' Clothing, same as it ever was.

    That said, today's SUVs get better mileage than comparably sized sedans did a decade ago, and handle better than comparably sized sedans did two decades ago. A CR-V performs better in every way than a typical midsized sedan from not that too far in the past. To some degree these improvements in engines, fuel economy, tires and suspensions have allowed the SUV craze to occur. Like it or not, most passenger cars sold these days are "crossovers" and not traditional "automobiles".

    A lot of today's crossovers are more disappointing, to be sure. Some of them (Hyundai especially seems to have struggled here) are awfully thirsty compared to the sedans people are cross-shopping them with -- but many are not, especially in the subcompact and compact segments. Now there are any number of crossovers with highway mpg well into the 30s. No that's not quite as good as a comparable sedan, but 10 years ago we on cleanmpg were begging the automakers to simply build cars that got highway mileage in the 30s.

    Whatever "cars" means, anyway. The definition of "crossover" has expanded. Look at the Kia Niro: It's marketed as a crossover, and sure looks like one (even though it isn't even offered with AWD). But it gets Prius-ballpark mileage, and even better it doesn't look anything like a Prius. It's really just a tall wagon, a concept that's been around for 35 years.

    I think as traditional cars mostly disappear, crossovers will be doing a better job of providing good mpg than in the past. Overall, people are still demanding higher mileage than they did until recently, despite a multi-year slump in gas prices. Ford is going to continue marketing the Focus ... but as a crossover, and I'm sure as a thriftier alternative to the Escape. Even Toyota is going to position the new Prius V as a crossover, and I highly doubt its mpg will take a hit.

    So-called "crossovers" can get decent mileage, especially if they're essentially just cars with a different label and styling, as is increasingly the case. And Ford is about to massively expand its excellent hybrid drivetrain across much of the lineup, which will also help protect its position as energy prices rise. So overall I don't think this is terrible news. The message buried in this is that automakers will continue selling more wagons (a category that includes all SUVs) than ever. The (car) wagon is dead! Long live the (crossover) wagon!
    Last edited: Apr 27, 2018
  2. EdwinTheMagnificent

    EdwinTheMagnificent Legend In His Mind

    I've been doing that since Day 1 with this car.
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  3. Trollbait

    Trollbait Well-Known Member

    In January, I saw a 2018 Fusion hybrid listed for $9000 off MSRP.

    We will see 'cars' from Ford again, they will just have the Outback and Crosstrek treatment.
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  4. WriConsult

    WriConsult Super Moderator

    I don't think they make much profit on the bulk of the Mustangs either. Ford will keep it not because they make money on it, but because it's a halo car that provides prestige to the brand. They've even started importing right-hand-drive Mustangs to the UK for the first time, certainly not a move that's going to make them any money.

    Personally, although Ford's klutzy infotainment systems drive me bonkers, I like several of their cars a lot:
    - The fiesty Fiesta for its driving attributes and surprisingly low noise level for a subcompact.
    - The Focus for its own driving dynamics and also very low noise level for a compact, though I was disappointed to see the MT option go away in the hatchback starting last year,
    - And the C-Max for being a fun-to-drive hybrid, and a great value at its recent fire-sale prices. Although the Leaf in used state clearly became our obvious choice for ownership cost once we realized how cheap they were going, the C-Max was a very close runner-up. Only real downside for me is the RV-class turning radius, a massive flaw for us as an urban drivers, but the car has so many other great attributes (including strong reliability!) I think we'd live with the daily frustrations of parking it. Then again, the Leaf was such a slam dunk that it's not even close. We've never enjoyed a car so much. We'll wait and see how Ford's future electric offerings (the Focus EV a bit of a disappointment) look.
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  5. thunderstruck

    thunderstruck Super Moderator

    With gas prices at 3.65 and going up in Los Angles, I just don't see too many people buying pickups instead of Fusions. Gas is "only" 3.07 in Chicongo.
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  6. EdwinTheMagnificent

    EdwinTheMagnificent Legend In His Mind

    I think the politically correct term is "Chiraq".
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  7. Blackbelt

    Blackbelt Well-Known Member

    I am not sure what the morons who run F150 motor company....oops.,.Ford motor company are thinking, but this is not going to end well.Watch what happens when gas hots 3.50-4 bucks. All they see is the huge profits from FSP trucks. What happens when no one buys them? If they want to abandon that big a segment, fine, go ahead. But be ready to deal with the consequences, and don't look to us to ail your short sighted asses out. Gas can go tot 4 Bucks plus, i dont care. I drive a Prius C and my wife drives a smart for two. The only FSP i won is my Jeep renegade, which averages 25+ and has only been driven 4500 miles in the last year. Stupid stupid stupid move. Best of luck...
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  8. priusCpilot

    priusCpilot George

    What about Shitcago?
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  9. Carcus

    Carcus Well-Known Member

    If you wanted (and I mostly don't) want to give Ford some credit, ... you might guess they're battening down the hatches(hoarding cash) before a storm. This could be the calm before a run-up to 3 digit oil and a no-shlt switch to electrified vehicles.

    "Ford Chief Executive Jim Hackett told investors in October the automaker would slash $14 billion in costs over the next five years and shift capital investment away from sedans and internal combustion engines to develop more trucks and electric and hybrid cars.

    Of the 40 electrified vehicles Ford plans for its global lineup by 2022, 16 will be fully electric and the rest will be plug-in hybrids, executives said."

    Ford plans $11 billion investment, 40 electrified vehicles by 2022

    / maybe they're serious**. If so, I sure hope a bunch of that new production comes back to the U.S. Cuz' I'm not sure all the starbucks baristas and wal-mart greeters can afford $37,000 EVs or $55,000 pickups.

    **really, REALLY (!?) trying to avoid that "kodak moment"?
    Last edited: Apr 30, 2018
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  10. Carcus

    Carcus Well-Known Member

    Off/on topic (referencing my post above):

    Google "MaxRange Tesla Battery Survey", scroll to the bottom, click "charts", scroll down -- Remaining range vs. days

    if you believe the data, it is starting to look like Tesla has a 20+ year battery
    Last edited: Apr 30, 2018
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  11. thunderstruck

    thunderstruck Super Moderator

    More power to them if they can come up with high mileage hybrids. Barring a major economic meltdown I think higher oil prices are here to stay. Problem is there are a huge number of people that can't plug a car in, so we need hybrids. I"m not going to dangle an extension cord off my 2nd floor apartment balcony to charge a car, nor are any of the other 150 units here. And Ford's car has to be able to get what's on the sticker so Consumer Reports does not embarrass them again.
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  12. Jay

    Jay Well-Known Member

    A large part of the reason we've enjoyed low oil prices is that OPEC decided to ramp up production in 2015 to drive US oil producers out of business. North American frakkers had made significant inroads to OPEC's market share but the frakkers need higher prices to stay profitable. The strategy worked. Two years ago WTI was $30/bbl and the frakkers were pretty much toast. (Venezuela was also toasted.) At the end of 2016 OPEC and Russia agreed to cut production. 10 months ago WTI was $43/bbl and now it's about $64/bbl. At the current price, though, frakkers are golden. They need about $50/bbl to break even and they're making solid profits now. US shale production increased to 10 million barrels per day. US oil exports exceed 2.3 million barrels/day--an all time record! This production will brake further oil price increases and there's speculation that Russia and OPEC want to end their production-cut agreements ASAP.

    If Ford made their sedan production decisions based on steady or falling oil prices, I think they made the right bet. All the automakers' US sedan sales have been suffering greatly. Pickups and SUVs have never gotten better fuel economy than now so folks want the utility.
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  13. 08EscapeHybrid

    08EscapeHybrid Moderator

    IDK, what I truly don't understand is that Ford is abandoning yet another market. The Panther platform was popular for police and taxi use... They discontinued it. I think the current police vehicle is based on the Taurus. I see a lot of Fusion Hybrid taxis on the road here in the DC area, with a couple aging Escape Hybrid taxis, and there's still a fair number of Panther platform taxis on the road here as well.

    I've grown to like Ford, but IMHO, they keep giving up market segments. I don't think Dodge would have been as successful bringing the Charger in as a police vehicle had Ford kept the Panthers going.
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  14. Carcus

    Carcus Well-Known Member

    US shale production is about 7 mbpd, the other 3 is conventional. US still consumes north of 16 mbpd AFAIK (yes, we do export, but we are still a net importer). Everything I see says Saudi wants to extend the cuts, and is now eyeballing $80 to $100 oil. Every move saudi makes, to me, would jive with a Ghawar that's in, or very near decline.

    World oil production has a 'natural' decline rate of somewhere between 2 and 4 mbpd. World oil consumption is growing at 1.5 to 2 mbpd. You'd need to add a "permian per year" just to keep up with those two factors.

    The only strong* onshore spare capacity lies in US shale, Russia, Canada(environmentally constrained) Iraq(geo-politically constrained), Iran(geo-politically constrained). Beyond that, it's offshore and most of that will not be cheap, nor will it come online fast.

    That's the way I sees it.

    /Saudi 'might' be able to make a show with higher production (11+ mbpd) for a period of months, I don't think they can sustain it.
    //*DNI Africa or South America -- as most (but not all) of those two continents look to be even bigger shlt shows than the middle east.
    Last edited: Apr 30, 2018
  15. BillLin

    BillLin PV solar, geothermal HVAC, hybrids and electrics

    I don't see many car-based police cruisers in my area. They're mostly Ford Explorers. Metro (rail) cops, too, and they love to park and idle. There's one that I've encountered a couple of times while charging at a nearby rail station. The metro police vehicle "iced" a charging spot (both times) and was idling the whole time I was there. I think (s)he was doing something on a cell phone.
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  16. Carcus

    Carcus Well-Known Member

    With On-the-go Mobile Ordering in the Dunkin’ app, DD Perks members can tap to order ahead, speed past the line in store and go.
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  17. PaleMelanesian

    PaleMelanesian Beat the System Staff Member

    Let me get this straight: They're losing money on the cars, and making profit on the trucks? So, they're charging too much for the trucks.
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  18. Carcus

    Carcus Well-Known Member

    "Ford plans to begin assembling a small, battery-powered sport-utility vehicle in a plant in Cuautitlán, north of Mexico City, in 2020. The vehicle is supposed to go 300 miles before needing to recharge its battery, giving it a greater range than many electric cars now on the market.

    Ford plans to follow that model with at least 12 electric vehicles as part of a broader, global strategy. Ford and other automakers expect sales of electric cars to take off in the years ahead as China, European Union countries and others push automakers to cut tailpipe emissions."

    Ford Will Build Electric Cars in Mexico, Shifting Its Plan
    /We (including me, sometimes) talk about Ford and GM like they are US companies, .. but they are not. They are global companies, .. and they act in their own best (perceived) global interest. Their CEO's don't sit around talking about what's best for America/American workers, ... and if they do, they get an early retirement.

    "In the midst of the 2016 U.S. Presidential election campaign, Fields announced a plan to move production of the Ford Focus from Michigan to San Luis Potosí, Mexico. Donald Trump used this proposed move as an example of how the North American Free Trade Agreement was bad for American workers. Before Trump took office, Fields announced the cancellation of a $1.6 billion investment for a new factory in Mexico. This incident is reported to have undermined Ford's board of directors' confidence in Fields."
    (so, he got shlt-canned, buenos dias Senior Hackett )
    Last edited: Apr 30, 2018
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  19. BillLin

    BillLin PV solar, geothermal HVAC, hybrids and electrics

    Absolutely. And people are snapping them up. No wonder the financial arms of these car companies (I noticed great results recently in GM's lending branch) are doing well. People are happy to borrow to "afford" these vehicles.
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  20. Trollbait

    Trollbait Well-Known Member

    The latest Mustang got an independent rear in part to appeal better in overseas markets. The C-max Hybrid was always intended as a stop gap model for North America. It had been an ICE model in Europe for awhile, and thus it was just a hybrid conversion of an ICE platform with those disadvantages; namely heavy weight and compromised space for the Energi. We never got the ICE model for the same reason Mazda cancelled the Mazda5.
    They aren't actually abandoning the car market despite what the headlines say. I currently don't have the time to look for the full "whitespace design" comment, but the jist is that Ford will replace traditional cars with new designs that fill the gap between them and crossovers. The focus Active is the first. I'd post a pict if I wasn't responding to others, but it is a freakin' car. It may have more ground clearance and higher sitting position, but without a Focus hatchback in the photo with it, which I haven't found, you can't tell if that is actually so.

    Only sedans are being abandoned in North America, but I bet we'll see liftbacks like the old Accord Crosstour and some of the current BMW X's from Ford in the future. Toyota calls the Prius a sedan.
    They've officially abandoned the police sedan. Most police departments seem to favor the Explorer based one, which could be had with the 2L Ecoboost.

    Ford abandoned minivans for the same reason nearly everybody else did; low sales. We lost the Ranger in part to fuel economy standards. Targets aren't simply one for cars and one for trucks. There is a sliding scale to them based upon the vehicle's footprint. The target for an old Ranger sized truck is technically much harder to reach than for larger models. Model bloat wasn't the sole reason the other old compact trucks are now midsized. The midsized global Ranger will be coming to NA.
    In their idling defense, the extra equipment police cars carry might quickly drain the battery on an ICE car.

    It isn't all golden for the frackers. It is a light sweet crude, but the easiest and cheapest refineries to ship to are on the Gulf coast and are designed for heavy, sour crude. They can process lighter stuff at reduced efficiency, and even then they might have to mix it with some heavy stuff. So the frackers have to discount their crude for these refineries to buy it. There are refineries being made for their crude, but aren't on line yet. Then there is the fact that fracked wells have short lives. While oil production is up per field, the production per well has been dropping. Meaning more and more wells need to be drilled to keep production up.

    A Chevy salesperson told us that the Impala won't live past the current one.
    Not all the hybrids will have a plug; the F150 won't, and it doesn't sound like the Mustang will either. Then it is easy to offer a hybrid version of a PHEV. I'm reading the "rest will be PHEVs" as Ford is designing future platforms with a PHEV in mind, which is the smart move. Toyota didn't with the Prius, and the second generation PHEV version has the passenger capacity of the gen1 Volt, and the cargo space lost of the C-max Energi.

    Yet people are buying the trucks at those prices, and those high profits are funding plug in development.
    Or if they took lower margin on the trucks, they'd be selling even more of them, and even fewer cars.

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