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. xcel

    xcel PZEV, there's nothing like it :) Staff Member

    [​IMG] Taurus, Fusion, CMAX, and Fiesta will soon disappear in North America

    Wayne Gerdes – CleanMPG – April 25, 2018

    Ford's big gamble... Driven by profitability.​

    On Wednesday Ford released its 1Q 2018 earnings under the new and much lower corporate tax structure. The company said it made $1.74 billion in the quarter, up 9.4 percent over the $1.59 billion it earned a year ago. Revenue was up 7 percent to $42 billion. Operating profit margin increased to 7.8 percent from 5.2 in Q1 of 2017 with a full year outlook of > 8 percent by 2020.

    North America drove Ford's profits for the quarter with pretax earnings of $1.9 billion while Asian ($119 million USD) and South American ($149 million USD) losses continue to plague the U.S. automaker.

    The big news from the Q1 earnings release was that the company stated it will discard MOST OF ITS NORTH AMERICAN CAR LINEUP as part of an all-encompassing plan to save cash, drive earnings, and be more competitive going forward.

    From the Q1 2018 earnings release...
    Ford’s CEO Jim Hackett said the decision was due to declining car demand and in particular, "profitability". All in, the Taurus, Fusion, CMAX, and Fiesta will soon disappear from the North American marketplace.

    This announcement could lead to a near term Ford employment problem while placing the company at risk due to possible higher fuel prices over the mid to long term. Ford will surely discard tens of thousands of U.S. employees working on the non-profitable car lines. When gas prices rise, so go Pickup and SUV sales.

    Chief Financial Officer Bob Shanks stated the company will save upwards of $25.5 billion in cost cutting by 2022. Shanks did not say if employees would be cut but said, “Nothing is off the table.” We all know what that means.

    The cost savings are expected to partially be achieved by designing its vehicles on five flexible global architecture platforms vs. nine today. Think of VWs MQB and Toyota’s TNGA as the direction Ford will also be taking. Finally.
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  2. PaleMelanesian

    PaleMelanesian Beat the System Staff Member

    point gun at foot, pull trigger
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  3. Carcus

    Carcus Well-Known Member

    Pressed for time, I drove nearly 400 miles yesterday, 1/2 of it in the rain and with a 15 to 20 mph headwind, temps in the low 50's. Speed was, well, let's just say 'not' cleanmpg approved and may (or may not) have been legal -- (PSL 70/75 mph).
    End result? ... 45.3 mpg (at the pump).

    You're not going to get that kind of highway efficiency out of anything but a sedan.
    Last edited: Apr 26, 2018
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  4. Carcus

    Carcus Well-Known Member

    If I plug my day into "a better route planner" a tesla model 3 long range with aero wheels would make the trip, but a model X 75d would cost significant charge time AND I would've had to slow down to 61 mph to even make the trip possible.
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  5. Carcus

    Carcus Well-Known Member

    Point being, .. Ford seems to be betting on a non-electric low gas price north american future. That seems like a risky bet.
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  6. BillLin

    BillLin PV solar, geothermal HVAC, hybrids and electrics

    Something like what Jeep's been doing along?... (minus the Eagle cars I suppose)

    Ford --> SUVs-and-Pickups-R-Us. Probably short sighted, but they could have a very good run in the next few years in terms of bottom line.
    xcel likes this.
  7. Carcus

    Carcus Well-Known Member

    Yah, i dunno. Rumors are that Marchionne is positioning his company for a sale (Wu boo!, again).

    If I were to guess, maybe Ford is betting 1/3 of the Farm on an autonomous fleet. Freeing up development money AND ... If you're a low to average income earner in a busy city, and all you can buy is an expensive FSP, or a chinese built focus, ... maybe rideshare starts to look better.
    Last edited: Apr 26, 2018
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  8. seftonm

    seftonm Veteran Staff Member

    They've sold 43k Fusions so far this year, only the Escape, Explorer, and F-Series are higher. Mustang is only at 19k. Seems like an unusual choice, but maybe they don't make much profit on all those Fusions?
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  9. xcel

    xcel PZEV, there's nothing like it :) Staff Member

    Hi All:

    I just received this note this morning...
    I see this as short term Ford employment problem and a mid to long term company risk problem as Ford will be able to discard multiple tens of thousands of U.S. employees working on the non-profitable car lines here in the U.S. When gas prices rise, so go Pickup and SUV sales. The trucks and SUVs are doing fine and there is no way in hell Ford will be able to absorb all those car based employees into the truck/SUV design and production side which is already at full employment. Productivity is improving each and every year making it even worse.

    On the fuel price front, it is beginning to look like we are heading back towards much higher prices. Can an Expedition, Bronco, or F-150 sustain sales at $4.00 per gallon prices? The Hybrid and PHEV Truck/SUVs are not here yet but will be soon.


    Good thing for the recent Corporate tax cut to help bring the company's margin back up towards 8 percent. Hmmmm.

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  10. MaxxMPG

    MaxxMPG Hasta Lavista AAA-Vee Von't Be Bach

    "Trucks and SUVs only" - with gas prices going higher - is going to be interesting. It sounds like "Big & Tall Male" clothing stores - a chain of retailers with a target market that is a narrow slice of the population with specific gender/height/width parameters. But if all the men in the country died suddenly, they could rebrand themselves as "Big Burly Women" clothing stores - with little more than some new inventory - because clothing is made in a wide variety of sizes for both genders. The problem with ceasing production of a sizable (even if shrinking) chunk of overall sales is that you're giving those sales over to the competition. If your Loot Of The Froom undergarment company decides to stop selling jockey shorts in waist sizes under 36, guess where all the Skinny Stans are going? Yup - over to the competition to restock their dresser drawer.
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  11. xcel

    xcel PZEV, there's nothing like it :) Staff Member

    Hi All:

    I updated the story with the Q1 earnings details as well.

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  12. Carcus

    Carcus Well-Known Member

    “Ford will be able to discard multiple tens of thousands of U.S. employees working on the non-profitable car lines here in the U.S. When gas prices rise, so go Pickup and SUV sales. ”

    ... and so they will then be selling all sorts of new sedan models here in the US, coming right from their Chinese global production line.

    /straight out of the ol’ globalist playbook
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  13. Elixer

    Elixer Well-Known Member

    I think Ford, Chevy, and Dodge/Chrysler never really understood the average sedan buyer. They've for the most part failed to keep up as far as quality, reliability, and economics of the car market. Ford, Chevy, and Dodge cars often have worse fuel economy, worse reliability, and worse resale value versus offerings from Honda and Toyota. Sedan buyers are usually looking for the sensible option, and therefore fuel economy, reliability, and resale value are very important to them. Being beaten in these factors has cost them millions in sales. If they wish to relegate themselves to just the large car market, they can expect to get walloped every time gas prices cross that $3.50 threshold.
  14. priusCpilot

    priusCpilot George

    Gas will be moving up. The Saudis are buying a lot of US weapons for the next proxy jihadi war in Syria. Iran will also need to test a nuke immediately to protect its self from attacks just like NK did.

    Yup, gas will go up! I'm comfortable bearing up to $6/gal. At that point, Ill implement hyper milling techniques that will get me into 60-70 mpg a tank range.
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  15. jcp123

    jcp123 Caliente!

    Ford's come the closest and I think they have had the best lineup of cars of any American for the last ~10 years. I understood FCA revamping, but Ford? The Fusion is a genuinely good car, the Focus is behind by a redesign, and Ecoboost motors make the mix interesting. Of the big three, I thought Ford the strongest and by far the best positioned.
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  16. rossbro

    rossbro Well-Known Member

    Where I live, by Myrtle Beach, ALL I see are Fusions on the road. I can't believe they want to drop that car. NUTZO !!!
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  17. BillLin

    BillLin PV solar, geothermal HVAC, hybrids and electrics

    I don't think Ford's making much money on the Fusion right now, other than the Platinum level and other higher end trims perhaps.

    Here are a couple of snippets from TrueCar for the entry level model.


    It has stiff competition in the Camry and Accord. This design stood out when it was first introduced. It was classy. Now, it is feeling a bit old though it still looks good to me.

    Edit: ...and I didn't mention the other major competitors, but you know what they are.
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  18. 08EscapeHybrid

    08EscapeHybrid Moderator

    Personally, I really like the Fusion, and several of my friends have purchased Fusion Hybrids after seeing my great experience in the Escape Hybrid. Besides, the Fusion already is on a global platform (Mondeo).
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  19. EdwinTheMagnificent

    EdwinTheMagnificent Legend In His Mind

    At one time , I was really interested in a Fiesta with 1.0 Ecoboost. But now , I wouldn't have any car that's
    not a HEV , PHEV , or BEV. Though........ a Fiesta ST would be a fun weekend car.
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  20. Unleaded

    Unleaded Well-Known Member

    Did Ford learn nothing from 2008?
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