Thursday, January 25, 2007

We Can't A-Ford This Crap

Well Ford misses by 12.7 billion - time to give the Execs a nice bonus - it could have been worse. Let's see - we'll lay off half the work force move all the manufacturing to someplace no one has ever heard of and make the vehicles out of rat crap - oh wait we've already tried that and lost 12.7 billion.

Have you driven a Ford lately? Obviously not many people have. I own a Ford - I got the Escape when it first came out and I love it. It's the perfect car for me and the wife - fuel efficient enough and can pack a load when we go away on our vacations.

But the problem with Ford is the same as with every vehicle manufacturer out there - they make them too good. My Escape looks like new - the finish is as bright as the day as it came out of the factory (and I don't waste time waxing cars). It works - it gets me from point A to point B with the minimum of irritation. Am I going to buy another one? As soon as this one wears out but I have no idea when that will be. I put over 200K on my last Ford (a '93 T-bird) and then gave it to my grandson to wreck - that was in 2001. (He did).

I think we are witnessing the last throes of Ford Motor Co.

It's a shame and I for one do not blame the unions. I don't think that labor getting a fair share of the profits is a bad thing and I don't believe their share was unfair. Ford put all of these contracts in place back when they made most of their money from the financing and not the car and the only purpose for the car was to pay the manufacturing costs and get something on the lot to finance. This nonsense about health benefits being 18% of the cost of a car to manufacture is just that - nonsense. They never cared how much it was as long as the cost of labor was covered by the price they could get for the vehicle.

Ford made most of their money on financing - car sales were secondary to writing the note - the most important guy on the lot was the Finance and Insurance manager - everyone worked for him regardless of what the org chart showed. If he could write the loan, the insurance policy, the undercoat, the overcoat, and the extended warranty it didn't matter what went off the lot the dealer was going to make money and the company was going to make money. All that counted was the interest rate and a servicable loan.

That's what all the emphasis on leasing was about. Leasing was sold as the way the poor man could drive the car he wanted and the program sold - what it meant to Ford was the never ending finance contract. Unfortunately that was more a fad than a fashion or maybe a fashionable fad and the first time the guy brought the car back with 10 miles more on the odometer than permitted it was the last time he leased.

Now when you can get the loan off the Internet - overnighted to you in a Fedex envelope - the finance business has gone completely sour. And very few people buy the extended warranty - pretty much everyone has discovered that they are nothing but cash cows for the dealerships and the cars live through them anyway.

I think in 20 years Ford will have gone the way of Studebaker and the rest. Most of their dealerships already sell something else and in many of their dealerships that something else sells more each month than Ford.

Ford, of course is up 3.29% at this writing based on the idea that it can't get any worse - it can.

1 comment:


Theirs a lot of things that one cannot afford.