dke

http://www.detnews.com/2005/autosinsider/0.../A01-272014.htm
http://www.detnews.com/2005/autosinsider/0.../B02-271686.htm

I'm not here to bash Ford. But things aren't looking good for the company.

http://media.ford.com/article_displa...ticle_id=21125

They have one of the lamest 10-Q's and Annual Reports, that doesn't break anything down into useful numbers. (They're trying to be as opaque as possible: which prevents the competition from knowing how things are doing -- but also investors, outsiders, and probably the company themselves).

I hear that they're employee pricing to everyone didn't help sales yet, just clear out old inventory (with limited penetration to new buyers -- mostly just moving some buys forward). And so on.

So what is Ford doing right/wrong? I personally think the Mustang typifies the problem: they weren't able to fulfill demand, not enough models/options. No Cougar equivalent. No SE's. And so on.

scottie1113

Excellent article and thanks for a very good post. Not being able to meet demand for the Mustang is not a bad thing. It keeps interest among buyers alive and the car brings people to the showrooms. Most manufacturers would love to have this so called problem.

But the trick is to sell something else to the folks who come to peruse the Mustang but really want something else. As it says in the article, this is a product market and that's where Ford has fallen down lately. I think they relied far too heavily on the profits from trucks and SUV's and didn't have a contingency plan for developing new vehicles until relatively recently.

For years I've believed that the UAW would be the death of American car manufacturers and sadly that seems to be happening now. Compare the labor costs in the US market to, say, Korea, and you'll see what I mean.

I don't envy Bill Ford and the difficult decisions he has to make. Unfortunately, as he slashes costs and "downsizes" and loyal Ford Ford workers go job hunting, he'll still be a very wealthy man living in opulence.

Makes you wonder.

forddude1416

Don't forget though, he didn't take his salary for this year. He's more about the company as a whole then about his pocket book.

dke

Do you know what the average (UAW) auto worker makes? Somewhere around $68-$73/hour. (That's $136K - $143K/year -- assuming no overtime). Now that's for complete cost -- after taxes, including all benefits, and so on. (Add about 25-50% to your salary to calculate the same). But still. The people in the U.S. south or southwest (non-union) making cars, are happy, secure and doing quite well making half that -- but those are mostly BMW, Volkswagen, Nissan, Toyota, or other foreign auto-maker workers -- the American companies can't have non-Union shops.

jgsmuzzy

I cannot really comment on this as we do not have the union governance over here (that was killed off in the 80's). I am going to move this to Ford Discussion though as it is not really mustang specific

GOFISCH

Holy cow, is that true about UAW members average salaries?

97svtgoin05gt

The time for the United States unions has come and gone. The problem is, for some reason, the auto industry is still the major area of American business taking Tyson blows for their continued existance.

Ford indeed has made a few mistakes:

1) Product cycle replacement historically speaking has taken entirely too long and they admit that. It seems this has been addressed.

2) Their reliance on gas guzzling products like SUVs and pickups has now bit them in the behind. I don't believe that we'll see SUVs we currently have in 2 years on any manufacturers floors. They are just too expensive from every angle. This recent gas issue has really ripped the rug right out from under the SUV sales. This same situation is really hurting GM at the moment.

3) Bills apparent reluctance to pare down his white collar manager count will cause more damage for several reasons. The UAW workers in plants know that these guys have been left alone for a long time. Are they more expensive than most UAW workers in plants? Yes, but how much more? We need less of both for long term survival.

4) Ford has very loyals customers, but seems to attract very few NEW customers. If you're going to put incentive plans out there, why not put one out there that lures in customers from OTHER MANUFACTURERS??? If you've got the money to dish out, put something in place that will grab the ear and eye of these people. Loyal Ford people can only buy so many cars. I believe to raise demand and successfully push things in the right direction, this is where we must focus.

Just my two cents. I would love to be involved and help get this thing moving. I don't live in Detroit though and that commute would kill me.

dke

That was according to Autoline detroit (this morning).

dke

Actually, I love that incentive plan. Get $4,000 off (the average cost of incentives for the last few months) if you bring a competitors late model car and use it for trade in. It would harm the competitors residual values because dealers would offer less for trade-in's -- and it would lure in people from other brands. He he. (Eeeexcelllent [rubbing hands together]).

Evil_Capri

I have read (on BON, and a couple other sources) that the Five Hundred has a ~30-40% new non-Ford customer buying rate. My wife swtiched to a Five Hundred after driving 3 Toyota's.

I would bet that the Fusion will have at least that high of a rate as well . . . .

MG01GT

I used to work for Ford here in Edison, N.J. and your salary quotes are way off. I made 16.50 to start and after 3 or 4 yrs. back then you maxed at 24.50 in 2001. I think now its at 26+ an hour. Now that's not bad at all with benefits included. My father is in skilled trades at Ford making more than any production linemen and he makes 30+ now. But please don't post wages when you never worked there or know anyone that did.

bob

I think thats a pretty fair wage me self also. I had always thought that a topped UAW worker would make closer to 50 or so an hour?

matic

Doing what? That one specific job might max at $24.50 (and depending on the job, that's probably grossly overpaid) but he was talking about averages across the board in all positions in the UAW. I don't think it's as high as he was saying, but it's a darn sight higher than $25/hour. UAW members are overpaid, period, their labor isn't worth what they demand. I wish our government would get serious about labor reform.

dke

The number I quoted came from an arbitrator/negotiator on Autoline detroit. The guy explained that the car companies need to track this stuff.

If you make $25/hour, nor remember that the company has to pay often like 25% more for taxes, and often need to double that for various benefits (healthcare, retirement, disability, etc.) in union shops. Plus there are issues with work hours, time off, and so on, that increases the costs compared to other jobs. (How many hours a day, versus vacation days, etc.). I could see $25 hour salary as approaching the $68 per hour number (cost to the company). And as others said, now spread it out over all jobs in all facilities.

dke

P.S. Here's the URL: http://www.autolinedetroit.tv/autoli...ives_2005.html

Go to show 924 (7/24) you can see the RealMedia stream online. It's in about 13 minutes -- he talks about $73/hour (including all legacy costs) for GM. For Ford and Chrysler it is a little less. (They don't call out that number -- but imply it is in the ballpark). Realistically, watch it to that point, because there are important points before the hourly rate talk.

As for Unions; they do some good, and do some bad. My wife belongs to one (Machinists) as she's a flight attendant, and it helps. The other side is that Unions cost companies tons, and prevent them from being more competitive and responsive in the industry; which hurts them and costs jobs. Unions in general mean slower growth and faster decay in downturns, fewer people employed, and unhealthier companies -- in return, they get better wages for those below. Is that a win? Depends on who you are.

To be fair -- the problems at Ford and other American auto companies run lots deeper than just the Unions. Er, Management anyone? Family run business? Regulations? Healthcare? Etc., etc.... but there's no doubt that Unions are a major cost and one of the problems.

dke

P.S.S. What I DESPISE about unions is forcing members to do certain things. Like robbing them of money, then giving it to politicians. In the last 5 years, Unions gave 20M to Republicans, and many many Billions to Democrats. The AFL-CIO spends up to 75% of their entire working budget in some years contributing to the DNC? That's not right to rob workers and forcing them to contribute to a party they may disagree with. Get them the heck out of politics (as far as contributions). It should be a law that they can not force membership, or take members money for political contributions.

http://www.nixguy.com/?p=887
http://workinglife.org/Articles/LATimes02202005.htm

1999 Black 35th GT

They are nice aren't they Jason! They have been flying off the lot! We only have about 4 left now

This sale has been great for Ford. People were hesitant on the new 500, but with this sale a lot of people have been snatching them up. AWD, CVT trans and better performance and handling than most of the competition makes them an excellent buy!

Shea

I agree about unions/politics. I've actually written a letter to my union complaining about their partisan mailings and such. Of course they said they were just doing it in my best interests, and I said, thanks, but my political leanings are my own business, I don't need you trying to convince me what to do. They didn't appreciate what I had to say.

pcfrisch

I also worked for Ford, if you account for benefits,wages, I can believe that figure, You have to remember that it also includes pensions and health insurance for retirees. I rememer Ford said earlier that it cost more per vehicle in health insurance than it does for the cost of the steel for the car.