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They are precarious enough that I think their all-truck focus will make them the weakest on the market when fuel prices rise or fads change to whatever the next hot body style is. Were I playing the stock market, I certainly wouldn’t play a long game on Ford.
They are precarious enough that I think their all-truck focus will make them the weakest on the market when fuel prices rise or fads change to whatever the next hot body style is. Were I playing the stock market, I certainly wouldn’t play a long game on Ford.
They don't have an all-truck focus, not in the sense that caused GM to tank years ago. The 2020 Escape averages 30 mpg.
Crossovers have been gaining popularity steadily for 20 years at least. They aren't a fad.
Ford has a better product line than many auto companies, but, yes, it could still file for bankruptcy. It needs to work on reliability and fit and finish.
I do not think Ford is on the brink, but they are facing the same huge financial challenges as the rest of the auto industry. The need to pour tons of R&D money into future powertrains for battery and electric drive as well as technology for things like autonomous drive, without any short term way to turn those investments into profits.
That is straining every automakers budget, because the real payoff is years (if not decades) down the road.
There are some good things going at Ford which will keep them going. F150 remains strong. They have found a formula for Lincoln which has turned the whole division around, and those products sell for a pretty enticing profit margin for Ford.
Yes, they have and that formula consists of two important ingredients - 1) the awesomely talented and very cool Matthew McConaughey and 2) very sharp, well-polished, and attractive vehicles people actually want to drive.
I don't see him shilling doo-doo products for the Ford division but for enough money, who knows?
cnn isn't even involved here, not sure why people keep invoking them and ranting about them? Furthermore, i provided citations from the wall street journal and mentioned credit downgradings for ford from both moody's and standard & poor's and furthermore i provided data from a general car sales data database showing ford's sales in china have fallen by about 680,000 units annually, in just the past 3 years.
People can just go right ahead denying the data and invent some kind of conspiracy theory to explain it away if they like (and as is the norm at city data forum, many prefer that method of understanding the world around them). But ford is in a difficult position, that's the reality. This one journalist may be exaggerating when they say "bankruptcy is a foregone conclusion", but things aren't going great at the big blue oval.
It is surprising because it was only about a decade ago that they seemed in pretty good shape - the crash was 2008-2009, and Ford weathered it on their own. I think Ford is fundamentally not in great shape today.
Ford laid off 1/3 of their workforce during the 2008-9 recession, many of those with significant experience working with Ford's internal systems/processes/bureacracies. After the recession, Ford began hiring all fresh college graduates to backfill those laid off. The new hires have no idea how to deal with Ford's complex internal systems - hence the chaos the company is in now.
But that is how the industry works! Just like Pharma there is a ton of upfront R&D to develop the technology prior to production. Then you have a ton of capital (cap ex) upfront before you can build out the production lines. Going from ICE to EV will be an incredible cash strain for all auto manufacturers that make the leap.
This may explain why Toyota has been taking a more middle of the road approach in building out their hybrid platform instead of going all in for EVs.
Yes, and pharma companies, especially smaller ones that aren't big enough to afford to carry a large portfolio of development programs to insulate them from inordinant effects from the failure of any given one... they regularly fail and go bankrupt. I work at a smaller pharma now that is a spinoff, and we have more than one shot on goal with our R&D pipeline, but if we don't get a win with one of this handful of programs pretty soon, we're going down. That's really all I am trying to say with Ford - they have had large expenditures relative to their gross revenues, both for their restructuring as well as their ambitious new EV programs, and if those EV programs struggle, they could be in some real trouble.
I think a more cautious approach, if that's what Toyota is doing, is smart. You don't want to ignore market trends and fall too far behind, but you also don't want to spend so much money on a bold approach that it's success must come soon and is going to be make or break for the company financially. Realistically, your first attempts, may be off, you may not hit a home run on your first at-bat. You might even strike out with that first at-bat. That shouldn't be something that you bet the company on, if there are other options.
CNN isn't even involved here, not sure why people keep invoking them and ranting about them? Furthermore, I provided citations from the Wall Street Journal and mentioned credit downgradings for Ford from both Moody's and Standard & Poor's and furthermore I provided data from a general car sales data database showing Ford's sales in China have fallen by about 680,000 units annually, in just the past 3 years.
People can just go right ahead denying the data and invent some kind of conspiracy theory to explain it away if they like (and as is the norm at City Data Forum, many prefer that method of understanding the world around them). But Ford is in a difficult position, that's the reality. This one journalist may be exaggerating when they say "bankruptcy is a foregone conclusion", but things aren't going great at the big blue oval.
There's a big difference between "not going great" and "on the verge of bankruptcy." Saying BK is a foregone conclusion is as ridiculous as a conspiracy theory.
Quote:
The “tell” here is that Moody’s also called Ford’s outlook “stable,” noting it has $23 billion in cash and under $12 billion in “automotive debt” taken out for the company.
There's a big difference between "not going great" and "on the verge of bankruptcy." Saying BK is a foregone conclusion is as ridiculous as a conspiracy theory.
But I am not the one who said it's a foregone conclusion. And right from the start, I indicated that this was likely overstating things, and I also presented a lot more information, from other sources. Because to me, if Ford, a big important company, is having some trouble now, and they are facing significant risks ahead in the next couple of years, that's newsworthy, it's important, and it's worth examining and discussing a little bit.
Some people have some knowledge and have provided some helpful context, others have at least considered what I have written and the information out there and provided thoughtful responses. But others just read the first few words of the headline, they don't know anything about the underlying story, they also don't care to learn anything about the underlying story, but oh boy, they have very strong opinions anyway, based on either general pent-up political anger or general paranoia, and they want to rant. It's that last group that I find pretty tiresome.
Last edited by OutdoorLover; 01-29-2020 at 03:29 PM..
Why do people think "junk bond" credit rating means bankruptcy? Ford and other car makers have been there plenty of times before.
Why is Ford still paying a $0.15 per share quarterly dividend if bankruptcy is a possibility? Dividends come out of profits. So if you have profit, where does bankruptcy come from? Underpants gnomes?
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