Ford Truck- Zero Production
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04-09-2002, 03:48 PM
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Ford Truck- Zero Production
ANALYSIS-Ford Motor Co -- "stopping the bleeding"
By Tom Brown
DETROIT, April 5 (Reuters) - Ford Motor Co. (NYSE:F - news) took the unusual move this week of reporting that it produced no vehicles at all last month at Michigan Truck, a sprawling factory outside Detroit once known as the most profitable auto assembly plant on Earth.
But like Ford itself -- which many industry analysts believe will succeed in turning itself around after last year's tailspin -- production from Michigan Truck is due to come roaring back to life later this spring.
``They've been in the hospital, in intensive care, but they're not critical,'' Gerald Meyers, a University of Michigan business professor, said of the world's second-largest automaker.
Meyers, who headed American Motors Corp. before it dissolved in the 1980s, knows some of the challenges Ford faces as an ailing industrial giant in a brutally competitive business environment.
And he is among auto industry experts who believe the turnaround plan Ford announced in January gives it a chance of returning to profitability after last year's massive losses.
``I know there's been criticism about their plan being weak or insufficient. It is not. It's an aggressive plan, a courageous plan,'' said Meyers.
Skeptics say the plan, which will eliminate 35,000 jobs and close at least three North American assembly plants, fails to cut deep enough to meet profit targets, including break-even in 2002 and annual pretax operating profits of $7 billion by the middle of the decade.
But many analysts say the plan, with its back-to-basics focus on core business and products, along with increased factory utilization and strategic asset sales, is just what Ford needs to get itself back on track.
``They did the right thing in terms of the restructuring and not trying to go too fast,'' said Scott Hill, an auto analyst at Sanford C. Bernstein.
``They could have done a lot of things more draconian, on a short-term basis, to improve earnings and cash flow. But if they had done that, then they would have been right back into the soup two years from now,'' Hill said.
``In our view, it's a fair balance between short-term issues, of stopping the bleeding and getting the cost structure put right over the next three years, but not impinging on the ability to actually turn the program around through a product- led recovery.''
PRODUCT IS KING
Product is king in Detroit as General Motors Corp. (NYSE:GM - news) has shown since last year, leveraging a strong new lineup of pickup trucks and sport utility vehicles into profits.
It is also something Ford is notoriously short on right now, in terms of new high-volume cars and trucks that can sell without the aggressive incentives currently eroding the bottom line at all U.S. automakers.
But Ford's share of the U.S. vehicle market is currently about 20 percent and if it can hold onto anything close to that it should benefit from stronger-than-expected vehicle sales this year.
``Ford's got one thing going in its favor big time right now and that's that the economic recovery is taking hold faster than people thought and volumes are holding up,'' said Hill, who has an ``outperform'' rating on Ford's stock and expects the company to make a profit in the latter part of this year after a dismal first half.
Ford's shares were trading at $15.07 late Friday afternoon on the New York Stock Exchange, down about 47 percent from a year ago.
The newly redesigned Ford Expedition and Lincoln Navigator full-size SUVs, which will soon go on sale, should help it pull through a new-product dry spell. And a new version of the Ford F-Series pickup truck, America's best-selling vehicle, is due out next year.
Ford has been plagued by botched or delayed product launches for the last two years and embarrassing quality problems that contributed to the ouster in October of Jacques Nasser, the company's hard-charging former chief executive.
But Ford's Chief Operating Officer Nick Scheele, who is leading its turnaround effort, is keenly aware of the need to improve quality and have flawless launches.
The first big test for Scheele will come at Michigan Truck, where Ford has quietly and slowly been building new Expeditions and Navigators for the last month. Ford's monthly production report, released Thursday, listed Michigan Truck's March output as ``0'' because the vehicles are being held at the plant, while engineers and quality experts go over them with a fine-toothed comb to ensure they are debugged and as close as possible to perfect.
DOING THE RIGHT THING
It is an expensive way to role out new or ``refreshed'' vehicles in an industry that prides itself on the speed and cut-rate efficiency of the modern assembly line. But sources at the plant say it is the right thing to do and totally unlike the way they operated under the cost-conscious Nasser, whose nickname was ``Jac the Knife.''
``This launch is the most critical launch for Ford in many, many years,'' Richard Feldman of the United Auto Workers union and plant chairman at Michigan Truck, told Reuters during a recent visit.
``The is going to be the showcase and the beacon that we can run quality,'' he said. ``Michigan Truck, with the support of the UAW, is going to turn around Ford Motor Co.''
By Tom Brown
DETROIT, April 5 (Reuters) - Ford Motor Co. (NYSE:F - news) took the unusual move this week of reporting that it produced no vehicles at all last month at Michigan Truck, a sprawling factory outside Detroit once known as the most profitable auto assembly plant on Earth.
But like Ford itself -- which many industry analysts believe will succeed in turning itself around after last year's tailspin -- production from Michigan Truck is due to come roaring back to life later this spring.
``They've been in the hospital, in intensive care, but they're not critical,'' Gerald Meyers, a University of Michigan business professor, said of the world's second-largest automaker.
Meyers, who headed American Motors Corp. before it dissolved in the 1980s, knows some of the challenges Ford faces as an ailing industrial giant in a brutally competitive business environment.
And he is among auto industry experts who believe the turnaround plan Ford announced in January gives it a chance of returning to profitability after last year's massive losses.
``I know there's been criticism about their plan being weak or insufficient. It is not. It's an aggressive plan, a courageous plan,'' said Meyers.
Skeptics say the plan, which will eliminate 35,000 jobs and close at least three North American assembly plants, fails to cut deep enough to meet profit targets, including break-even in 2002 and annual pretax operating profits of $7 billion by the middle of the decade.
But many analysts say the plan, with its back-to-basics focus on core business and products, along with increased factory utilization and strategic asset sales, is just what Ford needs to get itself back on track.
``They did the right thing in terms of the restructuring and not trying to go too fast,'' said Scott Hill, an auto analyst at Sanford C. Bernstein.
``They could have done a lot of things more draconian, on a short-term basis, to improve earnings and cash flow. But if they had done that, then they would have been right back into the soup two years from now,'' Hill said.
``In our view, it's a fair balance between short-term issues, of stopping the bleeding and getting the cost structure put right over the next three years, but not impinging on the ability to actually turn the program around through a product- led recovery.''
PRODUCT IS KING
Product is king in Detroit as General Motors Corp. (NYSE:GM - news) has shown since last year, leveraging a strong new lineup of pickup trucks and sport utility vehicles into profits.
It is also something Ford is notoriously short on right now, in terms of new high-volume cars and trucks that can sell without the aggressive incentives currently eroding the bottom line at all U.S. automakers.
But Ford's share of the U.S. vehicle market is currently about 20 percent and if it can hold onto anything close to that it should benefit from stronger-than-expected vehicle sales this year.
``Ford's got one thing going in its favor big time right now and that's that the economic recovery is taking hold faster than people thought and volumes are holding up,'' said Hill, who has an ``outperform'' rating on Ford's stock and expects the company to make a profit in the latter part of this year after a dismal first half.
Ford's shares were trading at $15.07 late Friday afternoon on the New York Stock Exchange, down about 47 percent from a year ago.
The newly redesigned Ford Expedition and Lincoln Navigator full-size SUVs, which will soon go on sale, should help it pull through a new-product dry spell. And a new version of the Ford F-Series pickup truck, America's best-selling vehicle, is due out next year.
Ford has been plagued by botched or delayed product launches for the last two years and embarrassing quality problems that contributed to the ouster in October of Jacques Nasser, the company's hard-charging former chief executive.
But Ford's Chief Operating Officer Nick Scheele, who is leading its turnaround effort, is keenly aware of the need to improve quality and have flawless launches.
The first big test for Scheele will come at Michigan Truck, where Ford has quietly and slowly been building new Expeditions and Navigators for the last month. Ford's monthly production report, released Thursday, listed Michigan Truck's March output as ``0'' because the vehicles are being held at the plant, while engineers and quality experts go over them with a fine-toothed comb to ensure they are debugged and as close as possible to perfect.
DOING THE RIGHT THING
It is an expensive way to role out new or ``refreshed'' vehicles in an industry that prides itself on the speed and cut-rate efficiency of the modern assembly line. But sources at the plant say it is the right thing to do and totally unlike the way they operated under the cost-conscious Nasser, whose nickname was ``Jac the Knife.''
``This launch is the most critical launch for Ford in many, many years,'' Richard Feldman of the United Auto Workers union and plant chairman at Michigan Truck, told Reuters during a recent visit.
``The is going to be the showcase and the beacon that we can run quality,'' he said. ``Michigan Truck, with the support of the UAW, is going to turn around Ford Motor Co.''
#2
04-09-2002, 04:35 PM
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Speaking of the new F150's, I was reading in motor trend or truckin, cant remember which one, that they were starting the new F150's next year. So does anyone have any pics of the new design or heard anything else about it besides the fact that they are revamping it. BTW, i like how the article starts out, "NO trucks built at plant last months" when in reality you come to find out that they were building plenty just not shipping them. I hope they can easily pull out after their 5.7 billion dollar loss last year. If worse came to worse they could always sell off one of their recently acquired divisions. Although I would hate to see that. Also what is the deal with the new 6.0L diesel that is comin out next year or maybe in two years where can I get some specs on it.
#4
04-09-2002, 07:35 PM
