Ford Market News

[kscarbel2]

Mulally: Ford 'will figure it out'

Amy Wilson, Automotive News  /  November 14, 2018

PHOENIX -- Despite the headwinds it faces today, Ford Motor Co. "will figure it out," the automaker's retired CEO, Alan Mulally, said Wednesday at an industry conference here.

"Ford, like everybody, is trying to figure out what's going on, and it's going to be messy," Mulally, 73, said at the National Auto Auction Association's annual convention, where he was the keynote speaker. "It's going to look messy because it is messy."

Mulally, who helped turn the company around a decade ago and then retired from Ford in 2014, homed in on efforts by Ford and other industry players with regard to new mobility services.

"You see everybody working the last-mile issue right now," Mulally said. "These bicycles are all over the place. I don't know if we're going to make money on that."

It's not just Ford, he said.

"The point is, everybody is working on this, about what transportation is going to look like," Mulally said. "And it's not going to be clear for a while. I think partnerships are going to be a really important part."

However, he expressed confidence that the answers will come.

"What I do know is, at Ford, it has the most talented people in the world, and they care," Mulally said. "They know they're working on something really important. And we're going to be there at the end, and we're going to figure it out."

Mulally did not weigh in on Ford's leadership changes since his departure nor the automaker's current restructuring efforts.

Ford ousted Mulally's successor, Mark Fields, in May 2017 and replaced him with current CEO Jim Hackett. In July, Hackett launched an $11 billion global restructuring of the company.

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[kscarbel2]

Ford and Walmart start autonomous-vehicle partnership

Pete Bigelow, Automotive News  /  November 14, 2018

Ford Motor Co. and Walmart Inc. have started a joint pilot to explore how they can use self-driving vehicles to deliver groceries and other consumer goods.

The automaker made the announcement Wednesday. The project has begun in the Miami area, where Ford has set up operations for a business revolving around autonomous vehicles that executives expect to launch commercially in 2021.

Over the next several months, Ford and Walmart will join forces to understand each other's operations and identify which goods are best for automated delivery. They'll examine vehicle configurations or modifications needed to meet customer demands.

"Like us, Walmart believes that self-driving vehicles have an important role to play in the future of delivery, and that true success comes from first learning how individuals want to use them in their daily lives," said Brian Wolf, business lead in Ford Autonomous Vehicles, a subsidiary set up to handle the automaker's self-driving business ventures. "Together, we'll be gathering crucial data about consumer preferences and learning the best way we can conveniently connect people with the goods they need."

Ford has conducted ride-hailing and delivery test operations since February in Miami, completing more than 1,000 deliveries while working with partners that range from national pizza companies to local dry-cleaning businesses.

One of those partners, delivery platform Postmates, will play a crucial role in the Ford-Walmart collaboration. Walmart has used Postmates and other networks to deliver groceries. Separately, Ford has worked with Postmates on vehicle dispatch and routing systems in its Miami pilot.

Because Ford and Walmart have worked with Postmates, the companies intend to use that infrastructure to get their pilot "up and running quickly," according to Ford.

Walmart deliveries

Delivery figures to play a key role in Walmart's future. As the retail behemoth competes with Amazon, which already offers fast home delivery to consumers, Walmart must figure out a way to match that convenience. The company has grocery delivery options available in 800 stores across 100 urban areas nationwide. The number of stores that offer delivery is expected to double next year.

This isn't Walmart's first automated-vehicle partnership. This year, the company began working with Waymo on a pilot from a store in the Phoenix area. Customers are brought to the store to retrieve their groceries in one of Waymo's autonomous Chrysler Pacifica minivans.

"For retailers like Walmart, it will be crucial to figure out how they'll be able to offer a better customer experience for automated deliveries, to basically find a way to survive and succeed in 21st century retail," said Sam Abuelsamid, senior transportation analyst for research firm Navigant. "Developing these partnerships with Ford and Waymo and others is crucial, and they need to do it now to understand what's going to work and what's not going to work."

More modifications?

Together, Ford and Walmart will examine what vehicle modifications would be necessary for grocery delivery, in which orders tend to be larger and more varied. They'll also see how many individual orders can be supported on a single trip, and what compartments are needed onboard to ensure orders are secured.

Ford has been developing a vehicle, expected to be unveiled soon, with its self-driving services in mind.

While there are no plans in place, it is conceivable that if Ford, Walmart and Postmates find success in Miami, they could replicate operations in other markets, such as Washington, which Ford has announced will be the second city where it will set up commercial operations involving autonomous vehicles.

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[kscarbel2]

Ford's blueprint to turn self-driving tech into profits

Pete Bigelow, Automotive News  /  November 15, 2018

With Waymo declaring it will launch a ride-hailing service with self-driving vehicles next month and General Motors indicating it will follow sometime in 2019, it is perhaps not surprising that some industry experts believe Ford Motor Co. trails the competition.

But Ford is punching back. Just because the company doesn't have plans to launch a commercial business with autonomous vehicles until 2021 does not necessarily mean the company is behind, argues Sherif Marakby, CEO of Ford Autonomous Vehicles, the subsidiary the company started to handle businesses underpinned by self-driving technology.

"If we wanted to launch 100 vehicles and call it a launch next year, we could do that," Marakby said Wednesday. "I don't think that's what we want to do when we get to the complexity of getting to profitability. We think it requires considering the entire value chain, and understanding customers, to call it a launch. We're talking launch at scale."

For Ford, that amounts to launching thousands of self-driving vehicles and quickly turning profits. In outlining a comprehensive blueprint of its market strategy during an event at its Miami test hub Wednesday, Marakby and other Ford executives focused on the business and operations under its program as much as the automated-driving technology.

"We are laser-focused on utilization and revenue, and that's what we call launch at scale," Marakby said. "Which I believe is different than what others are thinking."

Waymo will likely commence service with perhaps dozens or hundreds of customers culled from its Early Rider Program in the Phoenix area, according to a Bloomberg report this week. Through its Cruise Automation subsidiary, General Motors has been testing its autonomous mettle in San Francisco. Details of its 2019 planned launch remain unclear.

Ford intends to use purpose-built autonomous vehicles to carry both passengers and consumer goods.

$332 billion market

The company says it foresees a market worth $332 billion developing by 2026, in which ride-hailing revenues will account for $202 billion and delivery services valued at $130 billion. Along those lines, Ford hatched a partnership with Walmart on Wednesday in which the two companies will explore ways to collaborate on grocery delivery.

It's not Ford's first foray into delivery. It started testing pizza-delivery services using an autonomous vehicle with Domino's Pizza in Ann Arbor, Mich., last year. More recently, it added a partnership with Postmates, a delivery platform, in Miami, through which Ford works with approximately 80 companies to provide autonomous delivery options. Those range from national companies such as Domino's to local dry cleaners and florists.

Delivery is a major service Ford intends to approach the market. On Wednesday, the company described the steps it has taken so far -- and others that remain ahead -- to set up a business based upon autonomous vehicles.

Marakby said the company needs a scalable vehicle platform, which is slated to arrive sometime before 2021. It needs a capable automated-driving system, which is being built and honed by Argo AI, a Pittsburgh tech company in which Ford has invested more than $1 billion.

Fleet strategy

Beyond those requirements, Ford is developing a fleet-management strategy using its Miami hub as a test bed to determine the best ways to keep its vehicles in frequent use and maintenance operations concentrated. It has developed the Transportation Mobility Cloud with Autonomic, a company Ford acquired 11 months ago, which will provide optimized dispatch, routing and payment services. And it will seek to use vehicles for passenger and delivery purposes, which helps keep the cars rolling throughout the day.

Those are the necessary business components to evolve from a company testing technology to offering commercial service, Ford says.

The company also has a city-solutions division, which is forging connections and partnerships with transportation officials in cities where it plans to launch service. So far, the locations include Miami and Washington, D.C. Markaby said a third city will be added to its launch strategy sometime next year.

The current business model of selling cars to customers via dealerships generates a profit margin of anywhere from 6 to 10 percent, according to Ford. If there's skepticism on why traditional auto companies are chasing autonomous technology, Ford estimates the potential profit margin in an autonomous-vehicle business is "a level much higher than that," according to Marakby.

"We're going to work on building the future by building an autonomous-vehicle business," Ford CEO Jim Hackett said Wednesday. "That's the center."

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[kscarbel2]

Ford aims to simplify – again

Michael Martinez, Automotive News  /  November 19, 2018

Returning to a strategy that has worked before

Ford Motor Co. CEO Jim Hackett is channeling his inner Henry Ford to maximize profits on the next-generation Explorer: You can get any side-mirror color you'd like, as long as it's black.

The automaker is slashing the number of different mirrors, from 139 today to 25 on the 2020 model, by including blind-spot monitoring on every vehicle and using only gloss-black mirror caps instead of matching them to the exterior paint.

It's a small change but a telling example of how a rejuvenated Ford let itself fall out of shape after skirting bankruptcy — and the sort of bloat Hackett sees as a threat to Ford's "fitness."

Joe Hinrichs, Ford's president of global operations, last week described Hackett's strategy as a "more fundamental redesign than any time I've been at the company."

At the same time, such streamlining is by no means a new concept for Ford, which made similar cost-cutting pronouncements under Alan Mulally a decade ago.

Mulally vowed to cut the number of ways vehicles could be configured by more than half on 2009 models to help turn inventory faster. The Lincoln LS sedan, available in 50,000 varieties, was replaced by the MKS, with just 300.

But within a few years, Ford had reverted to old habits amid a product blitz and a desire to generate extra revenue from more optional equipment.

Bottom line takes a hit

"It's an age-old problem that never seems to get solved," said Michelle Krebs, senior analyst at Autotrader. "It appears they took their eyes off the ball when things got good."

Ford launched a record 23 new or updated vehicles in 2014, including a redesigned F-150 and Mustang. Hinrichs said the added complexity that more options created didn't fatten Ford's profits as much as anticipated.

Now those decisions are coming back to hurt the automaker's bottom line as the lineup has aged.

"We're not assuming we're going to get revenue for all that complexity and just go back to being simple about that configuration set," Hinrichs said last week at the Barclays Global Automotive Conference in New York. "There's a lot of learnings, as there always are, and now we're taking those learnings from North America and bringing them to the rest of the world."

Under Hackett's direction, Ford is using "yield management" techniques to closely monitor individual vehicle lines and adjust prices and inventory to certain markets to make more money. It's part of his global restructuring, which is expected to cost Ford $11 billion over the next three to five years.

The automaker has focused those techniques on its North American business, where a small team of executives gathers every Wednesday to study each nameplate and decide how to maximize its profits. The meetings prompted Ford to stop making a version of the Expedition with a smaller touch screen because it wasn't selling as quickly as the SUV with a larger screen.

'Part by part'

The automaker also has cut the orderable configurations of its Fusion sedan to about 30 instead of 2,000. Hinrichs said that has reduced the time it takes to deliver Fusions to 30 days from more than 80.

Similarly, Hinrichs said Ford is reducing the number of orderable combinations on the next-generation Escape to about 25 from around 1,000 now.

"We're going part by part and product by product to attack all this complexity in the business," Hinrichs said.

The moves have yet to convince Wall Street. Ford shares have fallen 22 percent this year, and investors at the Barclays conference questioned why these fairly straightforward moves weren't made years ago.

Hinrichs said it's all "part of manufacturing and auto 101" before admitting to mistakes made in the 2012-14 time frame.

"But like any business, there's an opportunity to see over time where you haven't stayed as fit or competitive as you've wanted to be, and you re-evaluate," he said. "You have to evolve to that next level."

[kscarbel2]

Ford's Detroit campus plan wins state tax breaks

Crain’s Detroit Business  /  November 28, 2018

[Michigan taxpayers to absorb $209 million for train station]

DETROIT -- Michigan's economic development board on Tuesday approved a 30-year tax abatement for Ford Motor Co.'s planned campus in Detroit's historic Corktown neighborhood that is the tax-incentive linchpin for the automaker's revitalization of the long-vacant Michigan Central Station.

The Michigan Strategic Fund's board signed off on Ford's application for a 30-year Renaissance Zone designation for the 18-story train station and its parking deck, the former Detroit schools book depository that is adjacent to the depot and the property of the former Lincoln Brass Works factory at 2051 Rosa Parks Blvd.

The tax breaks amount to $208.8 million -- or $6.95 million annually -- in property taxes that Ford won't have to pay over a period of 30 years that will begin in five years, according to the Michigan Economic Development Corp.

The Corktown properties currently generate less than $200,000 annually in taxes, according to a MEDC briefing memo to MSF board members.

The MSF board's approval of the Renaissance Zone designation is the final step toward Ford securing nearly $239 million in total tax breaks for the $740 million autonomous vehicle campus the automaker plans to establish in Corktown by 2022.

Ford appears to have more time, though, to bring 5,000 jobs to Detroit in exchange for the tax breaks.

The strategic fund's briefing document says Ford has pledged to bring 2,500 "direct jobs" to Corktown by Dec. 31, 2022 and another 2,500 employees of suppliers and "partners" by Dec. 31, 2028.

Ford "anticipates the bulk of the supplier jobs to be created or brought in by 2022," said Stacey Bowerman, vice president of business development projects for the MEDC.

Detroit City Council has approved tax breaks under the Obsolete Property Rehabilitation Act, a Commercial Rehabilitation District -- abatements valued at $27 million over 12 years, according to the MEDC memo.

Those tax breaks will effectively freeze the taxable value of the Corktown properties at current levels after the renovations and improvements are made.

City Council also approved an application for a Renaissance Zone, which exempts Ford from paying real and personal property taxes as well as Detroit's city taxes on corporate income and utility users.

Ford Land Development Co., the automaker's real-estate development arm, plans to tear down the 289,000 former brass factory on Rosa Parks Boulevard and build a new 500,000-square-foot to 600,000-square-foot office and research building.

Ford, which announced its purchase of Michigan Central Station in June, had pushed for quick approval of the tax breaks this fall from state and city officials in order to begin work constructing a temporary safety enclosure to dry out the weather-damaged train depot, which sat exposed to the elements for years.

Major rehabilitation and construction work at the train station is expected to begin in early 2019, according to the MEDC memo.

The brass factory property is adjacent to The Factory building at Rosa Parks and Michigan, where 250 Ford employees in the company's electric and autonomous vehicle divisions began working in late May.

Rehabilitation of the 273,000-square-foot former DPS book depository at 2231 Dalzelle St. is set to begin in early 2019. The onetime post office built in 1936 has sat vacant since a fire ravaged the building in 1987.

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[kscarbel2]

Two Ford plants losing shifts, but no layoffs planned

Michael Martinez, Automotive News  /  November 28, 2018

Ford on Wednesday said it will eliminate shifts at assembly plants in Michigan and Kentucky but give all affected workers jobs at other locations nearby.

About 500 workers will move from the Louisville Assembly Plant, which makes the Ford Escape and Lincoln MKC crossovers, to instead make Super Duty pickups and full-size SUVs at the Kentucky Truck Plant, also in Louisville.

The Escape plant will go from three shifts to two in the spring.

Around the same time, Ford's plant in Flat Rock, Mich., which makes the Mustang and Lincoln Continental southwest of Detroit, will go from two daily shifts to one. Most of those workers can transfer to the Livonia Transmission Plant, which will gain roughly 500 jobs, about 30 miles away. Another 150 workers will move from Flat Rock to other Ford facilities.

Ford said the moves will allow it to increase production of its profitable Expedition and Lincoln Navigator SUVs by 20 percent at Kentucky Truck. Ford earlier this year said it would build 25 percent more of the SUVs than it originally planned because of high demand.

Livonia Transmission supplies a number of vehicles, including the Ford F-150 and Ford Ranger.

Ford spokeswoman Kelli Felker said the automaker was not anticipating any job losses as all affected workers will transition to another Ford plant.

"Our collectively bargained contract provides for the placement of all members displaced by the shift reduction and, after working with Ford, we are confident that all impacted employees will have the opportunity to work at nearby facilities," UAW Vice President Rory Gamble said in a statement.

The moves come two days after General Motors said it plans to cut about 14,000 jobs by laying off 15 percent of its salaried employees and closing plants in Michigan, Ohio, Maryland and Ontario.

U.S. Rep. Debbie Dingell, D-Mich., whose congressional district includes Flat Rock, released this statement in response to Ford's announcement:

"While I am deeply disturbed at the elimination of a shift in my district, I appreciate Ford’s concern for their employees and their commitment to keeping jobs in the U.S.

"Democrats and Republicans must continue to work together to ensure we have a strong, healthy economy that supports workers, provides good-paying jobs, levels the playing field with strong consistent trade policies, and keeps our country as the world leader in transforming mobility."

[kscarbel2]

Ford seeks to skirt tariffs by speeding China-built Lincoln plan

Keith Naughton, Bloomberg  /  November 28, 2018

Ford Motor Co., banking on China to revive its long-lagging Lincoln brand, is trying to accelerate plans to begin building its luxury models there and avoid profit-sapping tariffs brought about by President Donald Trump’s trade war.

Ford, which had planned to start production of Lincoln models in China in late 2019 with a local partner, is trying to move that timing up, even if slightly, to help overcome tariffs China has imposed in retaliation to levies by the Trump administration.

“What we want to do is accelerate that,” Joy Falotico, head of Lincoln and Ford’s chief marketing officer, said in an interview. “We will look for opportunities, but it’s a big undertaking and I think it won’t be a significant change in our plans.”

Even a small move would help Lincoln, which lacks the local production most of its competitors have in China. Prices have soared as a result of the 40 percent tariffs the country has put on U.S.-built vehicles. Ford is absorbing some of those costs, but Lincoln’s sales have still slowed to a crawl.

Falotico spoke ahead of the unveiling of the three-row Aviator at the Los Angeles Auto Show on Wednesday. The model -- one of three SUVs Lincoln is launching in China -- will go on sale in the second half of next year in the country, as well as in the U.S.

Ford CEO Jim Hackett has said Trump’s metals tariffs will cost the automaker about $1 billion in annual profit. In August, the company scrapped a plan to export a new model called Focus Active from China into the U.S. Several of the automaker’s top executives have called for Trump to resolve its trade dispute with China.

Tariff headwinds

Lincoln is also reconsidering plans to export Chinese-built models back to the U.S., Falotico said. Instead, the automaker will likely build the same models in both countries. 

“It’s about ensuring our competitiveness with the pricing given the tariff headwinds,” she said.

The fallout from the trade war came at a bad time for Ford, which was pinning its hopes for growth on a country that it expects to become Lincoln’s top market. After soaring 66 percent last year, China deliveries for the luxury line are up just 3 percent through October, and slumped 6 percent last month.

Ford still believes there’s plenty of Chinese appetite for commodious SUVs, and Lincoln arrived in the market just four years ago, so the brand feels new there. It doesn’t suffer from the negative image it has in the U.S. -- that of an aged airport shuttle for business travelers.

Lincoln just introduced its mid-size Nautilus and updated compact MKC model crossovers at the Guangzhou auto show and expects to have 125 high-touch, tea-house style dealerships in China by year’s end.

Chinese tastes 

The Aviator was designed with Chinese tastes in mind. Ford lowered the door handles for the nation’s comparatively shorter travelers and styled the second and third rows to be more opulent than the front seats, since many wealthy consumers in the country have chauffeurs.

To meet China’s stringent new emissions rules requiring vehicles to be battery-powered, the most expensive version of the Aviator is a plug-in hybrid with an electric motor mated to a twin-turbo gasoline engine. The combination of the two power plants gives the SUV 450 horsepower, on par with the ponies Porsche offers in its plug-in Cayenne SUV.

“We’re not trying to be a race car,” John Davis, chief engineer of the Aviator, said in an interview. “But we know premium customers are really interested in performance, frankly, more than they’re interested in fuel economy. And in this case, they get both.”

Baked-in costs 

Packed with technology like the ability to use your smartphone as the car’s key and designed to resemble the downward slope of an airplane wing, the Aviator has the ability to propel Lincoln to “exponential growth” in China by 2020, Falotico said.

But Trump’s trade war with China may bring even Ford’s best-laid plans for the Aviator back down to Earth. Ford is baking the cost of tariffs into its business plan, presuming they won’t go away any time soon, Falotico said.

“We’re planning that what we have today is what we need to build our business around,” she said. “Any relief to that would be good news.”

[kscarbel2]

The irony is, just as Chinese consumers prefer to buy an Audi, BMW or Mercedes-Benz that was made in Germany, versus a China domestic joint-venture plant, they would also prefer a Lincoln with the "Made in USA" decal. Though China production quality is equal to the US, that "Made in China" decal lets half the air out of Ford's sales marketing balloon.

[Maxidyne]

One of the "benefits" of these stupid trade wars is tariffs that force local assembly of small market cars and trucks like Lincoln. The result is high costs due to multiple plants building the same vehicle at far less than plant capacity, resulting in higher costs that are passed on to the consumers.

[kscarbel2]

Morgan Stanley predicts Ford to cut 25,000 jobs in overhaul

Keith Naughton, Bloomberg  /  December 3, 2018

DETROIT -- Ford Motor Co.’s $11 billion restructuring could cost 25,000 employees their jobs, exceeding the cutbacks General Motors announced last week, according to Morgan Stanley.

Ford has yet to detail its job cuts, but Morgan Stanley analyst Adam Jonas predicts they could be larger than GM’s in a note to investors.

“We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion,” Jonas wrote. “But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and (Canadian union) workers.”

Ford’s 70,000 salaried employees have been told they face unspecified job losses by the middle of next year as the automaker works through an “organizational redesign” aimed at creating a white-collar workforce “designed for speed,” according to Karen Hampton, a spokeswoman.

“These actions will come largely outside of North America,” Hampton said of Ford’s restructuring. “All of this work is ongoing and publishing a job-reduction figure at this point would be pure speculation.”

Ford also is cutting shifts at two U.S. factories in the spring and transferring workers to plants building big SUVs and transmissions for pickups in moves that the automaker said will not result in job reductions. 

Jonas said other automakers will be forced to follow GM’s and Ford’s actions as the industry transforms, first to abandon factories building slow-selling sedans and ultimately to retool to build electric and self-driving vehicles.

“We believe existential business model risk will be prioritized over near-term profits and cash return,” Jonas wrote. “We still do not believe investor expectations have fully considered the near-term earnings risk.”

[Red Horse]

Hmnn- If you thought the recall rate was high before, just wait.  No doubt nothing like a flatter organization chart to speed up things-as long as the right people don't get cut.  And who will be the first to go?  The senior people.  And as always, some of them have been "hanging on"-but my bet is a lot of talent will hit the road.

Who will be left?- A lot of Hackett cheerleaders.

[j hancock]

Don't jinx me Bob.  I'm shopping for another SD F250

[Red Horse]

2 hours ago, j hancock said:

Don't jinx me Bob.  I'm shopping for another SD F250

Have no fears Jim-that 250 cake is already baked!  I worry about the new stuff being designed. Buddy of mine has a new one-loves that 6.2!

[kscarbel2]

VW says it might use Ford manufacturing capacity in U.S.

Automotive News & Bloomberg  /  December 4, 2018

WASHINGTON -- Volkswagen's CEO said on Tuesday after a meeting at the White House that the German automaker was building an alliance with Ford and that they might use the U.S. automaker's plants to build cars.

VW CEO Herbert Diess said the company was also "considering building a second car plant," adding, "We are in quite advanced negotiations and dialog with Ford to really build up a global automotive alliance, which also would strengthen the American automotive industry." 

Ford and VW said on June 19 they would explore a strategic alliance and they agreed to a memorandum of understanding at the time. Talks further intensified this fall, the automakers said in October.

Bill Ford, executive chairman of Ford, on Tuesday said: “We haven’t gotten that granular in our talks yet, but clearly we are talking with them.”

He said the talks were going “really well” and that “the culture fit is good.”

The automakers have said previously they are talking about potential collaborations across a number of areas.

VW has an assembly plant in Chattanooga, Tenn. Of the need for a new plant, Diess said the company is in "quite advanced negotiations in Tennessee but there might be other options as well."

Diess said VW would not take an equity stake in Ford as part of its alliance. "We are building an alliance with Ford which will strengthen Ford's position in Europe because we will share platforms," he said. "We might use Ford capacity here in the U.S. to build cars for us."

Diess said VW planned to talk more about the Ford alliance in January.

“We need additional capacity here in the United States, we need an additional car plant for VW and Audi combined,” Diess told reporters in Washington after meeting with President Donald Trump and trade officials.

Ford and VW have been in talks for more than a year about the German automaker investing in Argo AI, the American automaker’s self-driving technology partner, to jointly develop autonomous cars, according to people familiar with the discussions. The two automakers also are considering tie-ups to produce electric vehicles and share manufacturing in regions around the world, the people have said. 

“We’re having a very broad set of discussions about how we can help each other around the world,” Bob Shanks, Ford’s CFO, said in an October interview. “Collaboration isn’t being limited in any way whatsoever.”

Diess also said VW is in advanced negotiations in Tennessee, where the company already has a plant, about boosting its U.S. capacity, but that there could be other options. A decision could be made in early 2019, he said. 

Any agreement for VW to use Ford plants for production would presumably require negotiations with the UAW, which has been trying unsuccessfully to organize VW's plant in Chattanooga. 

UAW Ford Vice President Rory Gamble, through a spokesman, told Automotive News he would reserve comment on this issue "until he has formal discussions with Ford."

Diess was joined at the meeting by his counterpart at Daimler AG, Dieter Zetsche, and BMW Chief Financial Officer Nicolas Peter.

The carmakers have found themselves in harm’s way as Trump wields higher tariffs as a cudgel to rebalance trade with both China and the European Union. BMW and Daimler are the biggest car exporters from the U.S. to China, while VW’s two most profitable brands, Porsche and Audi, would get hammered if Trump follows through with a potential 25 percent levy on imports from the EU.

“That’s basically why we are here, to avoid the additional tariffs and I think we’re in a good way,” Diess said.

The three carmakers have no official role in the overall trade talks between U.S. and EU trade officials, and stressed that at the end of their meetings. The companies are trying to avoid becoming entangled in the talks but they accepted the invitation extended by a Trump administration eager to jump-start progress on its highest priorities. 

“We weren’t here as a trade delegation,” Zetsche said.

“We said in general terms that our planned additional investments here that are not commercially sensible per se of course would have to be part of a larger understanding and for that the conditions under which we operate cannot change. That was very well understood,” Zetsche said.

Trade deficit 

The White House is looking to whittle down a $30 billion automotive trade deficit with Germany with increased production in the U.S., Commerce Secretary Wilbur Ross said ahead of a meeting with automakers in Washington Tuesday. It remains the biggest single chunk of an overall $65 billion trade deficit with the EU.

All three carmakers met separately with Trump’s key lieutenants on trade, including Ross, U.S. Trade Representative Robert Lighthizer and economic adviser Larry Kudlow, before a joint meeting that followed. They then met with Trump in the Oval Office.

“The president shared his vision of all automakers producing in the United States and creating a more friendly business environment,” Lindsay Walters, a White House spokeswoman, said.

Daimler, the maker of Mercedes-Benz luxury cars produces vehicles in Tuscaloosa, Ala., shipping many of its SUVs made there to China. Daimler employs some 3,700 workers at the U.S. site, which can churn out more than 280,000 vehicles per year, including GLE and GLS SUVs for global markets and C-class sedans for North America.

[kscarbel2]

Ford CEO discounts job-cut report, promises more news this week

Keith Naughton, Bloomberg  /  December 5, 2018

DETROIT — Ford Motor Co.'s CEO downplayed a report that the automaker may cut 25,000 jobs and said he'll have more news to share later this week.

CEO Jim Hackett told reporters Tuesday that Ford didn't provide numbers to Morgan Stanley analyst Adam Jonas, who estimated the significant employee reduction in a report a day earlier. Ford said in July it would spend three to five years on an $11 billion restructuring.

Ford will make an interim announcement about plans for its workforce later this week, Hackett told reporters in Michigan. General Motors announced last week it will cut more than 14,000 employees and close seven factories worldwide by the end of next year.

[Red Horse]

Hmnn. Bill Ford said..."the culture fit is good".   I guess he hasn't heard about the diesel caper yet😎

[kscarbel2]

Ford begins European restructuring with management shakeup

Nick Gibbs, Automotive News Europe  /  December 7, 2018

LONDON -- Ford has taken the first step in restructuring its money-losing European business that is expected to involve axing models, cutting jobs, and possibly factory closures.

Ford has appointed executives in Germany and the UK to implement its plan, called “Sprint to 6 Reset and Redesign,” the automaker said in a news release on Friday.

The name refers to Ford’s aim to reach a 6 percent EBIT profit margin. The company did not give a timeframe for the target.

Ford said its former head of quality, Gunnar Herrmann, will head the restructuring in Germany, while Graham Hoare will carry out the same task in the UK. Hoare was previously responsible for Ford’s test and development operations worldwide.

The bulk of announcements around the restructuring are expected between now and the beginning of 2020, a Ford spokesperson said.

Ford has said the European plan will involve concentrating on its profit-making SUVs and commercial vehicles and cutting unprofitable model lines. The company will also rely more heavily on partnerships to keep down costs.

Ford and Volkswagen Group have said they are discussing an alliance for commercial vehicles. This may be broadened to include potential collaboration on autonomous driving and arrangements to make vehicles for one another, Bloomberg reported in October. Ford has not confirmed that.

Ford already has a long-term partnership with PSA Group to share engines.

Ford lost $245 million in Europe in the third quarter, compared with a loss of $53 million in the same quarter last year. This was due to weakness in Turkey and Russia, and launch-related costs for the latest Focus compact car, the company said on Oct. 23.

Morgan Stanley estimates the bulk of Ford’s $11 billion global restructuring plan will center on Europe and the region will suffer the bulk of 25,000 global job losses it believes Ford is planning. It values Ford’s European business at “negative $7 billion,” Morgan Stanley analyst Adam Jonas said in a note.

Ford called the Morgan Stanley job cut estimates “pure speculation.” However, the automaker has said its restructuring would happen “largely outside of North America.”

In July, Ford’s Chief Financial Officer Bob Shanks said the bulk of Ford’s European vehicle range was unprofitable. This consisted “principally of cars and multi-activity vehicles [minivans] such as C-Max,” he said. Ford’s Transit van, Kuga SUV and Ranger pickup and “selected imports” are selling profitably in Europe, Shanks said, without naming the imported vehicles. They are likely to include the Edge midsize SUV and the Mustang sports car.

Jim Farley, Ford’s head of global markets, said commercial vans are earning 13 percent profit margins for the automaker in Europe. He acknowledged that Ford has been slow to expand in the SUV segment in Europe.

Ford has said it expects a full-year loss in 2018 in Europe after earning $234 million in the region last year as it battles headwinds such as the weak pound in the UK, its biggest European market, high raw material costs and a slump in demand for once-core models.

Ford has about 54,000 employees in Europe and 24 manufacturing facilities, data from the company shows.

[Maxidyne]

Similar "cost savings" at VW Group: https://www.autocar.co.uk/car-news/industry/volkswagen-plans-“significant”-cost-savings-invest-future

Wondering if this means Ford and VW will be paring duplicative operations in advance of the proposed partnership... Or is the deal off?

[kscarbel2]

VW-Ford talks are gaining steam

Michael Martinez, Automotive News  /  December 10, 2018

DETROIT — As Ford Motor Co. has tried to downplay its ongoing talks with Volkswagen Group, VW CEO Herbert Diess keeps upping the ante.

Besides the potential for cooperating on commercial vehicles and sharing platforms for electric vehicles and pickups, Diess last week revealed that VW is eyeing access to Ford's U.S. manufacturing footprint, too.

Since June, VW and Ford have been exploring a strategic alliance that could alter the global automotive landscape. Ford is looking to shed money-losing operations and streamline its work force, and sharing costs on redundant operations with VW would help speed that overhaul. VW, in turn, wants to increase its U.S. production and could use the help of an automaker well-versed in building the type of rugged SUVs and pickups that American buyers demand.

After months of Ford demurring on any discussion of what the talks could produce, Diess' comments about using some Ford plants led Executive Chairman Bill Ford to acknowledge that something important might be budding.

Ford said he didn't want to overstate the companies' progress but that the talks were going "really well." He added: "The culture fit is good."

That's no small endorsement in an industry that has had all manner of alliances, partnerships and mergers collapse because the participants couldn't mesh.

Ford, like many automakers, has been working to keep up with shifts in consumer behavior that threaten to upend the delicate balance between demand and manufacturing capacity. General Motors has too many underused plants, and Fiat Chrysler Automobiles is so maxed out that it might open Detroit's first new assembly plant in 27 years.

Ford's phaseout of sedan production and shift to more light trucks has left it with some openings that VW could fill, but Diess' options are much more limited than they would be at GM.

Most of Ford's U.S. plants are humming along at — and in some cases, over — ideal capacity. LMC Automotive says the automaker's North American utilization rate, including plants in Mexico and Canada, is at an impressive 81 percent.

"We really manage that tightly," Ford CEO Jim Hackett told reporters last week. "I'm proud where we're at in our utilization right now."

Both automakers declined to elaborate on Diess' comments, but factoring in what they have said about a potential tie-up, only three U.S. Ford plants — two in Michigan and one in Missouri — could realistically accommodate VW production.

In June, the companies said their alliance would cover joint development of commercial vehicles for Europe. Diess later confirmed that VW was considering a global successor to its Amarok pickup based on Ford's Ranger, and Bloomberg has reported that the two may also collaborate on autonomous vehicles.

3 plants

All of those actions involve operations at Ford's plants in Michigan and Missouri. The likeliest candidate to be involved is Michigan Assembly, which is newly converted to build body-on-frame Ranger pickups and Bronco SUVs.

Jeff Schuster, LMC's president of global forecasting, said the plant's 400,000-unit annual capacity would leave room for more product even after the Ranger ramps up and Bronco output begins.

It also would fill a weakness in VW's U.S. lineup. VW's Chattanooga plant builds the unibody Atlas crossover and the Passat sedan. VW is debating whether to offer its U.S. dealerships a small body-on-frame pickup based on the Ranger or a unibody pickup that would closely follow the Tanoak concept unveiled in March. Diess in November told Automotive News that a unibody pickup in the U.S. was "probably still a bit risky," but that the final decision would be up to VW's new North American CEO, Scott Keogh.

Ford's Flat Rock Assembly Plant in suburban Detroit could be another option. It's the sole global source of the Mustang and Lincoln Continental, but Ford is cutting output to one daily shift in the spring because of weak demand. Even on two shifts today, Flat Rock has a utilization rate of only 49 percent, according to LMC.

New product is on the horizon for Flat Rock, however. The site is getting a $900 million investment to build Ford's commercial autonomous vehicle slated for 2021. If VW wanted to partner on self-driving vehicles, that work likely would happen in Flat Rock.

The Kansas City Assembly Plant in Missouri, running at just 63 percent utilization, also would make sense. It builds the F-150 and Transit, two huge players in the commercial-vehicle market in which VW is interested. Ford idled its Transit line for two weeks in October in response to slower commercial orders.

Plenty of room

Questions about possible plant sharing remain. VW has plenty of room at its North American plants, which are running at 71 percent capacity.

It's unclear how much volume VW is looking to add, as well as what workers it would use. Any agreement presumably would require approval from the UAW, which has been trying unsuccessfully to organize VW's Chattanooga plant.

Diess made his comments during a visit to the White House to discuss the company's U.S. ambitions, as President Donald Trump presses for more investment in manufacturing here.

"I think there's certainly some political posturing — 'Look at us. We love the U.S.' — so I think it was done very deliberately around that meeting," Schuster said. "But coming from a German company that probably needs to be careful with what it says and does right now, I would be shocked if that was said without some substance behind it."

----------------------------------------------------------------------------------------------------

Capacity issues

Shifts in consumer demand have made it harder for the Detroit 3 to keep their plants running efficiently. Ford could share some underused plants with VW, GM has too many car plants running inefficiently and FCA needs more capacity to make Jeeps.
Plant	2018 utilization
Ford
Avon Lake	87%
Chicago	152%
Dearborn Truck	115%
Flat Rock	49%
Kansas City (van)	63%
Kansas City (pickup)	102%
Kentucky Truck	102%
Louisville	91%
Michigan	25%
GM
Arlington	138%
Bowling Green	27%
Detroit-Hamtramck	37%
Fairfax	48%
Flint	84%
Fort Wayne	78%
Lansing Delta Township	89%
Lansing Grand River	33%
Lordstown	30%
Orion	34%
Spring Hill	80%
Wentzville	124%
FCA
Belvidere	95%
Jefferson North	130%
Sterling Heights	92%
Toledo North	87%
Toledo Supplier Park	9%
Warren	46%

 

 

[TS7]

Ford - Avon Lake Plant, 87% capacity, 100% commercial vehicles.

[Red Horse]

3 hours ago, TS7 said:

Ford - Avon Lake Plant, 87% capacity, 100% commercial vehicles.

Yes-kind of surprised by that. And production of 650/750 is low so it muct be all the 450/550 chassis that were moved there.

[TS7]

Ford Sterling Axle Plant (MI), Super Duty axle line running at max. Ford KTP ( Super Duty F-250-350 ), 110% capacity. Ford Michigan Truck (Ranger ), started October, building more every day. Ranger sales start in January, Ranger will out sell GM in 2020. And Transit will pick back up, it is the best van sold in the US by far. Ford, the best never rest.    

[kscarbel2]

Ford in talks with German workers about job cuts

Reuters  /  December 10, 2018

FRANKFURT -- Ford said it had started negotiations with German worker representatives about potential job cuts at its Saarlouis plant as the automaker considers discontinuing production of its Ford C-Max and Grand C-Max compact minivans.

"We can confirm that we are entering into formal negotiations with our works council with the objective of ending production of C-Max/Grand C-Max at Saarlouis," Ford said in a statement.

Ford said no formal decision has yet been reached on whether to discontinue production of the minivans. But discussions will explore the consequences of such a step on the plant's workforce.

"As we continue to match production to consumer demand, the consultation process also will include necessary adjustments to the workforce at Saarlouis," Ford said.

Ford will continue production of the Focus at the factory.

The automaker wants to reduce production from three shifts to two, which would mean the loss of 1,600 jobs, German press reports said. Saarlouis employs more than 6,190 staff, but the minivan van segment is shrinking and tougher emissions rules will require costly investments. "Keeping the vehicle compliant with all regulatory obligations would require a very high level of investment for this model," Ford said.

Ford plans to restructure its money-losing European business to focus on its profit-making SUVs and commercial vehicles. It has appointed executives in Germany and UK to implement the plan, called “Sprint to 6 Reset and Redesign.” Its former head of quality, Gunnar Herrmann, will head the restructuring in Germany, while Graham Hoare will carry out the same task in the UK. Hoare was previously responsible for Ford’s test and development operations worldwide.

The bulk of announcements around the restructuring are expected between now and the beginning of 2020, Ford has said.

Ford and Volkswagen Group have said they are discussing an alliance for commercial vehicles. This may be broadened to include potential collaboration on autonomous driving and arrangements to make vehicles for one another, Bloomberg reported in October. Ford has not confirmed on that.

Ford lost $245 million in Europe in the third quarter, compared with a loss of $53 million in the same quarter last year. This was due to weakness in Turkey and Russia, and launch-related costs for the latest Focus compact car, the company said in its third-quarter earnings call on Oct. 23. Ford has said it expects a full-year loss in 2018 in Europe as it battles headwinds such as the weak pound in the UK, its biggest European market, high raw material costs and a slump in demand for once-core models.

[Red Horse]

2 hours ago, TS7 said:

Ford Sterling Axle Plant (MI), Super Duty axle line running at max. Ford KTP ( Super Duty F-250-350 ), 110% capacity. Ford Michigan Truck (Ranger ), started October, building more every day. Ranger sales start in January, Ranger will out sell GM in 2020. And Transit will pick back up, it is the best van sold in the US by far. Ford, the best never rest.    

All good news-will be interesting to see how the new Sprinter does.  You can bet there is a lot of reverse Transit engineering in that. Older Sprinters I see running around here are rust streaked!

Wonder where MB mounts the batteries as Transits are under driver's seat-not pretty.

[TS7]

Red Horse, I talked to Ford Exc. today  who runs Axle lines at Sterling Plant, Super Duty axle line running "balls to the wall". They were sending axles by airplane to KTP last week to keep up. F-150 line same thing, Dearborn Truck ( F-150 ) 115% capacity is about 25 miles away, trucks get there faster than airplanes for now. Also he has driven ( has a 2018 F-150 now ) a new 2019 Ranger, he likes it a lot, Ford plans to sell a lot of Rangers. Michigan Truck is a very large plant. Every Sprinter I see around here is rusted and expensive to repair. MB parts are not cheap. Ram vans? The old Dodge Tradesman Van was better.