Ford

[timhood]

That't not entirely how this works. In the chip sector, they place orders for time allocations of their forecasted hardware needs, it isnt about paying up front and having stock, that isnt how that works at that multi thousand unit levels. Chip manufacturers have to know way ahead of time how much time will be allocated to fulfilling their orders.

What you stated is exactly what I said. That's just-in-time inventory. Just-in-time inventory doesn't mean last-minute ordering.

Regardless, how exactly would that have changed this situation? Ford says, "We want 20K chips per month for all of 2021." Then COVID happens, the factories are shut down or severely curtailed and Ford doesn't get their chips regardless of whether they ordered 10K, 20K or 100K.

At worst, Ford underestimated the demand for Bronco prior to July 13, 2020. Long before they ever would have committed to an order for chips, they well knew the numbers they would like to have built. In all likelihood, they asked for more than they are being allotted. Just because you want something, doesn't mean you get it.

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[timhood]

The Wall Street Journal is confused too. Here's an excerpt since it's behind a paywall:

The confusing thing is that Ford produced 17% fewer vehicles than planned in the first quarter and yet generated far more profit than the company expected. Against a backdrop of strong consumer demand, an undersupply of vehicles as a result of last year’s pandemic-related shutdowns and this year’s chip-related ones is pushing up prices across the industry. Ford made 7% more automotive revenue than in the first quarter of last year by selling 6% fewer vehicles. Skyrocketing used-car prices also boosted its finance arm.


The message from the company Wednesday was that these conditions can’t last. It is assuming automotive operating margins, which reached 12.8% in North America in the quarter, will normalize as purchase incentives creep back up and rising commodity prices feed into raw-material bills. It also expects used vehicle inflation to moderate.

I haven't looked at Ford's latest financial report, but there are many ways to sell fewer units and make greater profits. Some of the most common are cost reduction and restructuring. Possibly Ford had been implementing cost reduction programs and Q1 benefitted from those. Or Ford took a restructuring hit or one-time write-off in the previous quarter that is being compared.

 

[dgorsett]

Not really...it'll be a money maker with more sales that the full size Bronco (my prediction). Bronco Sport money helped the business case for the real Bronco. Plus back in the day, there was the Bronco II.

...triggered...the Bronco Sport is nothing, nothing like a Bronco II

 

[dgorsett]

Bronco II was a turd bucket.

You might be in the wrong place...the new Bronco is essentially an up dated Bronco II

 

[Razorbak86]

Cramer backs Ford, undrafted in the CNBC Stock Draft, to outperform recovery favorites

PUBLISHED THU, APR 29 20218:21 PM EDT
https://www.cnbc.com/2021/04/29/jim-cramer-backs-ford-to-outperform-recovery-favorites.html

KEY POINTS

• CNBC’s Jim Cramer made a full-throated endorsement of Ford, expecting the stock to make a big comeback within the next 10 months.
• As athletes and celebrities in CNBC’s annual Stock Draft picked recovery favorites earlier Tuesday, Cramer, who is not a participant, said he backs the traditional automaker to make significant gains.
• “When the expectations were highest – both yesterday and then 10 years ago – Ford got pulverized. Now they’re incredibly low, and that makes it easy for management to surprise to the upside,” the “Mad Money” host said.

CNBC’s Jim Cramer on Thursday endorsed Ford Motor as having the best odds of staging the biggest rally now through early February.

As athletes and celebrities in CNBC’s annual Stock Draft picked recovery favorites earlier Tuesday, Cramer, who is not a participant, said he backs the traditional automaker to make significant gains.

“When the expectations were highest – both yesterday and then 10 years ago – Ford got pulverized. Now they’re incredibly low, and that makes it easy for management to surprise to the upside,” Cramer said.

Ford CEO Jim Farley told Cramer Wednesday that he expects the chip shortage impact will hit a trough in the second quarter and that production will rebound in the second half of the fiscal year.

“If Farley’s right that the semiconductor shortage will ease up in the second half of the year, then Ford should win the (Stock Draft) contest hands down and I wouldn’t be surprised if the company can actually earn $5 a share … next year or the year after,” Cramer said.

Ford shares tanked 9% on Thursday, one day after the company posted a solid earnings report from the first quarter. The stock closed at $11.26, down 68% from its best closing price of $35 more than two decades ago. The stock last closed above $18 per share in 2011.

The 2021 CNBC Stock Draft is scheduled to end Feb. 11, 2022.

Disclosure: Cramer’s charitable trust owns shares of Ford.

 

[RPF]

Yeah... Ford deciding to pull the carpet out from under the UAW to take production from Ohio to Mexico seems like a great American company.

Lets call this what it is...

• Ford was never going to build BS at OHAP.
• OHAP builds HD body on frame trucks (E-Series, F-Series SD cab-chassis and F-Series MD).
• Ford is WAY short on body on frame full size production capacity compared especially to GM. For instance, GM has a separate plant for full-size HD trucks and one for full-size utilities. Ford shares Full size utility production with full-size HD pickup production and got away with this for a little while because Expy/Nav was not updated and they pushed some chassis cabs to OHAP. Expy/Nav has been updated and still compares favorably to the brand new GM full-size utilities, even before the MCE that is coming soon.
• The F-Series SD and Expy/Nav are in such demand right now they can't build enough to satisfy demand, and that was before the chip fiasco.
• Ford had promised to build mid-size unibody BEV utilities at OHAP before the 'Rona and chip fiasco.
• OHAP is not set up for unibody and would require a massive retooling.
• Ford had unibody capacity in Mexico that was underutilized.
• Ford moved the BEV utilities to Mexico and is investing in OHAP to increase production of F-Series (which they again are way short on capacity for). This will allow for increased full size utility production as well.
• F-Series provides much higher margins compared to midsize BEV utilities.
• So what is better for the OHAP workforce and their profit sharing checks? Making more F-Series trucks or some midsize BEV utilities? Especially since they can ramp up F-Series production there much faster than they could start building unibody midsize BEV utilities.

 

[DryYourTears]

Lets call this what it is...

• Ford was never going to build BS at OHAP.
• OHAP builds HD body on frame trucks (E-Series, F-Series SD cab-chassis and F-Series MD).
• Ford is WAY short on body on frame full size production capacity compared especially to GM. For instance, GM has a separate plant for full-size HD trucks and one for full-size utilities. Ford shares Full size utility production with full-size HD pickup production and got away with this for a little while because Expy/Nav was not updated and they pushed some chassis cabs to OHAP. Expy/Nav has been updated and still compares favorably to the brand new GM full-size utilities, even before the MCE that is coming soon.
• The F-Series SD and Expy/Nav are in such demand right now they can't build enough to satisfy demand, and that was before the chip fiasco.
• Ford had promised to build mid-size unibody BEV utilities at OHAP before the 'Rona and chip fiasco.
• OHAP is not set up for unibody and would require a massive retooling.
• Ford had unibody capacity in Mexico that was underutilized.
• Ford moved the BEV utilities to Mexico and is investing in OHAP to increase production of F-Series (which they again are way short on capacity for). This will allow for increased full size utility production as well.
• F-Series provides much higher margins compared to midsize BEV utilities.
• So what is better for the OHAP workforce and their profit sharing checks? Making more F-Series trucks or some midsize BEV utilities? Especially since they can ramp up F-Series production there much faster than they could start building unibody midsize BEV utilities.

I think it's also worth mentioning the Bronco Sport is based on the Escape platform, which they've been building in Mexico for years. Logistically it would make no sense to build them in different locations.

 

[Tonka Bronka]

You might be in the wrong place...the new Bronco is essentially an up dated Bronco II

You really think that?

 

[Mickey21]

the factories are shut down or severely curtailed and Ford doesn't get their chips regardless of whether they ordered 10K, 20K or 100K.

The factories are not shut down, have head room for guaranteed allocations, and you are ignoring the fact that it is known that Ford and GM reduced their orders. You are ignoring as if they didnt. Your hypothetical is already off base. Do I necessarily blame them, not really, but I am not ignoring it is a thing. When you reduce your orders that isnt a shortage they are experiencing, that is a shortage they created.

 

[dgorsett]

You really think that?

Oh yes. New Bronco: Slightly larger, Ranger based (like the BII), updated engine and trans tech, similar transfer case, better minimum ground clearance (but only due to tire size), worse dynamic ground clearance (due to modern safety requirements: low CG and isolated fuel tank and iIFS), worse articulation (TTB was amazing), smaller fuel tank, and rear seat doesn't fold flat!.

My Bronco II's were the best off road vehicles I've owned (and I've owned many, including my current LJ Rubicon), not bad on road and got 20 mpg.

A local Moab guy working the event had 3 Broncos, an Early, a 90's Full Size, and a Bronco II. He used the BII as his Moab trail machine because it is the most capable.

 

[Tonka Bronka]

Oh yes. New Bronco: Slightly larger, Ranger based (like the BII), updated engine and trans tech, similar transfer case, better minimum ground clearance (but only due to tire size), worse dynamic ground clearance (due to modern safety requirements: low CG and isolated fuel tank and iIFS), worse articulation (TTB was amazing), smaller fuel tank, and rear seat doesn't fold flat!.

My Bronco II's were the best off road vehicles I've owned (and I've owned many, including my current LJ Rubicon), not bad on road and got 20 mpg.

A local Moab guy working the event had 3 Broncos, an Early, a 90's Full Size, and a Bronco II. He used the BII as his Moab trail machine because it is the most capable.

I’ve had them too, had to spend a lot of money to make them good.

 

[dgorsett]

I’ve had them too, had to spend a lot of money to make them good.

IDK, mine were essentially stock with slightly larger tires, whopping P235/75 x 15's!!

 

[timhood]

The factories are not shut down, have head room for guaranteed allocations, and you are ignoring the fact that it is known that Ford and GM reduced their orders. You are ignoring as if they didnt. Your hypothetical is already off base. Do I necessarily blame them, not really, but I am not ignoring it is a thing. When you reduce your orders that isnt a shortage they are experiencing, that is a shortage they created.

I'm not ignoring anything. I've yet to see anywhere that Ford reduced any orders of anything related to the Bronco.

 

[Mickey21]

I'm not ignoring anything. I've yet to see anywhere that Ford reduced any orders of anything related to the Bronco.

Who's talking about Bronco, this thread is about all production...

 

[Razorbak86]

Ford redesigning parts to use more accessible chips, weighing direct deals with chip foundries

BY REUTERS — 47 MINUTES AGO

By Ben Klayman

DETROIT (Reuters) -Ford Motor Co (F), in response to the global semiconductor shortage, is redesigning automotive components to use more accessible chips, the No. 2 U.S. automaker's chief executive said on Thursday.

Jim Farley, speaking at Ford's online annual shareholder meeting, also said the company is weighing other strategies for the future, including building a buffer supply of chips and signing supply deals directly with the foundries that make the wafers used in semiconductors.

Automakers typically get their chips through their largest suppliers, not dealing directly with chip makers and the foundries that make the wafers used to assemble the semiconductors.

The chip shortage has caused automakers globally to curtail production. Last month, Ford said the issue would cost it $2.5 billion this year and halve its vehicle production in the second quarter, when the shortage will be at its worst. The shortage has forced Ford at times to idle production of its highly profitable F-150 pickup trucks.

Farley said on Thursday that about 60% of the chips used in Ford's vehicles are 55-nanometer or larger, what he called "mature nodes". He said supply of those chips was constrained.

Longer-term changes about how Ford approaches chips are being considered, he said.

"Not only are we redesigning a lot of our components to work with chips that are more accessible ... but we think we need to look at buffer stocks, actual direct contracts with some of the foundries," Farley said. "We think that's going to be a really critical approach to our supply chain as we get more electronic components."

Ford Executive Chairman Bill Ford also said on Thursday the automaker will look to reinstate the company's dividend "as soon as possible."

Ford's dividend was suspended in March 2020 after the COVID-19 coronavirus pandemic hit in a move to conserve cash. That saved the company $2.4 billion at an annual rate.

Ford shares were up 3% in morning trading.

(Reporting by Ben Klayman in Detroit;Editing by Elaine Hardcastle)

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