Ford's Leadership and Financial Situation Effect On Bronco

Stampede.Offroad

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More internal rumblings with Ford as major leadership changes.

Ford Names New Chief Operating Officer in Leadership Shake-Up
Joe Hinrichs, longtime manufacturing executive and Ford’s president of automotive, to retire


This following a very poor launch of one of Ford's most iconic nameplates, the Explorer -- as well as some of the financial ramifications of a seemingly poor performance over the last year.

Ford shares fall 8% after disappointing 2020 profit outlook

Ford profit plunges and CEO blames flubbed launch of new Explorer SUV, made in Chicago

Will Ford put that much more effort into a spectacular Bronco launch, or cut back on what was planned for a more conservative and deliverable offering?
 

Jalisurr

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Reading on the blue oval forums, the Bronco has been fully funded for a while now and this shouldn’t have any effect. Their sunk costs are too high anyways.
For whatever was planned for launch, yeah, I agree. This may effect the possibility of future specialty or high performance versions of the Bronco though.
 
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Stampede.Offroad

Stampede.Offroad

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Long term budgets change. They might have planned for X, but that included speculative sales figures to fund some of it. A year or three later X might have been reduced to Y -- or the people supporting those plans might not be there anymore.
 

Carolina Jim

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Bronco has been fully funded for a while now
Don't doubt that at all. And I certainly hope the impact is ZERO. But having walked a mile in those shoes myself, I promise you many things shift mid-stream once management starts 'dialing for dollars'.
 

aplm7

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Every car company is going through major changes (in the big picture). Also in the near term, every car company right now is having tough sales declines. It is already a recession whether or not the gov. acknowledges that.

If Ford sticks to it's rugged future, Bronco should be just fine.

Hopefully these senior changes are a good thing. Would like to hear how the new guy views Bronco. A sign of big, good investment would be if Ford really pushes the Bronco, I'm not talking about just the development costs but signing up major social media influencers in various communities like overlanding, rock crawling and desert racing, mudding etc. to be evangelists... I'm really surprised they didn't come to KOH yet but having a big presence at stuff like that would make us all feel better.
 
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Carolina Jim

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every car company right now is having tough sales declines
US auto sales units are constant from 2014 to 2019, at ~17M units. BUT - the overall US economy is much more robust than 5 years ago: workforce participation, wages, real estate, equities, etc. Could be that price elasticity has reached its limit. $37,000+ avg vehicle cost in 2019
 

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The $47 million profit includes a $2.2 billion one-time pension cost. So, they really made a couple billion profit and used most of it to shore up their pension. I don’t see a negative in that.
 

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US auto sales units are constant from 2014 to 2019, at ~17M units. BUT - the overall US economy is much more robust than 5 years ago: workforce participation, wages, real estate, equities, etc. Could be that price elasticity has reached its limit. $37,000+ avg vehicle cost in 2019
I think it’s more just that vehicles last way way WAY longer. Any vehicle that doesn’t have a catastrophic failure problem(*COUGH* FOCUS *cough*) can hit 200k with minimal repairs
 

Carolina Jim

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vehicles last way way WAY longer
Very good point. But whatever the root cause, auto industry needs something to change. Perhaps they need to go to war on the myriad regulatory issues driving price points.
 

aplm7

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US auto sales units are constant from 2014 to 2019, at ~17M units. BUT - the overall US economy is much more robust than 5 years ago: workforce participation, wages, real estate, equities, etc. Could be that price elasticity has reached its limit. $37,000+ avg vehicle cost in 2019
I agree in the average vehicle price being too high for average people. But I'd argue that it's becoming harder for us to come up with the necessary income as most of those metrics as a measure of economic health are misleading.

Unemployment rate has been known to be a manipulated statistic for politicians. Real participation has been slipping since 1990.. "Now only 62.7% of people in that group have jobs or are actively trying to find one. (That’s about the same as in the late 1970s, before women joined the workforce en masse.) "

Wages for most of the population are stagnant or hours are being cut, and benefits cut. So it's misleading to base the economy on the average hourly wage people get for 1 hour of work. Cost of living is increasing even though government releases inflation stats in the low single digits, there's many other organizations like shadow statistics which peg it closer to 25%. You have to include cost of housing in inflation otherwise it's useless.

The price of homes, or the height of the stock market, is not a good indicator of economic health unless you are talking about the top 1% of elites who own bigger proportions of those assets. The price increases of homes means most young folks, millennials who should already be participating in real estate, can't yet. Same with the stock market. So in this way, those increases are actually BAD economics for a growing segment of the young adult population. We are forced to pay much higher rents for longer in order to live within distance of workplaces, yet we still commute over 2-3 hours per day to do so.

Edit: also adding this stat for declining auto sales across the industry from 2018, 2019.

1581111340401.png
 
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aplm7

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https://www.motortrend.com/news/ford-mustang-mach-e-bronco-launch/

Interview just dropped.

Thai-Tang, the new guy in charge of releases: "Explorer is not a reflection of Ford's performance, he says. But lessons learned will be applied to the upcoming launches and much effort will go into "de-risking."

No more multiple launches or concurrent assembly, for example. The Mach-E will be built at the Cuautitlan plant in Mexico that is not currently building anything, having ceased Fiesta production there. Champions within the company have been assigned to work with key suppliers. Turnaround time will include more time to train plant employees, and the key launches are also staggered and more validation is being done, we're told."
 

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The whole auto industry is slowly going through revamping, and product irreverence. It's all about adjusting towards: alternative fuels, ride-sharing, car-rental sharing, public transport etc. People in urban markets don't see a car as relevant anymore.
 

aplm7

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The whole auto industry is slowly going through revamping, and product irreverence. It's all about adjusting towards: alternative fuels, ride-sharing, car-rental sharing, public transport etc. People in urban markets don't see a car as relevant anymore.
That’s true most people I know who live in or near San Francisco don’t even own a car and haven't for 10 years or ever
 

Carolina Jim

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People in urban markets don't see a car as relevant anymore.
USA has these areas called urban, suburban, rural. Much of the rest of the world lacks the 'suburban' category; when you fly into many large european cities, you see agricultural ground adjacent to high-rise housing. Hence many walk, bus or scooter to work.

Drive across Chicago, Boston, Atlanta, or NYC (where many don't own a vehicle) and you'll quickly be convinced of the current 'relevance' of cars.
 

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