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Ford's Investment Rating Downgraded

Driversedge18

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The Blue Oval is undergoing restructure & consolidation in order to be a viable company in the future. The downgrade is not good news, but remember they took out alot of loans to stay afloat , where GM got help from Obama "BAILOUT" . Chrysler is now Fiat. They have a large amount of debt to still pay off.No tax $$$$ helped them , like GM.Where the public got the bill in the end. On the case of the sedans. ? Time will tell if it was the right move. :flag:
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Jetnoise

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Ford may very well be way ahead on what's to come. Preparing for the fueter isn't always easy or profitable in the short term.
Ford managed no tarp money....that spoke and speaks
I'd buy there stock
 

Hi-PO Stang

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I have no complaint with Fords plan. The only cars I buy are Mustangs. I don't buy trucks, but I buy SUVs. I guess I must be the customer Ford is after.
 

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Skyrm_da

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Completely idiotic to think that a slight change in steel prices will have a significant impact on the profitability of an automaker. Ford's biggest seller doesn't even have a steel body anymore. And the total amount of steel in a car as a raw material can't cost more than a few hundred dollars. The costs in manufactured products are mostly in manufacturing, not in raw materials.

I work in the Super Duty stamping plant. The tariffs on aluminum and price increase cost us 600 million so far and itā€™s projected to be 850-900 million by year end...Iā€™d say thatā€™s a significant change.
 

nrc

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I went to the extreme measure of reading the link to see if all this talk of tariffs is supported by the article. According to the article Ford's real problems are in other markets - China, South America, and Europe. While there's concern about "softening margins in North America driven by higher costs," Ford has a "highly competitive and profitable position in North America."

So it seems as though the grumbling on the home front is really because Ford wants to keep it's NA margins fat to help fund its loss leader operations in emerging markets. But if Ford can't be competitive building cars in China for the Chinese then spurning US passenger car buyers and taxing F150 customers isn't going to save them in the long run.

I think that Ford threw the baby out with the bathwater when they divested from Mazda during their last big rescue operation. Mazda is now years ahead of them in fuel efficient gas engines, lightweight platforms, and flexible manufacturing. If Ford still had its relationship with Mazda then small cars and manufacturing for emerging markets would not be such a challenge for them.
 

Hack

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I work in the Super Duty stamping plant. The tariffs on aluminum and price increase cost us 600 million so far and itā€™s projected to be 850-900 million by year end...Iā€™d say thatā€™s a significant change.
Ford must be spending a lot of money for one or two month's worth of tariffs to cost so much. Big business! That is great that Ford is building so many vehicles.

I went to the extreme measure of reading the link to see if all this talk of tariffs is supported by the article. According to the article Ford's real problems are in other markets - China, South America, and Europe. While there's concern about "softening margins in North America driven by higher costs," Ford has a "highly competitive and profitable position in North America."

So it seems as though the grumbling on the home front is really because Ford wants to keep it's NA margins fat to help fund its loss leader operations in emerging markets. But if Ford can't be competitive building cars in China for the Chinese then spurning US passenger car buyers and taxing F150 customers isn't going to save them in the long run.

I think that Ford threw the baby out with the bathwater when they divested from Mazda during their last big rescue operation. Mazda is now years ahead of them in fuel efficient gas engines, lightweight platforms, and flexible manufacturing. If Ford still had its relationship with Mazda then small cars and manufacturing for emerging markets would not be such a challenge for them.
Sorry to get political, but in my opinion the biggest reason for the alarmism is Trump. All the entrenched, corrupt government and big media machinery are desperate not to lose their power. So everything Trump does is horrible. The great economic growth in the US is not really happening.

You can't really tax a company. Whatever costs a company incurs translate into higher prices for the end products (if necessary). The automakers' costs have gone down significantly very recently with the new changes in taxes. They are probably still looking at a net gain financially even with the temporary tariffs in place.

China needs the US a lot more than we need them.

I was never talking about steel alone. I specifically mentioned steel and aluminum, and steel makes up just under half of the total material portion of the average car manufacturing cost. If you actually read my previous posts, you would see where I am talking about more than just raw steel in manufacturing. You deliberately skipped past my point that tariffs donā€™t just hurt due to steel prices. Export tariffs, component import tariffs, etc all add up. As shown in articles posted here earlier, and in this article, cost increase estimates are averaging up to $300-400 per car. That is significant and hurts the industry. https://www.google.com/amp/s/www.ws...iffs-could-raise-car-prices-by-300-1520867757

I notice you skip right past the fact that you made up a big lie about automotive manufacturers selling the car for 2X manufacturing cost. Just admit that you arenā€™t using facts and move along.
So - if you read what I said again, it was:
I'm more used to a 2x or 3x expected profit margin over the actual cost to produce a product. It's hard for me to imagine companies being financially successful with such a small amount of profit. The only way I could imagine it is they are calculating COGS by including a bunch of overhead that really has nothing to do with the cost to produce a car.
So I didn't state it as a fact, I just said that I don't believe the "fact" that you posted. I could believe that costs go up $300-400 per car, but I don't think that will kill the auto industry.

I still believe that the profit numbers you are posting include all expenses for the company, and not just the expense of building a car. If a company only made a few hundred dollars on a car, or even a few thousand, how would they pay for management, engineering, marketing, etc, etc? Impossible. Like I said, they are political statements because a company has to make good money on their sales in order to pay for overhead, and the company doesn't want to admit that they make good money on every car they sell.

I guess we will know for sure in a year or two when either all American car companies are defunct (I will admit you and the big anti-Trump media are right), or American car companies that were financially sound before these changes are still doing fine.
 
 




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