At Ford, Sounding Like a Broken Record — About a Broken Record
Here’s the reported news:
Ford: Biggest loss ever
Annual shortfall roars past company record, as quarter loss comes in wider than expected; larger operating losses ahead.Ford Motor Co. reported the largest annual loss in company history Thursday. The embattled automaker also posted a fourth-quarter loss that was worse than analysts’ expectations and warned of worse showings ahead.
Weak sales of its key pickup trucks in the quarter and $9.9 billion in after-tax charges due to employee buyouts and plant closing plans resulted in $12.7 billion loss for 2006.
….. The company has seen a big drop in consumer demand for its key products, such as the F-series pickups. While still the nation’s best-selling vehicle, the pickup saw sales plunge by more than 100,000 in 2006 in the face of record fuel prices and a slump in the housing market, which cut demand from contractors.
….. The shift in buyers’ preference left Ford with numerous truck factories that were idle much of the quarter, even as unionized hourly workers continued to be paid near full salary. It responded to the downturn by offering all 75,000 of its U.S. factory workers buyouts or enhanced retirement packages to leave the company, which more than half of them agreed to do.
….. And while the company said the lack of large special charges should trim its net loss this year, it warned that losses excluding special items would be worse this year than in 2006. It did not give any specific range for that loss in its financial statement.
Ford has acquired a nasty “worse than expected” habit in the past six months or so.
One gets the impression that execs are shaking their heads and rattling their brains trying to figure out why this is happening. I think they know that this is why (659,000 boycotters, and growing), and simply won’t acknowledge it (Note: I am not a fan of the boycott involved; I am pointing out the real business impact it is obviously having. The fact that the press is ignoring its impact doesn’t mean that it isn’t happening). Until they do, and until they do something about it, expect more disappointments out of Dearborn. This is especially true because with the company’s survival clearly at stake, Ford appears hell-bent, if you excuse the expression, on making that situation worse — even if the company fails as a result.
The company’s worst quarter ever and yet they awarded more bonuses. Even more oddly, the stock is actually up recently on the assumption the new CEO will wave a magic wand and fix things. Go figure.
Comment by LargeBill — January 26, 2007 @ 10:55 am
#1, I think the market believes the worst is over. As long as Ford ignores AFA, I believe they are incorrect.
And bear with me while I do a pre-emptive and revised carryforward of a comment from early December:
++++++++++++++++++++++++++++
I thought that that Wildmon/AFA boycott would not have a serious impact several months ago until I saw the numbers. I vastly underestimated their influence, as Ford still does. But the facts are:
- Their home page (afa.net) claims 3,460,000 supporters.
- The boycottford.com site lists the AFA and 32 other organizations involved in the boycott, including many I recognize as having quite a few members. They claim that 44 organizations have petitioned Ford to change their stance.
- The AFA home page says that their boycott pledge petition has been signed by over 659,000 (no, I am not one :–>).
Based on what I see, I would suggest that the total sphere of influence of AFA members, boycott signers, the organizations listed is in the neighborhood of 15-20 million people through word-of-mouth and other communications who would feel strongly enough to have the current situation between Ford and the AFA affect their car-buying decision. If that is 15-20 million adults (and I do not see why it would not be), you’re pushing 10% of the adult population who will not buy Ford in the current circumstances.
I would also suggest that the people inclined not to buy Fords as a result of this will tend to be families with kids, i.e., high-margin minivan, crossover vans, and SUV buyers. So their influence and potential impact on the bottom line is even beyond their raw numbers.
Comment by TBlumer — January 26, 2007 @ 1:13 pm
AFA’s effect on Ford’s bottom line is real and persistent. But so is the UAW’s. The unions have bargained themselves out of jobs, and it’s high time the rank and file union members understood that stark fact and did something about it. Either Ford fixes their public image with the boycotters and adjusts their wages/benefits package to 21st century conditions in the world market or down they go.
Comment by Excelsior — January 27, 2007 @ 1:17 am