You’ll be kicking yourself when you stay and Ford goes under and you didn’t take that money and get a job at Toyota.

Chrysler, Ford, GM, Nissan,… even Toyota had to do this. The reduction of labor and plant capacity is standard fare whenever a manufacturer is in financial trouble.

PS: I like the Focus…the Euro one.

http://media.ford.com/newsroom/release_display_foriframe.cfm?release=27379

In the past, it had two big profit centers-the F Series trucks and the Explorer. F-Series sales were down 13.2% and Explorer sales were down 23.1% for the year.

Overall sales were down 11.9%. They do have some hits (Fusion and Edge and the Lincoln versions of such (and the Mercury Milan)), although the new Taurus is an even bigger dud than the Five Hundred it replaced.

Volvo and Jaguar are also in trouble, especially Jaguar. Of course, those don’t really have anything to do with the UAW, and they are selling Jaguar anyways.

I don’t believe one can shrink to profitability. As far as I know, there has never been a case where a formerly large company became a profitable, successful small company, in any industry, without at least a bankruptcy reorganization first. It’s simply never happened, because too many fixed costs of the company are structured around the company being big and it’s impossible to shrink those costs quick enough to avoid bankruptcy. If anybody can think of an example, I’d love to hear it.

That said—-Ford’s progress needs to be accelerated….Mulally has been pretty consistent on this one. The next 24 months will tell us if he is successful against this goal.

Yes, any improvement from last year’s disaster will appear huge. However when all your operating profits come from your finance arm and you can not achieve positive operating cash flow I would say they are not doing very well.

The earnings call was actually quite good. A one-time charge related to Volvo was the primary reason for the loss ($2.4 bill). Everything else looked fine – revenues were higher, costs were lower, capacity utilization for Q1 is now between 85-90% (up from like 60% just two years ago), cash was stable for the year – $34 billion in cash and an $11 billion credit line. They are loaded. Total restructuring is estimated to cost $12-$14 billion. Even NA saw its automotive operations losses drop from almost $3 billion to just above $1.5 billion. That’s operations only. That’s massive.

I know that everyone will get obsessed with the $2.7 billion number, but, again, $2.4 of that was charges – not operational losses. Profit from operations pre-tax was like $125 million for the year. Total loss exluding special items was about $250 million compared with like $5 billion last year. I’d say Ford is doing very well.

The current contract calls for all assembly line workers to be members of the UAW, so Ford cannot replace departing union workers with non-union workers.

What it can do is replace departing UAW workers with less-expensive UAW workers, because the newest contract permits the hiring of new workers at a lower pay rate.

I wonder how this will affect negotiations with the CAW. If Ford is likely to do the same thing in Canada, then it’d be unlikely that the CAW will agree to any pay cut for new hires. I can see the CAW striking for quite some time.