Ask The Best And Brightest: Do Ford's Production Plans Make Sense?

by Edward Niedermeyer

December 2nd, 2008 6:44 PM

ask the best and brightest do fords production plans make sense

Between the release of its congressional bailout term paper and November sales results, it’s been a big news day for Ford. And the hits keep happening. Automotive News [sub] reports that Ford will cut its 2009 Q1 production by 37.9 percent to 430k units, No surprise there; FoMoCo’s monthly sales are sitting at under 125k– and dropping. Dow Jones (via CNN Money) says that Ford’s 2009 Q1 production plan consists of 305k pickup trucks and 125k cars, compared to this quarter’s 255k pickups and 175k cars. A quick look at Ford’s November sales shows that cars are down 31.5 percent while total truck sales are down 29 percent. So what’s the deal? Is Ford signaling to congress that it plans on asking for $13b ($5b more than they asked for on 11/18) only to turn around and ramp-up truck production? Or is there some play here that I’m missing? I can’t make sense of it, so I’m asking: what’s the deal?

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Cpmanx on Dec 02, 2008
Yes, build more pickups when people want cars… I wonder why Dirt-troit is in trouble? Hmmm...have you looked at the sales figures for November? The only thing selling at Toyota is the Sequoia SUV. The only thing selling at Honda is the Pilot SUV. Relatively speaking the F-150 is doing well right now at Ford. Meanwhile Civic Hybrid and Prius numbers look terrible. It would be nice to think that in times of trouble people flock to green, rational cars. In reality, gas prices are low and people at the bottom end of the market are the ones who are cutting back most aggressively. Ford's strategy may not be PC, but it *is* responsive to what customers are actually asking for right now.

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Willman on Dec 03, 2008

What Droid800, guyincognito, and Dimwit said. Also, fuel around here is about 50%+ off the summer highs, so even though their cost-structure still sucks, they're making the most sure-fire of what they can while they can. The bigger % numbers they'll post relative to GM because of that fuel/profit arbitrage may be used as a tool later on. If I knew there were an impending disruption, I'd be banking transition elements like cash, product (& Milanese hookers) the way a squirrel stashes nuts. -That and Toby Keith gets free F-150s and the Holiday Season is rolling around.

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Geeber on Dec 03, 2008
cpmanx: In reality, gas prices are low and people at the bottom end of the market are the ones who are cutting back most aggressively. Ford’s strategy may not be PC, but it *is* responsive to what customers are actually asking for right now. It's not just in cars. We want our floors refinished. The contractor who came to give us an estimate told us that in this area, the very high end market for houses (and remodeling projects) is going ahead full steam. But anything below that is virtually dead. As for Ford - I wonder if the first quarter production cuts for cars reflect the switch to production of the 2010 Mustang, Fusion, Milan and MKZ.

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Ralph SS on Dec 03, 2008

Given the facts as they are now, it appears to be a fiscally sound plan.

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