Ask The Best And Brightest: Do Ford's 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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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.
Given the facts as they are now, it appears to be a fiscally sound plan.