How can you stay in business and lose money?
I just don't understand how a company can lose money (12.7 billion) and even be in business. How can you meet payrolls, pay suppliers, taxes, insurance, etc. I just don't understand.
Just part of the article:
DEARBORN, Mich.(AP) Ford Motor Co. lost a staggering $12.7 billion in 2006, an average of $1,925 for every car and truck it sold and the worst loss in the company's 103-year-history.
The company that invented the assembly line and whose name was a byword for the auto industry warned it will bleed cash for two more years before it has a shot at making money.
Ford's loss, reported Thursday, came amid slumping demand for sport utility vehicles and other gas guzzlers and huge restructuring costs tied in part to the planned closure of 16 plants.
Last year's loss surpassed Ford's old record of $7.39 billion set in 1992.
A fourth-quarter loss of $5.8 billion helped drive up the red ink, which for the year amounted to $6.79 per share versus a profit of $1.44 billion, or 77 cents a share, in 2005.
Just part of the article:
DEARBORN, Mich.(AP) Ford Motor Co. lost a staggering $12.7 billion in 2006, an average of $1,925 for every car and truck it sold and the worst loss in the company's 103-year-history.
The company that invented the assembly line and whose name was a byword for the auto industry warned it will bleed cash for two more years before it has a shot at making money.
Ford's loss, reported Thursday, came amid slumping demand for sport utility vehicles and other gas guzzlers and huge restructuring costs tied in part to the planned closure of 16 plants.
Last year's loss surpassed Ford's old record of $7.39 billion set in 1992.
A fourth-quarter loss of $5.8 billion helped drive up the red ink, which for the year amounted to $6.79 per share versus a profit of $1.44 billion, or 77 cents a share, in 2005.
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Ford is really good at building cars, they are not very good at figuring out what American wants to drive. 0 -
quote:Originally posted by Blckhrn
Very simple, they lose money on every deal but make it up with volume.
Now that is funny! I see this business plan all the time...funny how it works just like they plan.0 -
"Mercedes workers make tons more that Ford union employees, and the company is strong as a rock. Isn't it? How about Honda motors? Aren't their workers unionized, and what about Lexus?"
I believe that the Mercedes plant in Alabama that builds SUVs is non union. Likewise for the big BMW plant on I85 in S. Carolina, and the Nissan plant in Tennessee.
As I understand it they built in southern states, in part, to avoid unions.0 -
Gee, all along I thought that FoMoCo was in DEARBORN.
When did they move to Detroit ??
Good thoughts, Dave, except for the Focus - Car & Driver Car of the Year for one year, Top Ten C&D for about 4 or 5 years.
By the way, Toyota, Nissan, etc. are domestic labels, now.0 -
Rolls Royce is looking at SC for operations. 0 -
Expect a BIG bail out by the government. They did it for the airline industry. It's coming for the auto makers. Your tax dollars at work. If you can't compete, get out of the business. 0 -
Just a side note here: did you know Toyota uses more American parts in their cars than Ford does? 0 -
PEON is likely right - is anyone here (besides me) old enough to remember the government bailout of Chrysler Corp. in the '70s ??
Lee Iocacca orchestrated that.
Altogether a brilliant guy who should have become President.0 -
I remember it, but don't forget that they had the tank division back then and were producing the Abrams. Different ballgame when you are not a prime defense contractor.
He took that job for a $1 as against some percent of the profit if the stories that came out were correct - who knows - they forgot to call me. [;)] It turned out well either way since he was well paid, and deserved it, when the company turned around and made a profit.0 -
On the news last night, they interviewed an ex-Ford assembly line worker. They offered her a severance package of $100K. She took the money and ran because she could see the layoffs coming. She was making $30/hr. Assembly line workers making $30/hr and $100K severance packages for assembly line workers? No wonder Ford is in the cr@pper. 0 -
I went to high school 3 miles from the big GM Doraville assembly plant in north Atlanta. This huge plant must have covered 10 or 15 acres, it employed thousands.
After our senior year, one of my buddies got a job there.
I talked to him after his second day of work. He was a parts picker, he went around with a grocery cart pulling parts off of the shelves. He was getting over $6 an hour. That same summer I worked as a construction laborer for $1.75 an hour, so my buddy was getting astronomically high Yankee union pay.
Ricky was laughing about how easy the work was. He pushed that cart slowly, and there were lots of breaks.
In a week, he got in trouble with the union rep. He said that Ricky had to slow down, he was working too hard, and making the other guys look bad.
I knew that something was bad wrong with those union jobs at the big plant.
Twenty years later, I knew a guy who did computer work at that same plant. He said that at the door there were two 55 gallon drums. These were for the employees to toss their vodka and beer bottles into, when they had been drinking at lunch. I called bs on this one, the guy insisted it was true. I asked him about it a half dozen times over a couple years, and he always insisted that it was true, that GM employees routinely drank at lunch, and the union protected them.
During that same time I rented a brand new Cutlass for a 1,000 mile drive to Virginia. The Doraville plant made the Cutlass. What a crappy car! It had 3,000 miles on it. It had rattles and squeaks. When you pulled up to a stop light, the motor conked out. I must say, it seemed like a car that had been built by a drunk guy.
Last year, GM Doraville assembly plant closed down.0 -
Ding, ding, ding!!! We have a winner and EMM is it. Keep in mind people that I'm not defending Toyota....I'm refering to that "giant sucking sound".
quote:Originally posted by ElMuertoMonkey
Just a side note here: did you know Toyota uses more American parts in their cars than Ford does?0 -
Amen, EMM. Even my Chevy Prizm engine has "Toyota Corolla" stamped on it... 0 -
Fords sales are good and strong. They create lots of revenue. However, their costs are just astronomical because they have been pushed around by the unions for too long. Now many people (union workers) will be fired. Hopefully Ford can get their health costs under control and return to profitability. There is a good reason no one wants unions anymore...they kill jobs. Live Better, Work NON Union 0 -
quote:Originally posted by allen griggs
I went to high school 3 miles from the big GM Doraville assembly plant in north Atlanta. This huge plant must have covered 10 or 15 acres, it employed thousands.
After our senior year, one of my buddies got a job there.
I talked to him after his second day of work. He was a parts picker, he went around with a grocery cart pulling parts off of the shelves. He was getting over $6 an hour. That same summer I worked as a construction laborer for $1.75 an hour, so my buddy was getting astronomically high Yankee union pay.
Ricky was laughing about how easy the work was. He pushed that cart slowly, and there were lots of breaks.
In a week, he got in trouble with the union rep. He said that Ricky had to slow down, he was working too hard, and making the other guys look bad.
I knew that something was bad wrong with those union jobs at the big plant.
Twenty years later, I knew a guy who did computer work at that same plant. He said that at the door there were two 55 gallon drums. These were for the employees to toss their vodka and beer bottles into, when they had been drinking at lunch. I called bs on this one, the guy insisted it was true. I asked him about it a half dozen times over a couple years, and he always insisted that it was true, that GM employees routinely drank at lunch, and the union protected them.
During that same time I rented a brand new Cutlass for a 1,000 mile drive to Virginia. The Doraville plant made the Cutlass. What a crappy car! It had 3,000 miles on it. It had rattles and squeaks. When you pulled up to a stop light, the motor conked out. I must say, it seemed like a car that had been built by a drunk guy.
Last year, GM Doraville assembly plant closed down.
I remember my Dad coming home from GM in 1971 and told us he was making over $10 bucks an hour. He was kinda disturbed about that cause he remembered driving a coal truck in Ky for .25 cemts an hour. I use to just walk in the Plant he worked at in Indiana and see workers ,playing cards, drinking, asleep, you name it. Well Dad got his 32 yrs in Delco-Remy and retired early because of an illness. Today all 20 plants in the same town are closed, most flattened. In fact Guide Lamp Division just closed their doors a couple weeks back. People are worried about severance pay. High wages drive high priced cars. Mom still draws a retirement check for Dads 32 yrs of service but it may soon go away. She is not worried if it does0 -
quote:Originally posted by RunForest
Fords sales are good and strong. They create lots of revenue. However, their costs are just astronomical because they have been pushed around by the unions for too long. Now many people (union workers) will be fired. Hopefully Ford can get their health costs under control and return to profitability. There is a good reason no one wants unions anymore...they kill jobs. Live Better, Work NON Union
It's not the unions fault. The company did NOT have to give-in to their demands. It's nothing but total mismanagement. For years and years the company "gave" the union whatever they demanded. Why? Because the company "knew" it could "pass on" these additional costs to their customers in higher prices. Well, what happens then when your product quits selling? I have absolutely no sorrow or pity for the employees (union members) or the management of these companies----they burst their on bubble.0 -
Having just stepped in to a bad situation, Mullally is going to get a little bit of slack at the beginning of his term. He has made it clear to us that since the year is going to end on a bad note to dump all the bad news into the current period. He's absorbing as much bad news as possible this time around because the people are expecting it and he get's a one time pass. 0 -
quote:Originally posted by Blckhrn
Very simple, they lose money on every deal but make it up with volume.
EXACTLY![^]
JM0 -
quote:Originally posted by ElMuertoMonkey
Just a side note here: did you know Toyota uses more American parts in their cars than Ford does?
Just curious, what is your source for this information? Ford cars may be different - The window sticker on my new Ford F-150 pickup shows the sources for the parts on the truck, and it's 90% made in USA.0 -
How to stay in business and lose money- easy. Ask the government. They haven't been in the black in ages. 0
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