Will Ford make it past this year?

[time]

My god, you people talk a lot of crap.

Retirement benefits, or superannuation as it's otherwise known, are part of the contract between employer and employee. That is, the employee effectively sacrifices part of their salary in return for an employer contrbution to a pension fund, as well as the resulting tax benefit. The employee's direct contribution allows them to regulate the amount according to their current circumstances.

In Australia, employer contributions are a legal requirement, an effort to ensure there's sufficient national savings to support retirees in the future so that the government doesn't have to.

The point is that these pension funds are supposed to be fully funded, i.e. the employer is supposed to pay the money as they go rather than defer the commitment. Again, this is legally mandated in Australia.

Unfortunately, some companies have traditionally raided employee pension funds to prop themselves up, but it's not really their money. I believe this is illegal in many countries.

So if it cost $1300 per car in the past, that shouldn't have any bearing on what the cost is in the future, unless the companies have been deferring their liabilities or raiding the pension funds ...

 

[ddrueding]

I think one of the reasons they are so screwed it that they weren't using fixed benefits. The cost of health care has gone up faster than they anticipaterd, so now they are toast. IMHO, offering anything more than a pension is asking for trouble.

 

[time]

Agreed.

 

[Clocker]

The power Unions have to get what they want. Give us the benefits we want or we'll put you out of business. I think the 2007 contract talks will be a reality check for the UAW.

 

[Bozo]

My god, you people talk a lot of crap.

Retirement benefits, or superannuation as it's otherwise known, are part of the contract between employer and employee. That is, the employee effectively sacrifices part of their salary in return for an employer contrbution to a pension fund, as well as the resulting tax benefit. The employee's direct contribution allows them to regulate the amount according to their current circumstances. ...

Uh, not quite. The unions I worked for and my present employer pay 100% of the pension. We do not sacrifice part of our salary.
This type of pension is rapidly changing though. New hires here are told not to expect a pension. It has only been in the last 5-6 years we have been offered a 401K retirement account. And do the math: $1300 per car. Build 2 million cars. Equals 2.6 Billion a year. Payout $40000 per year to each retiree equals 65000 employees. No car company in the world has 65000 retired employees. Even if you double the payout ($80000.00!!!), that is still 32500 retired employees. NO WAY The numbers don't add up.
One of the requirements to be a CEO is to be able to lie between your teeth and smile all the while you are sticking it to the working man. And then collect your multi-million dollar sallary.

Edit: If I were to retire now, my pension would be less than $12000 a year. That's before they deduct hospitalization...
Bozo :joker:

 

[Pradeep]

My god, you people talk a lot of crap.

Retirement benefits, or superannuation as it's otherwise known, are part of the contract between employer and employee. That is, the employee effectively sacrifices part of their salary in return for an employer contrbution to a pension fund, as well as the resulting tax benefit. The employee's direct contribution allows them to regulate the amount according to their current circumstances.

In Australia, employer contributions are a legal requirement, an effort to ensure there's sufficient national savings to support retirees in the future so that the government doesn't have to.

The point is that these pension funds are supposed to be fully funded, i.e. the employer is supposed to pay the money as they go rather than defer the commitment. Again, this is legally mandated in Australia.

Unfortunately, some companies have traditionally raided employee pension funds to prop themselves up, but it's not really their money. I believe this is illegal in many countries.

So if it cost $1300 per car in the past, that shouldn't have any bearing on what the cost is in the future, unless the companies have been deferring their liabilities or raiding the pension funds ...

There's a couple of things to keep in mind when comparing the US and Aus. There is no mandated super as such in the US, the closest is the "mandatory" Medicare/Social Security contribution (I believe the employer pays 7.5% and the employee pays the other 7.5%). Now in the USA you will often have 401k plans (where you don't pay tax on the contributions, it's taxed when you take the money out), or Roth IRAs (where it's taxed on the way in, and tax free when you take it out). And in the 401ks, often the employer will "match" an employees contributions, up to a certain percentage. In my case, I get 6.8% contributed, even if I don't put any in.

In terms of benefits obtained it retirement, it's very doubtful there will be any money left in the Social Security pot once I reach that age (35 years from now?).

Also, the cost of medical/dental insurance cannot be underestimated in the USA. You could easily spend over $1-2K per month in premiums if you were paying for a full family out of pocket, with no employer discounts.

The cost of health care insurance is totally out of control with yearly rate increases far in excess of inflation, if the retirees have their payments totally paid by the company, the company gets in over it's head pretty quickly.

 

[Clocker]

It is immoral how we are being raped harder and harder every year by doctors & drug companies.

Doctors have an excuse somewhat because they have to deal with malpractice insurance to protect themselves from idiotic lawsuits. So I guess we can thank the lawyers for that.

Health-care costs need to get in-control or we're screwed.

 

[CougTek]

I've just had news about Ford's latest (vain) attempt at percing the minivan market : the Flex. This thing looks like a Honda Element. Combine that to the new Taurus and several other misteps and I reiterate that Ford won't make it very far into 2008. Unlike GM, they are introducing worse and worse products with every new launch.

Hasta la vista, Henry.

 

[CougTek]

In fact, I think Ford's design and marketing departments should be merged and renamed : the thicker thinkers.

 

[Mercutio]

I like how my Element looks just fine.
Psions, on the other hand, are hideous.

 

[e_dawg]

The Element may well be even boxier than your beloved Volvos!

 

[Buck]

In my opinion, the Ford Flex looks better than the Honda Element. It has more of a sleek look with a slightly raked profile.

 

[Clocker]

Honda vehicles are, for the mostpart, girly.

Element's butt-ugliness is only rivaled by the Scion xB. The Ridgeline is nothing more than a V-6 minivan with a tiny pickup bed off the back. Civic has girly styling just like the Pontiac G6. Both are good vehicles though. Pilot is outclassed on features, design, and styling.

The Odyssey is a great minivan though.

Honda's quality is good but it's in an industry where good quality is now the price of entry.

 

[Mercutio]

Yes but Honda has, to the best of my knowledge, not devastated the economies of dozens of small midwestern towns that used to have some kind of auto plant. I'll give them some credit for that, Mr. GM Man.

The Element really has been the right vehicle for me. Tons of interior space. Handles like a car. Rides like a car. Better fuel economy than *I* would've guessed (23.9 MPG on my odd mix of city and highway driving). It's all plastic on the inside so it's easy to clean. There are nooks and pockets to stuff things everywhere inside it. The seats fold four different ways for interior configurations and they also come out. There are multiple DC outputs scattered around the car so you can run all kinds of electronics. I've had six parking lot collisions so far (all of them where some idiot backed into me, and all of them in the same lot. At different times.), and zero body damage. Other cars bounce off.

And GM has nothing like it.

 

[Buck]

The Element really has been the right vehicle for me. Tons of interior space. Handles like a car. Rides like a car. Better fuel economy than *I* would've guessed (23.9 MPG on my odd mix of city and highway driving). It's all plastic on the inside so it's easy to clean. There are nooks and pockets to stuff things everywhere inside it. The seats fold four different ways for interior configurations and they also come out. There are multiple DC outputs scattered around the car so you can run all kinds of electronics. I've had six parking lot collisions so far (all of them where some idiot backed into me, and all of them in the same lot. At different times.), and zero body damage. Other cars bounce off.

They do seem handy. I have some friends that use them for personal and business use. For computer work they look especially roomy to hall around a lot of cases.

 

[Clocker]

Yes but Honda has, to the best of my knowledge, not devastated the economies of dozens of small midwestern towns that used to have some kind of auto plant. I'll give them some credit for that, Mr. GM Man.

Competition from foreign automakers who have health care liabilities that are next to nothing because of foreign subsidized heath care are one of the big reasons plants in the USA have been required to close down. When domestic automakers are at a $1500-$2000 disadvantage per vehicle because of that, one could surmise that Honda and the other foreign automakers are, to an extent, responsible for devastation of small mid western towns. So, you can thank yourself for that devastation. I don't really think that's totally true but to imply GM is 'devastating economies' because they are a bad, evil company or something is just not within the realm of reality.

Besides that, you might want to check these facts. GM does more for the people in the USA than all foreign automakers combined. The data is a little out of date (the quality picture is better now than it was then) but you will get the point.

One of my favorites (about fuel economy) is that "GM’s West Cost Hybrid Buses save more fuel than ALL Priuses sold in a year"

Sorry if I hurt your feelings by calling your car ugly. Nothing against you!

 

[Clocker]

If you wanted a REALLY ugly vehicle with lots of versatility and cubby holes etc., you could have gotten a Pontiac Aztec. But I'm sorry to say you are too late and they are no longer in production. (Thank god)

 

[Mercutio]

Clocker, my issue with GM has a lot to do with what happened to Danville, Illinois after the parts plant there moved out. I know there's Flint, Michigan - the subject of "Roger and Me" - but it's the same thing. Grown men with no work. A lot of my family lived there, and some of them worked at that plant.
The town looks like there a war zone now.

If you ask me how "US Automakers could compete at a price disadvantage." I might bring up the fact that US automakers need to figure out how to make cars that people actually want to buy. That's very easy when you're working on Corvettes and Mustangs but given all the smart people who work for Ford and GM and Chrysler, why isn't there a anything as appealing as an Element or a Sentra or a Camry or an Odyssey from a US auto firm?

And yes, the Aztech is the ugliest car ever made.

 

[Stereodude]

Competition from foreign automakers who have health care liabilities that are next to nothing because of foreign subsidized heath care are one of the big reasons plants in the USA have been required to close down. When domestic automakers are at a $1500-$2000 disadvantage per vehicle because of that, one could surmise that Honda and the other foreign automakers are, to an extent, responsible for devastation of small mid western towns. So, you can thank yourself for that devastation. I don't really think that's totally true but to imply GM is 'devastating economies' because they are a bad, evil company or something is just not within the realm of reality.

Please... It's not the foreign automaker's fault the big 3 were stupid and gave away the farm to the unions in the 60's and 70's. No one at any of the big 3 had the foresight to look this far down the road. It's not the foreign automaker's fault that the big 3 had dismal quality in the past.

It seems pretty lame to blame your competitors for passing you by because you shot yourself in the foot repeatedly.

 

[ddrueding]

I'd like to take this opportunity to blame the unions. They shouldn't have been given the power they had, and even if they were, they should have been smart enough to not screw themselves. So in effect, I'm blaming the government for sticking it's nose in and supporting unionist crap in the first place.

:ducks:

 

[LiamC]

And yes, the Aztech is the ugliest car ever made.

I beg to differ. I profer the Ssangyong Stavic

Front three quarter:
http://www.drive.com.au/Editorial/ArticleDetail.aspx?ArticleID=10060&vf=24

rear:
http://www.ssangyongaustralia.com.au/stavic_exterior.html

uke-r:

 

[LiamC]

I'd like to take this opportunity to blame the unions. They shouldn't have been given the power they had, and even if they were, they should have been smart enough to not screw themselves. So in effect, I'm blaming the government for sticking it's nose in and supporting unionist crap in the first place.

:ducks:

Aww crap. Welcome to capitalism. It is the Unions job to do the best for its members. Its the managements job to do the best for the company and its shareholders. Its a personal POV whether the govt. should intervene if things are getting screwy. Hard line capitalists would say "no intervention". I'm of the opinion that neither Corporates, nor Unions can be trusted so governments should intervene (on occassion). Th trouble is democratic governments can (and are) subverted by vested interest groups, so its very hard to acheive a balance when one government has control of both houses: successful segue into the other thread about elections.

Anyhoo, be that as it may, as Merc pointed out, the US auto makers aren't producing volume products that US citizens want to buy—plain and simple. Why that is, is open to conjecture. Cars aren't a simple value equation, so saying that they have been priced out of the market is stupid. How many other US corporations have moved offshore to take advantage of cheap labour? And to head off the obvious at the pass, no I'm not advocating moving offshore, but it is an option.

Another strike against management is that the "medical costs is weighing us down" argument has been visible since at least the early '90s. My understanding of the US auto industry is that their response was to make and encourage people to buy the more profitable SUV market, where (at least initially) the US makers did not have competition. Well guess what happens in a capitalistic market? Competition will arrive. The more I write, the more short sighted I think the senior management of the US makers were/are. I am not saying that I could have done anything if I was in charge either, because it may not have been possible to fix some of the endemic problems (such as the medical costs blowout) when faced with powerful Unions until the problem became so obvious that the unions would compromise, but addressing the manufacturing cost base was obvious a long time ago. Be that as it may, the US makers abandoned the volume market to the Japanese/Koreans a long time ago, because it was the easier solution. The offerings in place were half baked, good enough (or so they thought) and built to a price (not to a standard).

The competition meanwhile did their research. They identified what people wanted, built, refined, built, refined, built, refined. The domination did not come over night, it was 30 years in the making.

Clocker has said that the US offering are much better. Maybe they are, maybe they aren't. The only US offerings in any volume here in Aus are Chrysler products—and while their 8 cylinder engines are good, their six and particularly their fours are generations behind the Japanese in refinement/power delivery. If it took the Japanese 30 years to get here, how long will it take Ford or GM to counter the negativity built up, and to produce a product that genuinely rivals the Japanes offerings? The best Ford products (available here) use Japanese donors (Mazda).

The thing I'm wondering, is why with all the market research being conducted, are the US auto offerings missing the mark, and presumably their targets?

 

[ddrueding]

The big problem for the big 3 at this point is their reputation. I haven't even gone to their site to look! Meanwhile I've been to every European and Asian manufacturer's site and checked their line. I know they don't deserve this much abuse (I'm sure they can rival the Malaysians and Koreans, if not the Japanese) but that is what they are up against.

 

[LiamC]

Honda vehicles are, for the mostpart, girly.

I'm not sure how serious you are on this issue C, but there is a problem right there (not with you, but with whomever is styling the US cars). How many women in the US workforce (as a %)? What % of women have influence over the purchasing decisions of their eco/familial unit?

Sure, you can make a car "tough" or "macho", but how many people in your intended market are you going to piss off straight away? Would you rather look tough or be profitable? It seems to me that unless you are going to make two sets of bodywork for one monocoque, then, if you polarise buyers with the skin of your car, you already chopped off one nut.

That's a thing the the asian & european car makers seemed to have learned a lot better. No one would say that their offerings are masculine (or feminine) , but then again, they don't offend 50% of the market (straight away) either.

 

[Clocker]

Stereo -
As I stated, I don't believe everything I stated is totally true. The whole situation is more complicated that anybody here (including myself) know. However, it is naive to make generalizations about how companies act when you don't know the specifics of any of the business dealings. That's what I was trying to point out.

My opinion about styling is just that. My opinion.

Liam-
How do Holden sales do over there?

 

[Clocker]

Also, basing an opinion on anything featured in a Michael Moore film is not that bright. You can thank the Union and their lack of flexibility for any loss of jobs they incur. They still are refusing to recognize they are in a global economy & must compete.

 

[LiamC]

Holden are #2 in the market, but primarily due to the oil shock. Before the oil shock, petrol was in the AU$0.80~0.90c per litre range. After, it went as high as AU$1.60/litre, but traded around $1.20~1.35. Just before Xmas, the price dropped to around $1.05~1.15, but its now selling for ~$1.30.

When the price rocketed, sales of six cylinder Holdens (and Fords) dropped as fast as the petrol price went up. Things got better when the price sank at the end of '06, and with the release of the Pontiac G8, sorry VE Commodore. Ford didn't recover. Their product (BA, BF Falcon) is getting stale. Toyota and Mazda Honda & Subaru picked up the lions share of the market with strong offerings in small fours (Corolla, Yaris, 2, 3 & 6, Civic, Accord Euro). Holden did OK with their Astra (rebadged Opel), and Ford is doing OK with their Fiesta and Focus (rebadged Ford Europe offerings). People downsizing for fuel economy but large car needs went with the mid-sized (our market) Accord Euro, Mazda 6, Toyota Camry, Subaru Liberty (Legacy in your market). Neither Ford nor Holden have any offerings in this market. Ford looks to be bringing the Mondeo back, and I'd expect it to make waves if they can price it right. I don't know what Holden is doing with Vectra. The first one (late 90's) did O.K., but they priced its replacement way out of the market (and it was ugly to boot). Haven't heard much about their plans.

Everything hinges on petrol prices. If they stay high, I expect the medium size/small four markets to continue to dominate. If petrol was to drop and stabilise around the AU$1.05~$1.10 mark, I would expect the large car market to grow again, though slowly. The VE is a very good car for the price, though the AlloyTec six is a bit agricultural when compared to Toyota's offerings in the ~3.5 litre six market. The Ford six is better as well, though a little thirstier. Seriously, if I had AU$35K to drop on a new car now, I'd seriously consider the VE, and after the abyssmal experience I had with a TS Astra in '99~'03 timeframe, that is saying lots about how good I think it is (I swore I'd never buy another Holden). Come on Thursday night! (lottery. $12 mill aussie would do nicely) And I'd still consider VE, even if I could afford an S6 or AMG E class.

Holden and Ford both need a diesel in their range. Diesel is garnering huge press over here, and so they could capture the mindset, even if they didn't sell many vehicles. Both offer LPG versions of their respective sixes which show very low running costs, but the mindset here is that the car is then a glorified taxi.

 

[Stereodude]

You can thank the Union and their lack of flexibility for any loss of jobs they incur. They still are refusing to recognize they are in a global economy & must compete.

Read this article for a good chuckle. It had some great quotes, like this gem

One of the picketers, Martin Shawl, 53, a 28-year Delphi Corp. and General Motors Corp. worker from Bay City, said he doesn't believe the Detroit automakers are in financial trouble.

"It's voodoo accounting," he said, questioning the timing of the Chrysler Group's losses and GM's restatement of earnings due to accounting troubles.

He said the union shouldn't give back anything to the companies.

 

[Mercutio]

Industry in the USA is fucked up. You guys who are deriding unions and what they do need to understand something:

Big industrial-type companies will do anything and everything to anally rape the blue collar dopes who do their work. That's not hyperbole. The relationship between working stiffs and company management is so adversarial that it's close to all out war. That's a problem, but it doesn't rest entirely on the shoulders of unions.

I've worked in Powerplants, Chemical plants, Steel mills and train yards. Since I've started teaching, I personally know three poor bastards who have gotten killed and another guy who lost his arm at the elbow. I've watched, over the course of a two hour class, a hole form in a guy's shirt, because on his way out the plant in his street clothes, he had to walk under a leaky pipe that happened to be carrying acid.

Folks doing industrial work, almost to a one, are put into conditions where safety practices are ignored. They're sleep deprived from double shifts, mandatory OT and swing rotations, told to ignore faulty equipment and are permanently short on manpower because no big company wants to fund another health care package.

Ideally, a union is there to keep all that shit from happening.

You guys get hung up on union guys because they probably do make more money than they should. They have decent benefits and no education (usually). But on the other hand, over the years I've worked with tons of those guys, all over the place, and the rules they have and they pay they get is there for a reason. I go to work in a nice office (well, you've seen it. Maybe not "nice" but not "a place where molten steel could drip and burn through my entire torso", either).

Let me say this again: Big industrial companies treat labor like dog shit. Big industrial companies treat environmental standards (steel mills in my area skirt emissions laws by waiting until late night to dump all the nasty particulates that aren't supposed to be in their smoke or waste water, since the EPA monitoring guys work 9 to 5) and labor laws like dog shit. In the name of shareholder value, any company that still has a defined benefit package in 2007 is looking to bust out of it, all while the poor bastards who are making steel or the trains run on time are breaking their bodies getting the job done.
A union, to the extent that it gives some amount of power back to those poor guys who have to work in those conditions, is a good thing. State and National labor laws are pretty much toothless if you're an employee and not an employer. The union (the threat of work stoppage, really) is really the best chance at getting any kind of improvement in conditions with these companies that are adversarial to even the slightest idea of anything that takes away from shareholder value.

It's certainly true that a lot of unions lose sight of that. The union honchos will hop into bed with management so they can retain their union positions. Back-room wheeling and dealing sometimes means the union loses its ability to stand up on those workplace safety and health care issues. That's a union that's just not doing its job and ideally the rank and file should correct that.

But hey, if you'd rather let the free market control labor relations, if you'd rather go back to the days when the company response to a severed hand or a broken back is "quit bitching and go back to work", all I can say is good luck

Yes, I know that Japanese car companies operate just fine without unions. But they're under Japanese management, and Japanese management is quite a bit better at thinking in the long term.

 

[ddrueding]

Merc,

I read your whole post and I hear what you are saying.

The part that stuck in my head is this:

Yes, I know that Japanese car companies operate just fine without unions. But they're under Japanese management, and Japanese management is quite a bit better at thinking in the long term.

So our problem is immoral/corrupt management and lazy/corrupt government inspectors. Fine, let's fix that. You don't need a labor union for that, you need efficient government and effective prosecutors.

I don't mean to put words in your mouth; but what I hear is that these people, due to their not being intelligent enough to have a position where they are respected, are being abused. Alright, that is bad, but how stupid do you have to be to go back to work when your friend lost his arm/had acid dripped on him/died?! WTF?

Ideally, in a free market or a democracy, things succeed or fail on their merits. If people realize something is a bad idea they stop supporting it. Unfortunately, this requires an educated/intelligent/well informed populace; Something that has been in short supply for decades. In an attempt to keep things running anyway, elements of the free market/democracy are being fenced off or outlawed. As a result of this more stupid/lazy people are surviving to breed, magnifying our initial problem!

To paraphrase a fun sign I saw somewhere:

"I'm not advocating killing all the stupid people, just remove all the warning signs and let the rest sort itself out."

 

[Stereodude]

Clearly Merc's never seen the recliners and the big screen TVs along the line in a Ford plant for the employees who only have to put together 20 of something (contract limit) in an hour and can do it in 15 minutes.

 

[Fushigi]

A friend was a 3rd shift supervising mechanical engineer at one of those steel plants in NW Indiana. He'd watch union guys clock in, go to the cafeteria, and sleep all night so they'd be fresh for their second (day) job elsewhere. Because of the union contract, they couldn't be fired even though the cafe cameras had constant video evidence of them sleeping on -- and through -- the job.


As to the domestic car manufacturers, you'd think naming a car after a sex toy would generate sales. But maybe people are confused about where to put the key. ;-)

Personally, I read reviews and forum comments for most of the cars in any segment when I'm ready to buy. I also pay attention to the ownership experiences of the people I know. Between that and price guides, to date I've always managed to eliminate all domestics, all European, and some portion of the Asians from consideration without leaving my PC. I end up with a short list of three or so vehicles to actually test drive.

Additionally, my preference (not requirement) is to buy American-made more than American-branded. The talk about buying Ford or GM to keep the profits in the US is hogwash. The profits go to the investors and the investor community is just as global as the car market. But by buying a car that was made in the US I know I'm in some way contributing to the livelihood of US workers and in my case the local economy (my Japanese-branded car was built here in Illinois).

 

[Handruin]

Much like you Fushigi, my argument to people who feel they need to buy "American-made" to support the country don't realize that many domestic cars are actually built in Mexico/Canada.

Similar to you, the Japanese car I bought was built in the US in Marysville, Ohio.

 

[LiamC]

More ugliness from Ssangyong

http://www.carpoint.com.au/car-review/2537976.aspx

I'm betting in a market that might crack a million this year, Ssangyong might sell 150 of these things.

As Joseph Bessimer said; "There's a suckker born every minute"...
http://en.wikipedia.org/wiki/There's_a_sucker_born_every_minutehttp://en.wikipedia.org/wiki/Joseph_Bessimer

 

[ddrueding]

Wow, that is ugly. The first thing they need to do is lose the speech impediment when introducing themselves, then hire a design team that is at least headed by a fourth grade graduate.

 

[LiamC]

Is it just me or does it look a little like a PT Cruiser that has been taken to with an axe and beaten (severely) with an ugly stick?

Heh! Ford has nothing to worry about.

 

[Bozo]

Maybe GM should start sweating a little

http://www.msnbc.msn.com/id/18286221/

Bozo :joker:

 

[LiamC]

gotta love Dilbert

http://www.dilbert.com/comics/dilbert/archive/dilbert-20070429.html

 

[CougTek]

Well, more than two years have past and Ford is still there. Explain to me how a company bleeding money could have slashed its debt from 26 bilion to 16 bilion in such a short time frame?

 

[Fushigi]

For one thing, they negotiated a pennies-on-the-dollar deal for paying off some of their debt.