Apr 22, 2006

Built Tuf!

Yeah! Ford was built tuf for the roads, but jzz wonder how long its gonna maintain its tuf status in the auto world itself. Not long enuf, i guess. It has alredy started this year with a very bad note - $1.2Billion loss for the 1st quarter.
How does the remaining year look like? The 2nd & 3rd quarters don't look that great. Not good at all. Its the season of Spring & Summer - implies that the Gas rates are going up which is already at a record of $75/- per barrel. The whole of gas drinking SUV market is going down in US and Ford is going down with it - Escape, Explorer & Expedition. Its almost in the brink of breaking down on Chapter 11 Bankruptcy.

So, where is it turning to?
- Cars.
Yes. Ofcourse, they have to beat the asians (Toys & Hons) in that. 20 new models are coming out. Not sure if all of them are cars. Hybrid models will help it a lot.
- Markets
It should look towards the patriotic amaericans market. They sure are not looking for Asian & German autos. So, its going to be out of GM, Ford & Chrysler.
Also, Mustang has always been on the fav list for the college kids. The concept of 'Kewl'. Use that trend as a health drink. Put more funds for that market. But, the aesthetic of Honda Civic 06 model especially the Coupe, is just amazingly great. Mustang needs to look at its back.
- Cost Savings
Me too! Ofcourse, take any industry set up & talk about Auto industry, you should talk about Lean, Cost Savings, Kaizen, Continuos Improvements, Pull System, Zero Inventory, 5S concept, Supply Chain and what not. Well, for sure this should always be there! But, cost savings is not gonna give too much of cushion for losses like $1 billion. If you are already lean, then where to make the cost savings?
- Cost Cutting
The last alternative is to start cutting jobs & closing plants. Ford is already into it and is thinking about cutting like 34000 jobs this year. Its also stated that they are closing around 14 plants. That sure is a lot, in terms of cost cutting too.
But I just don't understand why it is closing plants which are into the best selling Truck business Ford F150. F150, according to me, should be used as a helping hand to stabilize and put forward the other new 20 models.
Any Biz school talk - Small & simple solutions can sometimes really help come out with big decisions. But, there are times when it is necessary to make hard & big decisions to atleast get into some solutions.

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