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Wings4Life(BANNED)

Ford Hires Second Supplier to Build Steel Frames for F-150 to Meet Demand

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http://www.wsj.com/articles/ford-hires-second-supplier-to-build-steel-frames-for-f-150-to-meet-demand-1438961830?mod=yahoo_hs

 

Ford Motor Co. has hired a second supplier to provide steel frames for its best-selling F-150 truck, hoping to better meet delivery demands amid a parts shortage from its current supplier, according to people familiar with the matter.
 
The Dearborn, Mich., auto maker is struggling to get as many F-150s on dealer lots as originally planned because its supplier, Mexico-based Metalsa SA, is having trouble building enough frames to keep pace with production needs, according to the people.
 
The frame shortage has been going on for months and continues to stifle production at Ford’s two pickup plants at a time when light-truck demand—juiced by low gas prices—is running at a 10-year high.
 
To fill the gap, Ford has tapped Livonia, Mich.-based supplier Tower International Inc. to build the additional frames, which are expected to become available in October, people familiar with the plans say.
 
Meanwhile, the auto maker has been shipping frames to its factories by truck rather than rail to get them there faster but at a higher cost, these people say.

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OK, so what I read is the following:

 

1) Our cost are going up so expect a smaller profit in the 2nd half of the year for the company. Expect the stock to go down as wall street does not like expenses and a shortage of profits.

2) The original supplier who has in history had no problem building frames for FORD is now not able to supply enough. Sound like another story here as what has changed? Labor unions sabotaging the work to force higher pay? Quality problems? There is more going on here than FORD is honestly telling the public. Clearly the new frames with various thickness is an issue based on the wall street story.

3) I do NOT believe their statement of expecting a healthy supercharging of earnings in the 2nd half due to truck productions getting caught up to meet demand. This sounds like some very interesting creative accounting of future sales or holding off on current expenses and taking them next year. Either way, my gut tells me that FORD is going to be hurt by this.

4) Sending such a big team of fixing advisors (60 team members) for a long term visit to manage the production also says we have bigger issues than expected.

 

I right now could NOT recommend a FORD truck, I am taken by the comment of how they have gone thinner on the frame in some areas and thicker in other areas to loose 60lbs. This sounds like the FORD Pinto issue but on frames just like Toyota did with their FJ and they had to come back and stick steel rods in the frame to give it the proper strength. I wonder how long before we hear stories of Frod trucks breaking in two pieces due to the thine spots in the frame.

 

So throwing this out to the forum, does anyone else know if other manufacutres use thinner sections on their frames or is it one consistent thickness?

 

Sounds like a good investigative story on comparing the frames of FORD, GM, RAM, Toyota and Nissan.

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Ford's record profit in the 1st half happened despite being loaded with multiple volume models being hindered by launch costs, less volume produced, and fleets sales reduced to allow retail to catch up.

 

Their second half will have all their key products, Edge, Focus, Explorer, F150 filling lots as well as Lincoln MKX finally helping out the limping brand.  And combined with no more fleet restrictions, FoMoCo should easily break the profit record again and then some.  Ford has stated as much, and I see nothing to prevent that.  Adding another supplier might actually help their costs, due to competitive pricing, not hinder it. But the volume gained back is the big effect.  And as far as frame strength, I don't don't recall all the metrics in gained stiffness, torsional resistance, etc.....but it was substantially improved over the previous frame.  

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OK, so what I read is the following:

 

1) Our cost are going up so expect a smaller profit in the 2nd half of the year for the company. Expect the stock to go down as wall street does not like expenses and a shortage of profits.

2) The original supplier who has in history had no problem building frames for FORD is now not able to supply enough. Sound like another story here as what has changed? Labor unions sabotaging the work to force higher pay? Quality problems? There is more going on here than FORD is honestly telling the public. Clearly the new frames with various thickness is an issue based on the wall street story.

3) I do NOT believe their statement of expecting a healthy supercharging of earnings in the 2nd half due to truck productions getting caught up to meet demand. This sounds like some very interesting creative accounting of future sales or holding off on current expenses and taking them next year. Either way, my gut tells me that FORD is going to be hurt by this.

4) Sending such a big team of fixing advisors (60 team members) for a long term visit to manage the production also says we have bigger issues than expected.

 

I right now could NOT recommend a FORD truck, I am taken by the comment of how they have gone thinner on the frame in some areas and thicker in other areas to loose 60lbs. This sounds like the FORD Pinto issue but on frames just like Toyota did with their FJ and they had to come back and stick steel rods in the frame to give it the proper strength. I wonder how long before we hear stories of Frod trucks breaking in two pieces due to the thine spots in the frame.

 

So throwing this out to the forum, does anyone else know if other manufacutres use thinner sections on their frames or is it one consistent thickness?

 

Sounds like a good investigative story on comparing the frames of FORD, GM, RAM, Toyota and Nissan.

One of the original pitfalls of hydroforming was that once the rails were blown out to the shape of the dies that the wall thickness would vary, depending on the shape of the rail being formed. Because GM has been using this technology since the days of the C5 Corvette, they were aware of the issue and (presumably) engineered the thickness of the rails to maintain a minimum wall thickness even after the rails were blown into shape. With the C7 Corvette they have used this knowledge to vary the thickness of the frame rails depending on what part of the frame they will become part of.

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This is a textbook example of supply-chain management issues. Ford isn't likely to spill any details for competitive reasons.

 

And Wall Street doesn't know jack about engineering a frame for a half-ton truck.

 

Setting aside all the aluminum talk; I highly doubt there is any issue with Ford's frame on the new F150; and that goes for any truck from a domestic brand.

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I strongly disagree.

A good Wall Street analyst may not dig into the minutae of how to make a product, but they know enough to know when a vendor dropped the ball, or when supply issues are being fudged.

As I've said before, the ladder frame is the easiest part of this truck to manufacture. Ford contracted out the job anticipating a certain need of sales, keeping in mind that QA/QC goals had to be met.

Now, said analyst sees Ford farming out frame contracts to a second bidder, who presumably bid higher knowing Dearborn is over a barrel. They have noted the flat sales numbers, and the sales increases in the competition. And they know that Ford has had a recent history of botched launches involving QA/QC (hello, MXZ!)

This is an ENORMOUS screwup for Ford. No amount of spin can change that.

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If I were a frame supplier that wanted piece of Ford's lucrative pie, I would undercut the other supplier going in. 

Capitalism still works, as far as I know.

 

There is no drama here, other than what is manufactured by some.

Only supply issues that appear to have been resolved.

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Nonsense.

The vendor knows that Ford is desperate. It's Dearborn who's at a disadvantage here.

Edited by El Kabong

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Perhaps the business acumen from our fine neighbors in the North is more savvy (not unlike mob thugs), but a wise business that wants to enter into an agreement with one of the first inventors of lean manufacturing.....would price themselves in a manner that appears they are not robbing them blind.

 

But what do I know? I have owned several businesses myself.

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Anyway,

no manufacturer can run their suppliers business for them.  They can only work closely together in their operations management planning stage and of course assist as needed.  But Ford appears to be hedging their bet now and in the future, and there is nothing like a good dose of American capitalism to help keep suppliers motivated to avoid and resolve problems, going forward.

 

 

cue the drama

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There is no drama.

You spewed bs. I shot it down.

I cannot help it you have no idea how capitalism works.

Ford is losing market share in a segment being set alight by cheap gas prices and segment-busting competition. And all because they cannot pick a frame vendor, had poor aim with their product, or a combination of both.

Not good

Edited by El Kabong

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Actually, a single source supplier for a key component of a product can be a fairly big factor to risk exposure.

It certainly was here. Yeesh

But, again: this is not new technology anymore. And this is the second time that Ford has had a launch botched by wonky QA/QC in the last few years. Both products were critical to the company in their own ways, and if we are to judge by the aftermath of the first oopsie then it's not going to end well.

That isn't trolling. That's just history and hard numbers.

"Record Quarterly Profits"

 

 

Perhaps they can teach others a thing or two.

Grab the shears, we got PR fluff in Aisle 3!

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Actually, a single source supplier for a key component of a product can be a fairly big factor to risk exposure.

Indeed it was a risk, and now they appear to have mitigated it.

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High profits is now PR fluff.

LOL

 

Last I heard, it is the bottom line and nothing else matters as much. Certainly not momentary slights in sales volumes.

 

And there are two types of PR, 

 

Pro and Negative.

  1. Negative public relations, also called darkpublic relations , is a process of destroying the target's reputation or corporate identity. The objective in Negative Public Relations is to discredit someone else, who may pose a threat to the client's business or be a political rival.

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I dunno, I'm just not convinced the story is complete; and I didn't detect any stance on the issue being taken by WSJ.

 

I think the answer lies somewhere in the middle. Ford is getting the right mix however; which directly explains their increase in U.S. revenue even with flat sales.

 

I went over Ford's report too. The big thing that I saw was Ford credit. Their receivables have gone up quite a bit, while the 4 different classifications for the ageing schedule have also improved slightly. Ford's sitting on incoming cash. 

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High profits is now PR fluff.

LOL

 

Last I heard, it is the bottom line and nothing else matters as much. Certainly not momentary slights in sales volumes.

 

And there are two types of PR, 

 

Pro and Negative.

  • Negative public relations, also called darkpublic relations , is a process of destroying the target's reputation or corporate identity. The objective in Negative Public Relations is to discredit someone else, who may pose a threat to the client's business or be a political rival.

Where to begin...

First of all, thank you for bringing up negative public relations. I say this because the only reasonable context in this thread for bringing it up is that you consider my posts to be PR.

Secondly, assuming that my posts are indeed PR, they are incorrectly deemed negative, at least by your definition. The negative sales numbers alone, as well as Ford's own assertions that quality issues are to blame, are the CAUSE of my posts. There is no need for me to point out the obvious-Dearborn has done that themselves.

Bottom line: Your flattery is cute, but I would prefer a more lucid source.

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I will add that every single automaker will preach supplier consolidation speak to their customers and shareholders as a way to improve control over pricing and quality. But if there ever arises a need to fulfill demand for a product with production constraints on the end of the supplier - it's a big opportunity missed for the automaker.

 

We don't even know the production mix; but I can guess CrewCab models have the highest take rates. So maybe MetalsA can't produce enough frames because of externalities such as the competition catching up between the downtime where Ford was transitioning to the new model year.

 

For sheer speculation's sake, perhaps all the suppliers of frames for domestic makes use the same basic raw material. With supplier contracts lined up it advance - maybe MetalSa simply can't get enough of the raw material; that Tower industries may just have access to. With the other trucks sales up; there's a good chance raw material may be hard to source in the near term. 

 

I dunno. It's an incomplete picture; but I think Ford did screw up by being too focused on supplier consolidation; while not accounting for the supplier's ability to produce frames at the speed - the same speed that Ford promised to deliver inventory to dealers.

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I dunno, I'm just not convinced the story is complete; and I didn't detect any stance on the issue being taken by WSJ.

I think the answer lies somewhere in the middle. Ford is getting the right mix however; which directly explains their increase in U.S. revenue even with flat sales.

I went over Ford's report too. The big thing that I saw was Ford credit. Their receivables have gone up quite a bit, while the 4 different classifications for the ageing schedule have also improved slightly. Ford's sitting on incoming cash.

They will likely need it. Those lost sales are highly unlikely to be coming back.

Ford anticipated X number of sales. The vendor promised X number of frames. Dealers have X number of units on their lots. As of last quarter Ford made X number of dollars.

And that's all well and good.

But Ford did not get X number of sales, and GM has got X+60,000 since last year. And that WILL mean that Ford will make X-quite a bit going forward.

And on their most critical product. The one they count on to shoulder the load.

Not good

Edited by El Kabong

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I dunno, I'm just not convinced the story is complete; and I didn't detect any stance on the issue being taken by WSJ.

 

I think the answer lies somewhere in the middle. Ford is getting the right mix however; which directly explains their increase in U.S. revenue even with flat sales.

 

I went over Ford's report too. The big thing that I saw was Ford credit. Their receivables have gone up quite a bit, while the 4 different classifications for the ageing schedule have also improved slightly. Ford's sitting on incoming cash.

They will likely need it. Those lost sales are highly unlikely to be coming back.

 

 

I will say again, unit sales and market share do not have a direct correlation to revenues. 

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I dunno, I'm just not convinced the story is complete; and I didn't detect any stance on the issue being taken by WSJ.

 

I think the answer lies somewhere in the middle. Ford is getting the right mix however; which directly explains their increase in U.S. revenue even with flat sales.

 

I went over Ford's report too. The big thing that I saw was Ford credit. Their receivables have gone up quite a bit, while the 4 different classifications for the ageing schedule have also improved slightly. Ford's sitting on incoming cash.

They will likely need it. Those lost sales are highly unlikely to be coming back.

 

I will say again, unit sales and market share do not have a direct correlation to revenues.

If Ford decides to become a finance company that makes cars as a sideline (or as I prefer to call it, GM circa 2006) that is their call.

But they do not conjure money out of thin air. Every company covets market share, because ultimately it IS the product that drives profits. If it is not, then eventually whatever IS will take priority-again, GM circa 2006.

Agreed suave.

Don't believe the NPR fluff.

ROFL@guy who sees me as PR threat

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I dunno, I'm just not convinced the story is complete; and I didn't detect any stance on the issue being taken by WSJ.

I think the answer lies somewhere in the middle. Ford is getting the right mix however; which directly explains their increase in U.S. revenue even with flat sales.

I went over Ford's report too. The big thing that I saw was Ford credit. Their receivables have gone up quite a bit, while the 4 different classifications for the ageing schedule have also improved slightly. Ford's sitting on incoming cash.

They will likely need it. Those lost sales are highly unlikely to be coming back.

Ford anticipated X number of sales. The vendor promised X number of frames. Dealers have X number of units on their lots. As of last quarter Ford made X number of dollars.

And that's all well and good.

But Ford did not get X number of sales, and GM has got X+60,000 since last year. And that WILL mean that Ford will make X-quite a bit going forward.

And on their most critical product. The one they count on to shoulder the load.

Not good

 

 

 

I dunno, I'm just not convinced the story is complete; and I didn't detect any stance on the issue being taken by WSJ.

I think the answer lies somewhere in the middle. Ford is getting the right mix however; which directly explains their increase in U.S. revenue even with flat sales.

I went over Ford's report too. The big thing that I saw was Ford credit. Their receivables have gone up quite a bit, while the 4 different classifications for the ageing schedule have also improved slightly. Ford's sitting on incoming cash.

They will likely need it. Those lost sales are highly unlikely to be coming back.

Ford anticipated X number of sales. The vendor promised X number of frames. Dealers have X number of units on their lots. As of last quarter Ford made X number of dollars.

And that's all well and good.

But Ford did not get X number of sales, and GM has got X+60,000 since last year. And that WILL mean that Ford will make X-quite a bit going forward.

And on their most critical product. The one they count on to shoulder the load.

Not good

 

 

Past performance does not always predict future results.

 

Anyways, Ford did actually say in their 2013 F/S, I know, I read them very, very clearly that the aluminum transition would cost time and money and they forecasted lower sales. So, we're in agreement. How is that prediction coming true; in any way a screwup?

 

It's just a lagging indicator which proves the prediction.

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