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Ford Motor Co. Message Board

  • fairygredz_r_kooks fairygredz_r_kooks Dec 5, 2008 11:24 AM Flag


    How does the cost of a typical American made car shake out? Where does the $$ go?

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    • Even the manufacturers cannot tell you that because it is based so much on volume that until they know how many of a particular unit they sold over it's product lifetime they cannot spread the fixed expense. Costs of plants, tooling, design, engineering, administration, health care, legal, warranty, are far greater than the actual costs of material and labor to build a car. Something like a Ford Econoline Van is very cheap to build because they don't spend money on redesign ( they only make minor changes, van is pretty much the same for over 20 years ) they use the machine tools until they are completely worn out, they spend very little advertising it ( and still own over 60% of the market ) and warranty is very low, because people using a work vehicle don't bring them in for a rattle or a squeek, as long as they are running they keep them on the road. Meanwhile passenger cars need to be redesigned at least every three years or they get stale in the market, that means retooling as well, and they have to be advertised to the consumer a lot more, and consumers bring the vehicles back for any minor rattle, squeek, etc so warranty costs more.
      Vans and trucks are highly profitable, thats why they depend on them so much ! It is quite possible, even likely that they make nothing at all on something like a Focus or Fusion.

    • Any way you cut it, there is a lot of waste that goes into the cost of a Big 3 auto. The waste comes from long term union contracts that can't be fulfilled at present profit rates. These costs plus much costs that go into salaries and benefits of upper echelon mgt. Both need to be rectified.

    • last time i heard, gm spent more on health care than steel.

    • Did nerdy lose his job? I figured he'd be all over this one.

    • About 10% labor. . .As Per UAW
      About 75% suppliers. . .As Per Ford's COE

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