You are right, Q. Of course labor costs have an effect on profit, but it is not the effect that some people think it has. To listen to some people say it, labor costs are the sole reason the automakers had financial trouble and that materials are dirt cheap.
I don't know where informationlouisgreen is coming from. Materials are a far more expensive part of auto assembly than labor, and I have said that many times on here over the years ... even detailing the math. But the people who think autoworkers should work for pennies just don't seem to get it.
- Buyers don't realize TOYOTA truck are built like fine tuned machines AND for heavy duty service. That will change. -
Let's see ... people said that about the T-100 back in the 1990s(a truck which became the laughingstock of the car biz in those days), and then with the first-generation Tundra in 1999, and then with the second-generation Tundra in 2007, and now with the current Tundra ... either 1) there are a LOT of hard-headed people out there, or 2) what you're saying is a great big steaming pile of B(ravo)S(ierra).
Given that Toyota hasn't been able to make that point after 15 years of trying, I'd say it's option 2.
- Flyingthunderbird will argue on and on that labor costs have nothing to do with profit , or that they led to the downfall of the American auto industry. -
I have never made such a statement, and I challenge you to find where I have ever made such a statement. Enjoy the abyss known as the land of "IGNORE."
- I would say they are two different things:
House rarely becomes worthless and stops 'working'.
House is more properly considered and asset with appreciation potential and car is just depreciating asset worth scrap price at the end of its life. Or lawn ornament. -
Fair points both. I agree. :-)
In my view, the problem is that too many people believe a house will always go up in value over time, when in reality it may or may not, at least over the short- to medium-term. We saw the reality of it during the housing bust. Some housing markets have still not recovered from it.
One of my neighbors just put his house on the market; the asking price is tens of thousands less than he paid for it in 2005, and that's with interior renovations done while he owned it. The value declined because of the reset in housing prices. He's going to take a bath on it ...
- in 2003 Ford started building their own 6.0L diesels which had many problems, even right off the lot. -
The 6.0L was built by Navistar in Indianapolis, Indiana. Yes, it did have a number of problems, but it was not built by Ford.
- I see the CEO of Ford is getting a little bonus of $13million plus . -
Well, you saw wrong.
It's a restricted stock grant which he cannot sell until 2016, and then if the price of the shares on the open market falls below the strike price of the stock grant, the grant becomes worthless.
Reading comprehension is not some people's strong suit.
- the Ranger with the 4 cylinder was a truck that you could get 300,00 miles on. Some day they will bring it back RIGHT?? -
I wouldn't bet on it.
I'm not a Ford employee, but what Q posted -
"According to Ford "Ford executives say bringing the components back in-house will reduce costs and simplify service issues when they arise.""
makes a lot of sense.
Additionally, why sub it out when you can do it yourself and increase your profits through maximization of your production capacity?
To be fair, there are some potential buyers who will start to steer away(no pun intended) from the 650/750 because it no longer offers a Cummins diesel/Allison transmission combination. Ford sold 8700 trucks in Class 6-7 last year, making it the third-place player in the segment behind Freightshaker and International.
In one way, dropping the Cummins might actually be a boon to sales ... fleets which currently have F-250 through F-550 trucks with 6.7L diesels now might take another look at F-650/750 trucks because they won't have to stock as many different brands of parts to service them, i.e. they won't have to carry both Ford and Cummins service parts.
We shall see what happens!
Ford is not in the Class 8 "18-wheeler" segment, so I'm not sure that a Cummins-Westport deal would have anything to do with it.
- Aren't you under water the minute you sign and own the car. -
If you finance it, yes. And you'll stay underwater for at least three years.
I've found it amusing that people scream about being underwater on their homes, and yet they think nothing of being underwater on a car they just bought.
I saw Ford's announcement on the new F-650 and F-750 trucks last night. Good looking trucks! I was a bit surprised that they're dropping the Cummins 6.7.