FORD CEO ALAN MULALLY TESTIFIES ON CAPITOL HILL

[SLGT750]

Originally Posted by Alloy Dave

Why can't someone domicile this thing in the US and make a go of it from scratch?



Dave

I think even better yet would be to go in and clean house with the Big three. That way we can keep the same name but make some profitable companies out of them. This open some doors to new ideas, gets control on the overpaid workers and managment. I think we've got similar problems with the government too many politics that are causing these companies to go under. Lets get down to basics start building a great cars everyone can afford and start pushing back on the asian markets. I would love to see a big comeback of our American companies.

[Johnny Dangerously]

Originally Posted by Joe G

Not if they're smart.


However, it's all about being productive. Is an executives time better spent flying commercial (even if it's first class) where it takes 4+ hours of wasted time to fly an hour vs. a private jet where they can take that extra time and do actual work??

Heck, to a worker who only makes minimum wage and takes a subway or public bus to work, OUR commute in a car/SUV to work seems excessive.

It's all about perspective IMO.

-

At Northrop, the upper level execs (VPs & some directors) take the corporate jets 9 times out of 10 not only because of the time savings Joe mentioned, but because of 9/11. To the bigger companies, it is cheap insurance to fly them on their own jets instead of commercial.


`

[Joe G]

Originally Posted by Johnny Dangerously

At Northrop, the upper level execs (VPs & some directors) take the corporate jets 9 times out of 10 not only because of the time savings Joe mentioned, but because of 9/11. To the bigger companies, it is cheap insurance to fly them on their own jets instead of commercial.


`

I just read somewhere where 2 of the 3 execs were forbidden by the BOD/shareholder from flying commercial for the same reason - security.


-

[Joe G]

Originally Posted by SLGT750

I think even better yet would be to go in and clean house with the Big three. That way we can keep the same name but make some profitable companies out of them. This open some doors to new ideas, gets control on the overpaid workers and managment. I think we've got similar problems with the government too many politics that are causing these companies to go under. Lets get down to basics start building a great cars everyone can afford and start pushing back on the asian markets. I would love to see a big comeback of our American companies.

That's what was supposed to happen when Daimler sold Chrysler to Cerberus. Cerberus found out the hard way that they bought something that's not easily or cheaply fixed.

-

[Johnny Dangerously]

Originally Posted by Joe G

I just read somewhere where 2 of the 3 execs were forbidden by the BOD/shareholder from flying commercial for the same reason - security.


-

We have the same policy for everyone who doesn't get use of the corporate jet. When you have programs with only a couple of key people, you end up flying alone & hopefully making it to your destination if the airline doesn't cancel your flight.


`

[HSURB]

Originally Posted by Johnny Dangerously

We have the same policy for everyone who doesn't get use of the corporate jet. When you have programs with only a couple of key people, you end up flying alone & hopefully making it to your destination if the airline doesn't cancel your flight.


`

JD - I drove right past the Northrop facilities while returning to the airport last week.

HSURB®

[Johnny Dangerously]

Originally Posted by HSURB

JD - I drove right past the Northrop facilities while returning to the airport last week.

HSURB®

And you taxied by the main facility at the airport. You probably went by the one located next to I-195 & I-295. The VPs are in one of the buildings in that facility.



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[68fastback]

Originally Posted by Alloy Dave

If one or more of them fail, it would present an opportunity for someone to start a brand new car company in the US and make it work. We've had entries into the market...look at Hyundai...and just wait for Chery from China. Why can't someone domicile this thing in the US and make a go of it from scratch?

This assumes the existing companies aren't doing as good as anyone else can hamstrung by the disparate [legacy] cost structures. Hyundai succeeded on cost alone -- the product were crap but were very cheap because their costs were sooooo low. As price trumped the competition, they used profits to buy German engineering and Japanese production technology. But none of that would have worked without extremely low costs. At comparable prices they would have been totally non-competitive with the Japanese and newer American offerings, imo. Hyundai also offered that 100K warranty based on sheer bravado since they knew if they went belly up it wouldn't be their problem anyway. Congress is already talking about forcing the domestics to underwrite their warranty funds via separate (hands-off) accounts to protect the American public! Apparently Congress only wants to protect us from such risks when it's an American company -- pretty strange, yes?

Cerberus thought they could do it too and are just slipping under waves at a faster rate -- it always looks easier and it's always harder than it seems ...it's the imbedded legacy costs ...not the traditional production costs, i.e. labor costs burdened with legacy commitments. Think of it this way. A Fusion at the cost of a Focus would eat the Japanese alive, imo... we're talking $2k+ cost differenece (not reatail, it's product cost -- prolly a +/-2:1 multiplier).

GM gets out from under some of the legacy costs in 2010 (the retiree healthcare). Ford is already on a slightly improved footing under the last contract but still neither can just dump their existing pension commitments and ongoing existing health-care commitments or the UAW would walk out (the real 'terrorists' in the US these days, imo).

Even bankruptsy won't cure that, unless it's full asset disolution (not a purchase or reorganization/restructure which retains all corporate obligations). A full disolution of the corporations would require liquidation of assets, I beleive (according to an expert I listened to today), and millions would be unemployed ...it would ripple thru the tier suppliers like the banking failures and lay-bare out market to the imports anyway!

I'd like to see the US do the following: assist financially with loans that permit the big-3 to fund and farm-out the legacy and other 'non-leveled' costs into a separate corporate entity owned and managed by the union(s) but under the due dilligence review of a congressional oversight committee. That frees the big-3 of the non-level burden now (tho they'd still need smaller loans in the short term, imo, because of the economic downturn and a lack of available traditional bank financing they would otherwise use to retool for their existing product plans) and gets the legacy cost off their books and onto the "legacy pension/health-care" corporation's books.

Of course, someone has to pay for those costs and GM and Ford have baked some of that into the present operating plan under the most recent union contracts, but the difference would have to be made up either via private investment (lol -- no one would touch it!) or the government.

Net: same overall cost to the taxpayer as giving the big-3 loans based on a defective cost-structure (which would not change) but rather actually permananently solving the legacy portion or the disparity by getting it off the automakers books entirely now so their product prices can legitimately refelect the benefit immediately. I have no idea how that would be accounted for (Dave, I suspect you would know that tho) but companies like Fidelity administer/manage that sort of thing under contract for corporations all the time.

Originally Posted by Alloy Dave

I'm not the big picture thinking risk-taking guy to do it...but there are people out there that will make it work. Granted, they will have an advantage since they have no legacy costs...but that company will have the opportunity to steal market share, employ people, and all the other good things that come from free enterprise, supply/demand, and so on.

Why take the opportunity away from those who own it just to trash pensions and put retired folks in the street! Besides Congress would never permit this -- they're politicians, after all. I like my plan better ;-)

Originally Posted by Alloy Dave

When you say "jettison" the pensions, not sure what you mean...but the PGBC will pay (up to a point per person) for any lost pension funds. I would not be happy about that...as again it's the taxpayer paying...but it's the system we live in and the workers who earned those pensions did little or nothing wrong...so they deserve them.


Dave

It's the only way to level the playing field on cost, imo. Legacy pensions and health-care. I don't like the taxpayer paying either, but Congress isn't about to mandate a tax on imports equal to the difference (which would be tantamount to mandating the imprts adopt our cost structure), so they have to deal with the disparity somehow to have a viable auto industry -- critical to national security even if marginally profitable, imo.

Btw, China is bailing-out their domestic auto industry to the tune of $55B and Germany said they will do likewise ($$?) -- both reported today.

[SLGT750]

I have to say Ford is doing comendable steps to get Ford back on track and the CEO working for a $1 per year until Ford is profitable is at the top of my list!
GO FORD!!!!
Ford says CEO will work for $1 to get gov't loans - Yahoo! News

[rpretzel]

Originally Posted by SLGT750

I have to say Ford is doing comendable steps to get Ford back on track and the CEO working for a $1 per year until Ford is profitable is at the top of my list!
GO FORD!!!!
Ford says CEO will work for $1 to get gov't loans - Yahoo! News

And my Ford stock is up!!

[68fastback]

I agree... here's the documents they'll turn over to Congress today... great job even a Congressman can understand

Ford Motor Company Business Plan
Congressional Submission Appendix

[SLGT750]

Originally Posted by rpretzel

And my Ford stock is up!!

Just wished I would have bought at 1.01 instead of 1.98, would have better than doubled my money

[Alloy Dave]

Mostly the same info as the above articles...but I'll post anyway.

Automakers turnaround plans sent to Congress - Dec. 2, 2008

[rpretzel]

Originally Posted by SLGT750

Just wished I would have bought at 1.01 instead of 1.98, would have better than doubled my money

Me too. I bought at 1.92

[VaporDude]

It seems that Ford is in much better shape than GM and Chrysler. The sales for November came out today and Ford lost 31 percent of their sales compared to last year. They faired better than any, even Toyota and Honda. Chrysler was the biggest looser at 47 percent.

Here is low down......

Nov. auto sales sink to worst level since 1982: Financial News - Yahoo! Finance

[Carnut]

You both might still double your money

[68fastback]

I think they will ..and then some.

...

If I read between the lines in Ford's reply to Congress, I see:

-we're already well into our restructure ...we didn't wait for the $hit to hit the fan ...major restructuring ...big cutbacks ...major redeployments ...we're on track except for the current fiasco that we didn't cause and we're ready to do even more.
-we don't need a bail-out but a $9B credit-line at gov't=>bank rate will be fine, thank you ...to be 'callable' if we don't make our committed targets ...but that must accommodate new news that neither of us might forsee (since I left my crystal ball on the corporate jet last trip).
-GM does need a bail-out or slice-&-dice ...quickly! ...whatever it takes to make sure they don't fail because that would take out our supply chain too! ...then all bets are off since we're all toast.
-Yeah, I'll take $1 salary because I beleive in this plan and the business (but I didn't say anything about stock options value when we turn this puppy around ;-) ...say, you guys [Congress] do likewise now since you've been non-responsive to our 'playing-field' concerns for some 15 years now? ...see the supplement ..let us know if you don't understand what it says)
-So I'll be going now (btw, did the Dept of Agriculture water the horses yet? ...it's along ride to Dearborn guddyup!)

[Alloy Dave]

The $1 salary thing is a gimmick....what happens with their bonus plans? Most of those guys make 4x as much on bonus money as their salary, so that's really more like a 20% pay cut.

I'm still not impressed...they sell their corporate jets AFTER they get nailed by the press for flying them to Washington...so now it's a big PR stunt to drive hybrids...puhleaaze.

[68fastback]

Originally Posted by Alloy Dave

The $1 salary thing is a gimmick....what happens with their bonus plans? Most of those guys make 4x as much on bonus money as their salary, so that's really more like a 20% pay cut.

I'm still not impressed...they sell their corporate jets AFTER they get nailed by the press for flying them to Washington...so now it's a big PR stunt to drive hybrids...puhleaaze.

Exactly ...the salary thing is just a sideshow. I liked Mullaly's answer when asked on the first trip, to wit: "I'm ok."

I think they should not have buckled on the jets. Their time and safety is too valuable not to have at least a couple at the disposal of the senior execs ...they should have just aluded to the business case (assuming there is one) for the jets and no one would have a problem ...and if they do, too bad -- it's not Congress' purvey to micromanage such stuff, imo.

Congess has become somewhat of a circus of fools ...most seem to be in over their heads when it comes to business matters since most have no real business experience. Fortunately many are there to actually do a job and not just worry about looking good to the camera. I applaud those.

[Alloy Dave]

Originally Posted by 68fastback

Exactly ...the salary thing is just a sideshow. I liked Mullaly's answer when asked on the first trip, to wit: "I'm ok."

I think they should not have buckled on the jets. Their time and safety is too valuable not to have at least a couple at the disposal of the senior execs ...they should have just aluded to the business case (assuming there is one) for the jets and no one would have a problem ...and if they do, too bad -- it's not Congress' purvey to micromanage such stuff, imo.

Congess has become somewhat of a circus of fools ...most seem to be in over their heads when it comes to business matters since most have no real business experience. Fortunately many are there to actually do a job and not just worry about looking good to the camera. I applaud those.

+1 Especially on the part about Congress not having any business sense.