Ford – Page 1464 – I wish I had more to offer

GM files racketeering lawsuit against FCA, saying it corrupted labor talks

CLOSE Open warfare broke out between two Detroit automakers Wednesday, with General Motors suing Fiat Chrysler Automobiles, alleging that it cost GM billions of dollars by corrupting labor talks over the past decade. GM also alleged that former FCA boss Sergio Marchionne authorized bribes and conspired with the UAW to “effectively take over GM through… Continue reading GM files racketeering lawsuit against FCA, saying it corrupted labor talks

Neuron EV Drives into the Spotlight at CIIE

IRVINE, Calif., Nov. 20, 2019 /PRNewswire/ — Neuron EV, the world’s first electric utility vehicle company, has just completed a successful exhibition at the Second Edition CIIE in Shanghai, China. Attendees eager to catch a glimpse of the visionary automotive company’s new offerings gathered at their glossy black and silver stage situated next to the booths… Continue reading Neuron EV Drives into the Spotlight at CIIE

@Ford: Corsair Grand Touring Arrives; Grows Lincoln’s Electrified Portfolio with Segment-First Technology

All-new Corsair Grand Touring pairs advanced hybrid technology with Lincoln-first electric all-wheel drive to deliver a powerful, confident and nimble SUV that builds on the brand’s commitment to electric propulsion Launching next summer, Corsair Grand Touring offers intuitive technologies and signature Lincoln amenities – including Phone As A Key, Lincoln Co-Pilot360™ Plus and drive modes… Continue reading @Ford: Corsair Grand Touring Arrives; Grows Lincoln’s Electrified Portfolio with Segment-First Technology

Pentagon acquires Sytner’s Seat dealership in Huddersfield

Pentagon Motor Group has continued its 2019 car dealer network expansion by completing the acquisition of Sytner Group’s Seat UK franchised location in Huddersfield. The AM100 retail group, which was acquired by the vehicle division of Imperial Holdings SA, the Motus Corporation, back in August 2017, has followed its addition of three Ford sites, a Vauxhall dealership and… Continue reading Pentagon acquires Sytner’s Seat dealership in Huddersfield

Aston Martin launches first SUV, hopeful of a turnaround

FILE PHOTO: An Aston Martin logo is displayed at the 89th Geneva International Motor Show in Geneva, Switzerland March 5, 2019. REUTERS/Pierre Albouy LONDON (Reuters) – Aston Martin, which has seen its share price plunge this year as sales failed to meet expectations after a stock market flotation, launched its first sport utility vehicle on… Continue reading Aston Martin launches first SUV, hopeful of a turnaround

Buick reveals power, features of 2020 Encore GX compact SUV

CLOSE LOS ANGELES — Buick revealed details on engines and features for the brand’s upcoming 2020 Encore GX compact SUV ahead of the auto show here. Sized between the little Encore and not-quite-so-little Envision, the Encore GX will feature a pair of turbocharged three-cylinder engines. 2020 Buick Encore GX (Photo: Buick) Three-cylinder engines are rare… Continue reading Buick reveals power, features of 2020 Encore GX compact SUV

@Ford: Bill Dirksen Retiring as Ford Labor Affairs VP, To Be Succeeded by Company’s Kevin Legel

DEARBORN, Mich., Nov. 19, 2019 – Bill Dirksen, Ford Motor Company’s vice president of Labor Affairs for the past six years, has announced he will retire effective Dec. 1. Dirksen’s decision to conclude his 35-year Ford career follows ratification of a new four-year labor contract by employees represented by the United Auto Workers. More than… Continue reading @Ford: Bill Dirksen Retiring as Ford Labor Affairs VP, To Be Succeeded by Company’s Kevin Legel

Four must-haves for the Tesla ‘Cybertruck’ all-electric pickup truck

Tesla is set to unveil its pickup this week and it needs to be widely different from its current lineup. The current line of Tesla vehicles share a lot of parts, and, logically, the Tesla pickup will do the same. However, a truck has different demands than a passenger car or sport utility vehicle. It… Continue reading Four must-haves for the Tesla ‘Cybertruck’ all-electric pickup truck

Reviving The “Tesla Deathwatch” — With A Totally Different Spin

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Published on November 18th, 2019 |

by Frugal Moogal

Reviving The “Tesla Deathwatch” — With A Totally Different Spin

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November 18th, 2019 by Frugal Moogal

After the recent unveiling of the Ford Mustang Mach-E, I feel like it’s time to revive the Tesla Deathwatch.

No, not the Tesla Deathwatch that you may have read about on this site before, where certain websites made daily updates gleefully predicting that Tesla would soon run out of money and be forced to shutter operations (more than a decade ago).

Instead, as I mentioned in my previous article, the Mustang Mach-E may end up being a Ford killer. Simply put, Ford is carrying around $100 billion in debt. If the transition to electric mobility happens too quickly, Ford could be left with a ton of debt and factories full of internal combustion technology that end up being stranded assets. If this happens, then the attempt to transition from internal combustion technology to electric propulsion may end up leading to Ford’s demise.

Anyway, in this new sporadic series, I’m going to take a look at legacy automakers to see the risks that this transition has to them and how they are coping with it. I will also try to estimate the risk that Tesla has created through its disruption.

And that’s the thing — when new technology comes along, often the most vulnerable are those companies that dominated the previous technology, as they are too invested in that technology to make a sudden change. A sudden change renders a significant portion of their business obsolete immediately, while the new technology has no guarantee of profits.

There are lots of recent examples of this that I could use to highlight the change. It was anticipated that at any time Sears could destroy Amazon, but it’s pretty clear who is winning that battle. Blockbuster Video dominated the home movie industry, and then Netflix came along. Atari dominated the video game industry, so it stopped innovating and let Nintendo — who had even asked them to release the NES in the United States under the Atari brand — to take over.

Instead, I’m going to take a quick look at a company that I think is perhaps the best parallel to what is happening with automobiles right now, Kodak.

The Kodak Story
The Kodak story is an absolutely fascinating one, and I strongly suggest if this interests you at all taking some time to really research it, but here’s the basic overview:

In 1975, a Kodak engineer by the name of Steve Sasson invented the first digital camera. He was told not to tell anyone about it, with a former Kodak vice president directly admitting that they could not sell it because they feared the effect it would have on the film market, which was Kodak’s main source of revenue.

And film sales were great, peaking in 2001 as consumers had started to purchase digital cameras. Kodak faced a problem — the manufacturing process for its film, which was truly extremely complex to make, had nothing in common with making semiconductors to make great digital cameras. Add to that the fact that companies could buy the components to make a digital camera from various providers and create their own cameras quickly, without being encumbered with significant debt and assets from businesses that were suddenly losing market share.

And market share dropped quickly. The market peak of 2001 was followed by a few years of the market slowly contracting, following by that trend gaining speed like a snowball rolling downhill. By 2010, worldwide demand for photographic film had fallen to less than 10% of what it was in 2001. In 2012, Kodak filed for bankruptcy.

Perhaps even more interesting, even before the market peaked, Kodak realized that it would need to start selling digital cameras. In 1999, Kodak held a 27% market share on digital cameras. As a matter of fact, my first digital camera was a Kodak camera.

The problem was Kodak wasn’t making money on those cameras. Indeed, this incredible article from Reuters, written shortly before Kodak’s bankruptcy, noted that in 2001 Kodak was losing $60 for every digital camera it sold. It didn’t matter that Kodak was actually doing pretty well in digital camera market share — capturing over 20% of it in 2005. The combination of stranded assets in its core business and losing money to maintain market share was unsustainable.

Kodak emerged from bankruptcy in 2013, but is a shell of what it used to be. In Q1 2001, Kodak reported revenues of $2.975 billion and net earnings of $150 million. In Q1 2019, Kodak reported revenues of $291 million and losses of $16 million.

The Kodak Lesson
It’s difficult to turn a profit when your core, established business is in free fall and the only way for you to gain market share in the future of your market is to lose money on every sale you make. After the peak of film sales in 2001, and a few years of relatively small declines, the market for film nosedived at 20 to 30 percent per year.

Kodak was still making money on its film divisions when it went out of business — it is just that the business had shrunk to a point nearly unimaginable a few years before. In reading through Kodak’s annual reports, I found that Kodak made a profit of $1.43 billion on revenue of $10.231 billion for film production in 2000. By 2011, the company made a profit of only $34 million on revenue of $1.547 billion. I feel it’s also worth noting that Kodak lost $349 million on its digital camera division that year.

There are two lessons here that are important. The first is that markets for well established goods can collapse at nearly unimaginable rates as new technology disrupts the old. In 2000, absolutely no one expected that physical film sales would topple as fast at they did. In 10 years, Kodak lost 85% of its sales to the disruptive change that digital cameras brought about.

The second thing is that as markets shrink with well-established groups, so do the profits. In 2000, Kodak earned nearly a 14% profit on it film sales. By 2011, the company was earning 2%.

To me, the lesson is clear — technology transitions happen much faster than people and companies usually expect, and once they catch on, the companies leading the prior iteration of the industry are the first to go out of business.

Tesla is the force that has created incredible disruption within the auto industry. Whether you are a fan or a short seller, Tesla has proven that electric cars can be safer, easier to maintain, cheaper to operate, better for the environment, and more fun to drive than their internal combustion counterparts. They can also use established technology for connectivity to improve the car through time.

I’m not using this article today to look at any particular automaker, but I think the parallels with some are extremely strong. We’re entering a new era, and it’s just as likely that the next generation of automakers will be dominated by newcomers like Tesla, Rivian, and BYD as it is to be generated by the prior generation’s top manufacturers. In fact, if history is any indicator, it’s much more likely that the next generation will not be dominated by the prior generation’s manufacturers at all.

After all, Ford, GM, and Chrysler didn’t start by manufacturing horse buggies.
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About the Author

Frugal Moogal A businessman first, the Frugal Moogal looks at EVs from the perspective of a business. Having worked in multiple industries and in roles that managed significant money, he believes that the way to convince people that the EV revolution is here is by looking at the vehicles like a business would.

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Ford to introduce all-electric Mustang Mach-E to Chinese market in 2021

LOS ANGELES, Nov. 18 (Xinhua) — A senior manager of Ford Motor has disclosed that the company's all-new, all-electric SUV, donning the iconic pony badge and named Mustang Mach-E, would be introduced to the Chinese market in 2021.
The plan was revealed by Darren Palmer, Ford's global director for battery electric vehicles, in a document released to Xinhua after the company's first all-electric SUV was unveiled Sunday night at Jet Center in Los Angeles, a hall neighboring Tesla's factory.
Mustang Mach-E is the first vehicle based on the company's new EV architecture as part of an 11.5-billion-U.S. dollar plan to develop 40 new all-electric and hybrid models by 2022.
It also marks the first time that the name of Mustang, famous for its original model which has remained in uninterrupted production since its debut in 1964, is being used on a new electric vehicle.
As of August 2018, over 10 million Mustangs, an icon of American pop culture, had been produced in the ..