Bronco production update 8/9: Commodity issues far beyond MIC tops. Chip shortage reaches Bronco supply chain (NO COVID TALK)

[navi]

Any fix or accommodation that cost money is not going to happen. They will protect the bottom line. Extra expenditures impact projections on which the market relies.

What is Ford's best bottom line option for delivering the purgatory Broncos.
They must be desperate to get that 200 mil of inventory sold, right?

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[SpringTXOR]

What is Ford's best bottom line option for delivering the purgatory Broncos.
They must be desperate to get that 200 mil of inventory sold, right?

0% profit on something that is siting in a lot not getting sold. Add in the time value of money to an asset sitting unsold and it actually costs you money. Simple math to figure out a dollar value of that compared to dollar value and of various fixes, come on @Ford Motor Company use those MBA's.

 

[CO-Bronco]

Some people were dumb enough to put thousands down with no Guarantee of delivery, some also sold their car, went and got financing, insurance quotes and made a bunch of other poor life decisions none of which are Ford’s problem. Until my dealer called and said we picked it up and that was after truck driver fell off truck at depot and broke his ankle I didn’t do anything but wait, patiently. This is a want, not a need that I could have lived without indefinitely. If a Bronco is a need for you,you have already messed up.

I waited until my dealer contacted me saying my Bronco is "built and awaiting shipment".

Then I sold my car.

That was 27 days ago.
I live 1.5hr away from MAP.

I'm now returning to the office in T-6 days.
Looks like public transit for me...

Fords system staying "Built and awaiting shipment" is what convinced me to sell my car. Surely you can sympathize with this and not call this a "poor life decision"?

 

[GoTigersGoBronco]

I still believe the hard top foibles are price-point related. Ford is attempting to sell tops at half the price of Stellantis. You can have Good, quick, or cheap. You just can’t have all three.

 

[LadyBronco]

"I've caught wind of several alternatives being considered... some more drastic than others."
@PREMiERdrum Do you feel comfortable sharing any of this information?

 

[Dads_bronze_bronco]

Yeah, that is the high dollar low volume power sunroof top. i.e., not the top that is on 90% of the wrangler hard tops and all the gladiator hard tops.

 

[UtahLars]

Any fix or accommodation that cost money is not going to happen. They will protect the bottom line. Extra expenditures impact projections on which the market relies.

While I do not disagree that Ford will be reluctant to go out of pocket substantial amounts to accommodate affected customers, it is not correct to say that unanticipated expenditures won't be made because of prior market projections. When Ford provides its financial outlook each quarter, it supplies nearly a page and a half of disclaimers to the basic effect of, projections are just projections and may not be achieved, and all sorts of things (they give a long list) may happen that cause projections to be incorrect.

Ford will assess the situation on an ongoing basis and should, if it is doing its job for shareholders, make the decision that it expects to have the best return for shareholders. If it expects that most customers will put up with delays without defecting, as you say Ford will likely do little or nothing in the way of accommodation.

If it expects that alienation of customers will have a substantial cost, it has an incentive to take corrective actions to ameliorate that problem as long as the expected cost of the actions is less than the expected cost of the status quo. The expected cost of the actions need not be zero. And it will not have any securities law liability for doing that, even if it causes projections not to be achieved, unless a shareholder can prove that Ford knew those projections were wrong or unreasonable at the time they were published (its not enough to show that they became wrong later because of unanticipated developments).

That being said, you are probably right that Ford will take at most token actions to address unhappy buyers. But that's because they know that the worst that can happen is that order cancellations grow substantially, and they probably believe they have alternate buyers for a lot of vehicles if that happens.

 

[ATLColonial]

Update: Ford is currently building MIC top Broncos, non FE's.

See this is what I don't understand - if there really is an issue with these tops, such that there is a substantial chance that they won't be able to send them out, why even build these?

 

[West1]

While I do not disagree that Ford will be reluctant to go out of pocket substantial amounts to accommodate affected customers, it is not correct to say that unanticipated expenditures won't be made because of prior market projections. When Ford provides its financial outlook each quarter, it supplies nearly a page and a half of disclaimers to the basic effect of, projections are just projections and may not be achieved, and all sorts of things (they give a long list) may happen that cause projections to be incorrect.

Ford will assess the situation on an ongoing basis and should, if it is doing its job for shareholders, make the decision that it expects to have the best return for shareholders. If it expects that most customers will put up with delays without defecting, as you say Ford will likely do little or nothing in the way of accommodation.

If it expects that alienation of customers will have a substantial cost, it has an incentive to take corrective actions to ameliorate that problem as long as the expected cost of the actions is less than the expected cost of the status quo. The expected cost of the actions need not be zero. And it will not have any securities law liability for doing that, even if it causes projections not to be achieved, unless a shareholder can prove that Ford knew those projections were wrong or unreasonable at the time they were published (its not enough to show that they became wrong later because of unanticipated developments).

That being said, you are probably right that Ford will take at most token actions to address unhappy buyers. But that's because they know that the worst that can happen is that order cancellations grow substantially, and they probably believe they have alternate buyers for a lot of vehicles if that happens.

Agree that earnings projections are footnoted to death by legal. Ford is covered legally to miss projections and not run afoul of the SEC. The market is not as forgiving when projections are missed.

Two follow up points: 1) I probably do not know what I am talking about; and 2) I am not convinced that there is a big enough outcry to worry Ford on late delivery of Broncos (also see point 1)

 

[frogier]

While I have your attention (and while the Band Camp jokes are going strong!)... our program's new Premier drums (example below) are DONE and will leave the factory tomorrow or Wednesday. My company, Musick Limited - Premier USA, is providing these drums at cost and I'm personally covering all the importation fees. However, freight to get them here is clocking in at about $2,400 in the current market... about 3 times what it should be in a normal market.

If any of you would like to help offset some of these costs, please know how much myself, my kids, and our booster club would appreciate it. Contributions can be sent via Paypal to [email protected].

I appreciate being a part of this community!

Money on the way! Thank you...

 

[navi]

While I do not disagree that Ford will be reluctant to go out of pocket substantial amounts to accommodate affected customers, it is not correct to say that unanticipated expenditures won't be made because of prior market projections. When Ford provides its financial outlook each quarter, it supplies nearly a page and a half of disclaimers to the basic effect of, projections are just projections and may not be achieved, and all sorts of things (they give a long list) may happen that cause projections to be incorrect.

Ford will assess the situation on an ongoing basis and should, if it is doing its job for shareholders, make the decision that it expects to have the best return for shareholders. If it expects that most customers will put up with delays without defecting, as you say Ford will likely do little or nothing in the way of accommodation.

If it expects that alienation of customers will have a substantial cost, it has an incentive to take corrective actions to ameliorate that problem as long as the expected cost of the actions is less than the expected cost of the status quo. The expected cost of the actions need not be zero. And it will not have any securities law liability for doing that, even if it causes projections not to be achieved, unless a shareholder can prove that Ford knew those projections were wrong or unreasonable at the time they were published (its not enough to show that they became wrong later because of unanticipated developments).

That being said, you are probably right that Ford will take at most token actions to address unhappy buyers. But that's because they know that the worst that can happen is that order cancellations grow substantially, and they probably believe they have alternate buyers for a lot of vehicles if that happens.

what's the upshot?

 

[navi]

See this is what I don't understand - if there really is an issue with these tops, such that there is a substantial chance that they won't be able to send them out, why even build these?

These aren't flawed like the bad batch.

 

[ATLColonial]

These aren't flawed like the bad batch.

Do we know this for sure?

 

[GoTigersGoBronco]

Yeah, that is the high dollar low volume power sunroof top. i.e., not the top that is on 90% of the wrangler hard tops and all the gladiator hard tops.

You’re right, but that doesn’t negate the fact that a majority of sunroofs and convertible tops in the world are made by Webasto.

All that said, it seems doubtful Continental has a bunch of unused capacity to take over the Bronco program in the short or mid term.

 

[The Dmv]

0.0%

So slightly more likely than Ford taking responsibility for the dumpster fire, apologizing, and giving us details.

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