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Author: TMFBreakerRob Big gold star, 5000 posts Old School Fool Home Fool Supernova Phoenix 1
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Subject: Detailed Ford Presentation Date: 2/13/2013 10:41 AM
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http://corporate.ford.com/doc/ir_20130115_Deutsche_Bank_Glob...

Lots of details on Ford's plan for global growth. And, on slide 9, there is a picture of the upcoming Ford Edge. Slide 33 has some info on the upcoming Ford "minivan".... a lower priced alternative to what is in the North American market these days. And.... info on the future of Lincoln. It's long on Marketing buzz and a bit short (IMO) on meat. Oh well, can't expect them to pull back the curtain *too* much.

This link will show you just about everything you want to know about Ford's future.... and it also addresses the "mileage shortfall" of hybrids as tested by Consumer Reports.

Of special note: Look at the global customer satisfaction numbers!

That lays out the future of Ford, friends.

Rob
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Author: JustMee01 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17413 of 18091
Subject: Re: Detailed Ford Presentation Date: 2/13/2013 11:03 AM
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Thanks for that link, Rob.

For those that might like it, there is audio that's available:

http://corporate.ford.com/our-company/investors/upcoming-inv...

Spoiler alert: it's long...

Peter

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Author: TMFBreakerRob Big gold star, 5000 posts Old School Fool Home Fool Supernova Phoenix 1
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Subject: Re: Detailed Ford Presentation Date: 2/13/2013 11:40 AM
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Was there anything interesting from the Q&A Peter?

Rob

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Author: JustMee01 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17415 of 18091
Subject: Re: Detailed Ford Presentation Date: 2/13/2013 4:26 PM
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Hey Rob,

Not too much that was startling in the Q&A. They tried to pin Mulally down on Europe. He didn't divulge too much more than has already been outlined.

A few questions on margins arose. They were phrased a couple of different ways. One analyst pointed out that cost savings from platform consolidations should really only just be beginning. If so, wouldn't you expect that your just at the beginning of your margin improvement? Another analyst just flat out asked if they were giving conservative guidance.

The first one was answered strategically. They pointed out that the savings are being pushed back into product development, highlighting that what's being saved in platform development is being spent further strengthening the brand: faster refresh rates, more tophats, facility improvements/ capex and greater advertising spend.

The second question was answered more from an accounting point of view. Asked if the 8-10% pretax margin was low-ball to manage expectations (my wording, not the analyst's), the response was basically no. He pointed out that: (1) the trend is to smaller vehicles, hurting margins, (2) this guidance is meant to be a cycle average and you'll see variation around that guidance, and (3) that the bahavior of the competition needs to be considered. On this last front, they sound skeptical that the industry will not see product dumping in the NA market for share. Whether or not they can maintain discipline and protect margins is up in the air. Especially, if the SAAR picks up to 16-17 range, you may see return to the bad practices the industry is well known for.

Asked about diesels in NA, they basically said that NA air quality standards make diesels impractical except in certain heavy duty cycle vehicles. They constantly reevaluate and have the vehicles in Europe if they ever want to bring them. (Pointed to weak diesel sales as evidence backing them up.)

They were questioned on their poor showing in Consumer Reports quality scores. Pointed to the SYNC issues, tranny problems primarily. Tranny issues are beign fixed, and the infotainment systems are being reworked with Microsoft. They think Sync is a bigger cause of the problem, since all of their internal quality metrics are up in SA, Asia and Europe where Sync is not a major component of sales. At the same time, they pointed out that customers really like Sync, just also complain about the bugs. At the same time it's raising complaints, it's bringing in customers. On the whole, it's a plus.

The most interesting question was on F series. An analyst pointed out that Ford and GM are on dramatically different paths with their new truck programs. GM's emphasis is on the commercial buyer, concetrated on affordability and reliability. Ford's is on higher end product, with more technology and features. Why such a dramatically different view of the future for the segment?

They did emphasize that the Atlas is a concept vehicle, and that needs to be taken into consideration when using it as a paradigm for their direction. However, they did also admit that their strategy is to the high end and that they're only following what their cutomers are buying. EcoBoost take rate is exceptionally high. Options packages are running toward the high end. The market is telling them that customers want these high end features and are willing to pay for high mileage, high content trucks. To directly quote: "our bet is consistent with where we see our customers."

So, this does seem to be a differentiator between Ford and GM; one that even they acknowledge. It should be interesting to see which strategy wins out.

Peter

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Author: TMFBreakerRob Big gold star, 5000 posts Old School Fool Home Fool Supernova Phoenix 1
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Subject: Re: Detailed Ford Presentation Date: 2/13/2013 6:08 PM
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The most interesting question was on F series. An analyst pointed out that Ford and GM are on dramatically different paths with their new truck programs. GM's emphasis is on the commercial buyer, concetrated on affordability and reliability. Ford's is on higher end product, with more technology and features. Why such a dramatically different view of the future for the segment?

They did emphasize that the Atlas is a concept vehicle, and that needs to be taken into consideration when using it as a paradigm for their direction. However, they did also admit that their strategy is to the high end and that they're only following what their cutomers are buying. EcoBoost take rate is exceptionally high. Options packages are running toward the high end. The market is telling them that customers want these high end features and are willing to pay for high mileage, high content trucks. To directly quote: "our bet is consistent with where we see our customers."

So, this does seem to be a differentiator between Ford and GM; one that even they acknowledge. It should be interesting to see which strategy wins out.
-- Peter

Thanks for the added detail, Peter.

That's a pretty interesting situation. As I've read online forums, there is a lot of lamenting that cheap pick-ups are disappearing, yet Ford's point that they're supplying to customer demand is a good point as well. Generally, the forums seem to be looking for a *really* cheap entry level vehicle. Perhaps these people will shift to buying used, another OEM may come in with a stripped cheapo vehicle.... or maybe those folks will realize they can live without a pick-up after all. Those are viable alternatives for a lot of folks..... who will have to take what they can get.

I'm a bit leery about leaving the low price market with the end of the Ranger, but it's certainly nice that Ford is picking up so many sales at the high end.

Rob

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Author: poach One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17423 of 18091
Subject: Re: Detailed Ford Presentation Date: 2/14/2013 7:11 PM
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Thanks, good stuff!

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Author: SkepikI One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17425 of 18091
Subject: Re: Detailed Ford Presentation Date: 2/17/2013 5:26 PM
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<I'm a bit leery about leaving the low price market with the end of the Ranger, but it's certainly nice that Ford is picking up so many sales at the high end.>

There is no doubt the Ranger is/was a good vehicle. My 97 Ranger beater with 127,000 looks like hell but keeps going...my only Ford. As does my brothers 95 at 225,000. I dont know what F makes on such a vehicle, BUT giving up cheap low margins for spendy in demand high margin trucks? Seems like a shareholders dream. The Ranger used market will be lasting a long time for those who need small and cheap and nothing is cheaper than a used truck that lasts a long time. Likely a market F can be rewarded for ignoring as long as they are filling high demand elsewhere profitably. These are the kind of management decisions that give me hope and keep me long F.

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