George Will often uses more syllables than necessary, but this is an interesting take on the Ford problem First George notes that since Americans have on average gained over 20 pounds since 1960, we consume more gasoline just riding around. Like Jerry Flint, George notes that cost cutting only takes one so far. Finally a car that sells like hotcakes has to be introduced. Do you see anything wrong with George's analysis in terms of what we learn in the Cost Accounting Course? Hint, wonders why Ford is still making Mercury when the average buyer is 55 years old, well why indeed? Let's get some posts going on this.
Yes I talk a good deal about Ford and GM but rarely has such a corporate decline been on such a public display. Everything we study in accounting is on the line here. Ford has mortgaged the entire company to raise what it believes is enough cash to hang on till new products save the day. The Cash Flow statement we study in Cost and Intermed II tells the story here. Ford has to stop the hemorrhaging of money with a new model. Will the cavalry arrive in time? If not Ford goes the way of Studebaker, the last company to actually call it quits. American Motors was actually purchased by Chrysler which only salvaged Jeep out of the deal. Which finally raises the question, if the borrowers had to foreclose, what would they do with the factories and the name plate?
There was another front page story on Ford in the WSJ this past week, very good reading. The new president has a War Room with various problems color coded. As the problems improve, the colors change. He is frustrated that different models use for example different ways of turning on the lights and wipers, he thinks that should be standard. Indeed, this is why all Walgreens and Wal Marts are laid out alike, so you know where you are in any store. This is all fine and good but as I have said, it will be DESIGN that wins the day here. Meanwhile Toyota is scheduled to surpass GM as the biggest manufacturer of cars this next year. Quite a feat for a company that arrived here in the early 1970s.
DLE
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