2008 Ford F-450 4x4 Super Duty Lariat Crew Cab Pickup 6.4l Diesel on 2040-cars

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Ford earnings take a dive on investment, slowing sales; workers get $6,900 in profit sharing

Ford Motor Company's pre-tax profits for 2014 took a beating, falling to $6.3 billion, a $2.3-billion drop from 2013, while overall revenues fell from $139.4 billion to $135.8 billion. Net income for 2014, meanwhile, plunged 56 percent, from $7.18 billion to $3.19 billion. Yeah, those aren't great numbers. While Ford's figures are largely down across the board, some of the weaker numbers aren't too difficult to explain away. The company launched 24 vehicles across the globe in 2014, including some of its biggest and most important volume models, like the 2015 F-150, as well as iconic offerings like the new Mustang. The result of this is both increased investment as well as a drop in total sales – US market numbers were down 164,000 units compared to 2013. Recall claims and high warranty costs also did a number on the Blue Oval. "2014 was a solid yet challenging year for Ford - with our investments and a record number of new products launched around the world positioning us for strong growth this year and beyond," Ford CEO Mark Fields said in a statement. Ford's 50,180 UAW workers in the United States will receive profit-sharing checks of $6,900. In some markets, Ford's fortunes were impacted by outside factors. Europe, for example, recorded more sales (up 70,000 units) and higher revenues (up $2.2 billion), but still reported a $443-million pre-tax loss. Blame was placed on the crumbling Russian economy, which has suffered from sanctions and slumping oil prices. Despite its troubles last year, the company still seems bullish on 2015. Ford's pre-tax outlook remains unchanged, as the company expects to make anywhere from $8.5 to $9.5 billion on the back of higher revenue from the company's automotive operations. We expect strong growth and improved financial performance in 2015 driven by our investments in new products and capacity," Ford CFO Bob Shanks said of the company's future.

Subprime financing on the rise in new car sales, leasing too

We all remember the financial crisis that began several years back. At its core was a splurge of subprime lending for housing loans. The housing bubble burst, triggering a collapse of the mortgage-backed securities market. Apparently, those types of loans still exist in the automotive industry, and the market share for these types of "nonprime, subprime, and deep subprime," loans has grown 13.6 percent compared to the third quarter a year ago.
According to an Automotive News report, high-risk lending expanded to 24.8 percent of total loans in Q3, up from 21.9 percent for this time last year. As this level increased, average credit scores of borrowers dropped to 755, down from 763 a year ago. In that time, the average financing amount increased $90 per vehicle, to $25,963.
At 818, Volvo maintains the highest per-owner credit score, while Mitsubishi has the lowest, at 694. The highest rate of borrowers was at Toyota, with 14 percent of the market, followed by Ford with 13.1 percent and Chevrolet at 11.1.

Ford Gets The Aluminum F-150 Ready For Prime Time

Russell Barnett, a Ford dealer in Tennessee, is ready for aluminum. Ford is using the metal almost exclusively in body of the 2015 version of its best-selling F-150 pickup, which starts arriving at dealerships next month. Barnett is already answering customers' questions about the truck. And he's updated his repair shop not only for the F-150, but in anticipation that other Ford brands such as the Mustang will eventually make the switch from steel. But, just in case, he ordered some extra steel-bodied 2014 pickups. "There will be some people who won't want to change for a while," says Barnett, who says pickups make up around half of the annual sales at his dealership in rural Winchester. Ford is doubling down on aluminum, which is lighter - and more expensive - than steel but just as tough. The new truck is the company's response to customers' requests for a more fuel-efficient and nimbler pickup. Fordhopes the advantages outweigh customer doubts about the durability of aluminum or potential repair costs for the pricier metal. It's a big risk. So far this year, one out of every three vehicles Ford sold in the U.S. was an F-Series pickup. Morgan Stanley estimates F-Series trucks account for 90 percent of Ford's global automotive profit. On Tuesday, it kicked off production of the new truck at its Dearborn Truck Plant, four miles from the company's headquarters. "Yeah, this is a risk, but it's one well worth taking." said Bill Ford, the company's executive chairman, as he stood alongside the assembly line. "For our customer, this is a big, big leap forward." The trucks have been the best-selling vehicles in the U.S. for 32 straight years; last year, Ford sold nearly 100,000 more full-size pickups than General Motors. Aluminum isn't new to the auto industry, but this is the first time it will cover the entire body of such a high-volume vehicle. Ford made 647,697 F-150 pickups at its two U.S. plants last year; that's one every 49 seconds. If Ford's bet pays off, it could pad its lead in the lucrative truck market. More importantly, aluminum "future proofs" the truck - and the company - in an era of rising fuel economy standards, says Karl Brauer, a senior analyst with Kelley Blue Book. Ford will announce the truck's fuel economy figures later this month. That could determine if it steals customers away from the Silverado or Ram. Truck buyers are among the most loyal in the auto market.