Well, the gang's all here for a FoMoCo earnings conference call this morning that I expect to be lossgastic. We're expecting to hear from Alan "New Guy" Mulally, the man-with-a-plan hired in September to captain this plane with an engine fire. We'll also here from Don "What Me Worry?" LeClair, the Chief
French Puff Pastry
Financial Officer for FoMoCo. And then there's us — standing at the ready to live-blog the Dearborn-based automaker's 2006 earnings call. So refresh this page like mad kiddies 'cause it's going to be one FoMoCo
8:59:46 AM: Ok, got my coffee and we're ready to go...waiting...nice hold music...very soothing.
9:02:20 AM: Ok, they're announcing names — BORING!
9:03:49 AM: Ooh, Alan's speaking — he sounds VERY confident!
9:03:56 AM: There's slides? WTF?
9:04:00 AM: Damnit, where are they?
9:05:41 AM: Alan says they recognize the position they're in — and he claims the year's finished as a success.
9:06:23 AM: Here are the slides, by the way. They're in PDF, as an FYI.
9:08:03 AM: Hey, good news — PAG reported profits in the fourth quarter. Sounds like a December to remember!
9:08:38 AM: Don's up to bat now and we're on slide six — riveting.
9:09:23 AM: Don sounds exhausted. Poor Don, he's had a lot of counting to do recently.
9:09:51 AM: Seriously though, the man sounds exhausted. Hell, both he and Alan sound tired.
9:13:46 AM: Don makes me sleepy today. We need to start a drinking game where we drink shots of espresso.
9:16:14 AM: Ok, it's kind of bugging me that everyone forgets the folks reading along have an extra slide at the beginning — so when Don says "slide 14," he really means "slide 15." It's the little things, you know?
9:16:27 AM: Ooh, Don sounds so excited talking about product.
9:16:58 AM: 70% of product refreshed by 2008. How will they do that? Kill more product lines? Cause yeah, then you'll have a 70% refresh.
9:17:08 AM: Is there a little kid or some intern on the other line?
9:20:04 AM: Slide 19, Don!
9:20:43 AM: Yay Ford Europe!
9:20:49 AM: Way to have a good year!
9:22:02 AM: 494,000 sales, $8.8 billion in revenue, $232 million in pre-tax profits. That's up from 472,000 sales, $7.9 billion in revenue, $24 million in pre-tax profits in Ford Europe.
9:23:03 AM: P.A.G. had 4,000 more in sales this year, and made another $600 million in revenue and made over $120 million in pre-tax profits.
9:23:24 AM: Asia-Pacific...huh? Why'd they change the slide layout?
9:23:35 AM: Oh wait, here we go:
9:24:09 AM: Asia Pacific, 3,000 more in sales, $400 million lower in revenue and $96 million less than 2005.
9:27:07 AM: Page 27, Don!
9:27:24 AM: Page 28, Don!
9:30:00 AM: Did Don just say $2,100 per vehicle is pension costs?
9:31:54 AM: Oh, good — advertising costs are remaining the same. That means we get all sorts of more Bold Moves (TM) in 2007!
9:33:16 AM: HOLY SHIT! THEY EXPECT AUTOMOTIVE RESULTS TO BE WORSE IN 2007!!
9:34:47 AM: In big bold letters at the bottom of page 37 (and yes, we just realized it also says "slide 36" at the bottom): MARKET SHARE AND MOST EARNINGS COMPARISONS WILL BE TOUGH FOR THE NEXT THREE QUARTERS
9:36:29 AM: Alan's talking again — he's got four key priorities:
1.) Restructure the Company; be profitable at lower volume and changed mix
Launch new products
Eliminate excess capacity
2.) Accelerate product development and reduce manufacturing complexity
Leverage global assets
Develop a global product plan
3.) Secure financing — Accomplished; deploy capital wisely
4.) 'Working Together' (Teamwork, Accountability)
9:40:50 AM: We're taking questions from analysts now
9:41:27 AM: Alan is committed to working with the administration
9:41:35 AM: Alan and George, sitting in a tree
9:41:57 AM: e-t-h-a-n-o-l-i-n-g
9:43:20 AM: Couldn't hear the first two because some telemarketer called, but someone's asking "Alan, what are your thoughts on Jaguar and Volvo?"
9:45:35 AM: Alan just dropped Land Rover into the question — "Fordian" slip perhaps?
9:45:49 AM: Jaguar's making good efforts in cost restructuring?
9:45:50 AM: Really?
9:45:54 AM: $715 million loss?
9:45:56 AM: WTF?
9:46:13 AM: "continue to look at our entire portfolio strategically...blah, blah, blah."
9:46:25 AM: Jonathan from Morgan Stanley
9:46:51 AM: "Was $5.something billion in automotive losses...what do you need to see to put out additional cost-cutting?"
9:48:10 AM: "Profitability by 2009 and on...having said that, operating mode ahead...every quarter every year, identifying...opportunities to improve the plan...and over time we'll be able to do that."
9:49:34 AM: Side note: long, long, long...and boring!
9:50:21 AM: JP Morgan wants to know about the union receiving reductions on health care — is it an attainable goal?
9:51:06 AM: Alan: "We've continued to talk on it with the UAW, and over the years we've made some real progress...the UAW is working to improve our profitability."
9:51:32 AM: Don: "We've had a good constructive dialog with the unions...our goal is to improve competitiveness for Ford Motor Company."
9:52:48 AM: More boringness on Ford Credit.
9:54:01 AM: Don says Ford's flexible cause it's got money. Umm...what if it's all been earmarked?
9:54:21 AM: Credit Suisse: "where are we on the Super Duty launch — are you building?"
9:54:59 AM: Credit Suisse: "how do you expect to see market share trends in 2007 — do you expect it to come back up in later years."
9:55:07 AM: Alan: "Mark's here!"
9:55:10 AM: MOVIE STAR!!!
9:55:21 AM: He was actually at the launch! OMFG! Hawt!
9:55:32 AM: The Mullet is back!
9:55:46 AM: Wait, I just missed what he said, I was too busy having a mulletgasm.
9:56:17 AM: Oh, wait he's now talking about market share loss due to fleet sales dropping.
9:56:26 AM: But they want retail sales to increase.
9:57:56 AM: Did Don just say he wants to keep everyone straight there? When did Bill Ford enter the room?
9:58:20 AM: Wait — those are two WHOLLY UNRELATED questions above. We swear. Scout's honor.
10:00:46 AM: More union questions!
10:01:04 AM: I'm lagging and out of red bull. Well, time to just do vodka shots.
10:01:29 AM: Question: "philosophically, how do you feel about a strike?"
10:02:56 AM: Don: "I've always approached by really focusing on the business....the only way for this to work for all of us...is if we have a growing plan for Ford. If not, all the stakeholders...the only way it can work is if we have profitable growth going forward. Either one of us can destroy Ford Motor Company...what do we really need to do to improve the competitiveness of Ford..."
10:04:04 AM: Follow-up: "It seems the unions need to save face with their members. Is there any way to do that without a strike?"
10:04:30 AM: Alan: "I've been impressed...we've all worked to improve our competitiveness...everybody's been working the competitiveness of Ford."
10:07:05 AM: Q: "...move to common platforms. We've seen this for some time. Does this mean we're on a new trajectory? When will we see results? Will it be a couple of years down the road?"
10:08:48 AM: Alan: "I've been impressed with the initial progress made on this around the globe. A few years ago, the leadership decided one of the competitiv. factors would be to use more of our products and leverage our assets across the globe...I'd say our plan now is to accelerate that trend...we can absolutely design or create a more flexible production system every year going forward." Did somebody mention a "blah, blah, blah"? Oh wait, I just did. Oh, there's more — this is Alan's "move forward."
10:10:15 AM: Alan: "steps forward, steps back" — what is this, a Paula Abdul song?
10:11:26 AM: Yay, media time!
10:12:40 AM: Micki Maynard, NYT: "walk through some numbers here...straight time man capacity of 3.0 million...last year, 3.1 million units in NorAm...if the broader market's expected to drop, and market share's going to go down — how do you expect to hit 3.0 million."
10:12:52 AM: Don: "I don't see those numbers here."
10:13:04 AM: MM: "Will you pay bonuses?"
10:13:27 AM: "We haven't made final decisions but we expect to remain competiive....we'll make those decisions in the next couple of months."
10:14:02 AM: Bryce Hoffman, Detroit News gets the cock-block, goes after the bonuses as well: "How will it affect union negotiations?"
10:14:12 AM: Alan: "Our commitment's to working together."
10:15:33 AM: TK, AP: "Of the $33.9 billion in automotive sector cash, you borrowed $12 billion? How much can you tap into?"
10:15:46 AM: A: "We can tap any of that money when we want."
10:15:57 AM: Don wants to answer Micki's capacity question now.
10:16:24 AM: "That's capacity to sell to all of NorAm, and to be shipped overseas.."
10:17:55 AM: Amy Wilson, Automotive News: question about Alan's management team — "is it exactly where you want it to be?"
10:18:22 AM: Alan: "No plans at this time...Jerry...lots of experience in HR and negotiations."
10:19:24 AM: Alan: "On the Ford leadership team, I'm really, really pleased. Mark clearly has been doing a great job in the Americas..."
10:24:35 AM: John Stoll: "Follow up on bonuses...it's sorta surprising you're thinking about bonuses...is this a shift in mentality on how to compensate, uh, workers? And uh, how will it be perceived, uh, by the UAW?"
10:26:02 AM: Alan: "We are paying our employees...all of our employees...we have to be competitive. At the end of the day, all of our going forward will be determined by our employees. The issue on the leadership and the bonuses...pay is tied to the success of the plan...you want to make sure you're paying people for...what they are achieving. We need the best and motivated team..."
10:26:50 AM: Speak up, Harry Potter!
10:30:06 AM: Alan just wants to remind everyone they've led in trucks for 30 years.
10:30:30 AM: He thinks they can create a strong product lineup. Has he seen the fugly Focus?
10:31:30 AM: Sarah Webster, Freep: "your spend is said to be competitive, but the spend on R&D is increasing at GM and Toyota...should you be upping that spend?"
10:31:38 AM: Alan: "Well, good morning to you, Sarah..."
10:33:22 AM: Alan: "We want to get more investment for vehicle...I'd like to say it again...I've looked through the entire product development plan...I think we've got the right amount of money...but for every car we'll have higher flexibility through a production system that'll be higher volume. I feel very good about the investment we've got right now."
10:34:53 AM: SW: "Can I ask about the bonuses...aren't they already properly compensated?"
10:35:30 AM: Alan:"...you want the total compensation to be competitive...and at the higher levels more of your compensation is at risk...you want them compensated for performance..."
10:36:21 AM: Jeff Mc. @ WSJ: "something, something, something...if you're exiting the rental car industry, wouldn't you be seeing pricing become better?"
10:36:33 AM: Don: "We expect pricing overall to go down..."
10:38:07 AM: Yay, we're almost done! Last question coming up!
10:39:27 AM: John Murphy, Merrill Lynch: "sneak two questions in here..."
10:40:03 AM: Fuck, another financial guy. Damn it — I like the media questions better — they're bigger dicks than the financial folks...
10:40:20 AM: Murphy: "let's talk about the new way, way, way forward plan"
10:40:22 AM: Epic.
10:40:43 AM: Murphy: "Do you need to come up with a new plan after the way forward plan?"
10:40:55 AM: Don: "Cash position, blah, blah, blah..."
10:43:40 AM: Alan: "On your other question, on the plan, and the way going forward...we have a solid plan, that's got the investment going forward, near-term — that's even higher quality...clearly, Mark and the NorAm team led this when they looked at the world with really clear glasses in '04 and '05, I think they also took a really good move, as the economic situation deteriorated, making a really good acceleration...focus the rest of the plans...all that's already reflected in the current plan. We have put out really clear metrics to share with you outsside of Ford and people in here..."
10:44:27 AM: Alan: "We'll update as is necessary. All businesses are looking for ways to...keep improving...their plan. We'll be looking for ways to...do the same...and improve the plan as we go forward."
10:44:32 AM: FIN
10:44:48 AM: Thank god, we're done — I'm going to go and vomit a little.