I don't understand the sales argument. It's my understanding that there is still a huge waiting list for these vehicles. It's not like they're sitting on lots.. or are they?
this post was submitted on 17 Oct 2023
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It’s my understanding that there is still a huge waiting list for these vehicles. It’s not like they’re sitting on lots… or are they?
From what I've seen from folks that follow new car/truck sales it goes like this:
- Ford announces great product for reasonable price of lets say $45k
- Lots of folks sign up on waiting lists at the advertised price.
- Because of the dealership model, Ford has to sell/ship the product to a dealership.
- Dealership marks up the product $10k-$40k as a "Special Market Adjustment" then installs lots of non-optional options which raises the price by another $10k-$20k.
- Buyer on the waiting list comes in to pick up their order and sees what they were expecting to pay $45k now would cost them $85k.
- Buyer balks and dealership says "take it or leave it, we'll sell it to someone else".
- Buyer leaves.
- Buyer cancels their spot on the wait list.
- Dealership tries to sell it on the lot at $85k.
- Dealership does this to dozens of these vehicles.
- Dealership lot is full of these highly desired vehicles now NOT desirable because of the increased expense.
- Dealership cancels orders for additional units.
- Ford concludes "No one wants to buyers want our product even at $45k. We need to sell more gas vehicles. Thats what the buyers are telling us".
- Ford lays off workers making the product that was formerly in high demand.
Yes, but Ford is also culpable. My understanding is they mostly made the higher end models to try to get profitable more quickly. Great, but no one can afford them. Part of the expected demand was for models people could afford to buy
“We had all these people on the waiting list for a $45k truck and we don’t understand why they’re not buying the $85k truck we’re mostly building”
It also doesn't have to be this way. Other auto manufacturers dictate the terms to the dealerships, specifically with the market adjustments. They ensure the people who want their cars can afford their cars, regardless of what the market is doing.
Ford isn't doing this and their cars are sitting on the lot because no one can afford them.
Could be the striking workers have disrupted component flow enough that these workers were running out of things to do.
Ford lays off 700 who were building electric version of F-150 | CNN Business::Ford is laying off about 700 workers who build the F-150 Lightning, the electric version of its best-selling pickup truck, and unlike other recent layoffs this one has nothing to do with the ongoing strike by the United Auto Workers union.
Not due to the strike, apparently.
Would a company ever admit to laying off workers because of a strike? Seems like a sure fire way to lose in court.
I guess it all depends on the motive
They've already said they would fire around 1000 of those striking workers. So this does not seem to be a concern.
Why produce more if you can stagnate production and just charge more per unit? It's not like you can go buy an electric truck from anyone else so your demand isn't going to decrease much. This is how OPEC operates when setting fuel prices.
This is the best summary I could come up with:
Ford had temporarily closed the plant this summer to upgrade its production capability, and the company said this latest layoff is related to “multiple constraints, including the supply chain and working through processing and delivering vehicles held for quality checks after restarting production in August.”
Sales of the Lightning fell 45% in the third quarter compared to a year earlier, the company reported earlier this month, though Ford said it expected to post an increase in sales during the final three months of the year as capacity increases at the plant take effect.
The UAW’s targeted strike at a total of five assembly factories at Ford, General Motors and Stellantis have prompted all three companies to lay off workers.
On Thursday, company executives said there could be a total of 4,600 layoffs by the end of this week at its various plants due to the expansion of the strike to Kentucky Truck.
GM has laid off 2,300 workers that it attributes to the impact of the strike, although no additional layoffs have been announced in recent days.
But the F-150 Lightning workers who are laid off will be eligible for both unemployment and sub pay, according to Ford spokesperson Jessica Enoch.
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