SanMarinoCpe

just trying to stimulate the forum with food for thought

Scott Evil

Joe...

The cash-flow statement is the best way to analyze how a major manufacturer is financially performing.

The accounting rules allow for some interesting interpretation of financial performance and companies will go to great lengths to emphasize the points they want you to hear. In the case of Ford, they very likely had negative cash flow for the third quarter and an operating loss. There was also some "special charges" which Ford will mention, but not include in their discussions.

If your question is: Are they using their current financial situation and the economic environment as an excuse to cut bait here and there, the answer is a definite yes. Ford will be a better company in the end, but a lot of people will lose their jobs. What is disappointing is that the company and the UAW can not seem to work out fair solutions so the impact is less drastic. What I have read is that the Brookpark plant, the Lorain plant and one on the east side (engine plant maybe) are all in jeopardy. That is a pretty nasty blow to NE Ohio.

SanMarinoCpe

I would agree, some thoughts are there using the reports to bust the union down to making concessions which will inturn boost profits. It just seems like a business practise to manipulate the books to show situations that are not actually taking place. I guess you can do that with just about any major Corp.

Ubetit

It's amazing how much I can legally manipulate even our paltry accounting.

David1

You don't have any notes from Anderson Accounting do you

efthimios

btw....my Father-in-Law has worked for Packard/Delphi for 37 years...he is currently the Union Chairman there.....time will tell his fate there

PLYRS 3

please explain how?

our co. will make a bajillion dollars this year, but we don't have a penny in the bank.

Scott Evil

Think of it this way. ford will flood the media (who is as much to blame) with headlines like "Volvo says Q3 profit up to 369.5 million." What does that tell you? Is that versus last year or last quarter. Plus it probably excludes something special from the prior time period--yet you get hooked by a number. Plus by the time Ford is done applying corp overhead, the number is likely much lower.

Ford and GM have focused their development on trucks and SUVs for 5+ years. Their car lines have suffered heavily. New car product is slow to impress and roll-out. Their business strategy (in north America) has failed to see consumer tastes change. This is the real problem. It is not so much about breaking the union. I personally believe the UAW has lost its way in modern times. The result is that their workforce is over paid and the legacy costs of their retirees has a substantial impact on the earnings on the big 3. I struggle to find a comapriable industry anywhere in the US today that successfully operates under this model. Most have gone belly-up. Look at the steel industry, for example. I blame the company management who negotiates from a static positions and assumes brighter days are always ahead. If the UAW wants to survive, they need to take the high road and demand management changes in exchange for concessions. The Japanese and Koreans are kicking ass at Detroit's expense and the Chinese will be here before they know it.

Scott Evil

The cash flow statement reports all inflows and outflows of funds. You may have huge sales (cash inflows), but that can be offset by costs, financing, and investments (cash outflows).

No company really wants a lot of money in the bank. Ideally, you want those cash assets to be working for you, for example, build another plant. Your capital/equity position is what must be managed and maintained.

you jerks make me sound like a banker!

PLYRS 3

LOL - i know what a cashflow stmt is.....i'm an accountant.