Wednesday, May 25, 2005


I'm reading this article about how Ford is buying back some parts plants.

...Ford would take back 24 ailing work sites and pay $550 million in restructuring costs as part of a deal that could eventually save the automaker millions on parts.
Is it just me? Or did it just say that Ford will spend half a *billion* dollars to save a few *million*? Maybe the reporter is just using millions as an expression of "a lot of money" and not literally a few million dollars.

Further down...

Ford said the agreement could save it $600 million to $700 million by the end of the decade. But it expects to incur charges of $450 million to $650 million this year and $300 million to $500 million between 2005 and 2009...
Um... so optimistically, Ford will spend only $750 million. Also optimistically, they will save $700 million. Eh... so in the best case scenario they still lose $50 million? What the hell?

Merrill Lynch analyst John Casesa said in a research note Wednesday that when Ford spun off Visteon it forced the supplier to try to compete with wage levels that were too high. Casesa said the deal is a positive for Visteon but a negative for Ford.
OK. It's beginning to make sense now. Visteon didn't want Ford's baggage, so they're asking Ford to take back all the crap so they can actually be competitive. Nice one.

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