Both Ford and Chrysler are reporting increased sales revenues, but both are reporting decreases in profits. The culprit, inflation.
Inflation is driving up the cost of materials used to build their cars, and even with retail price increases the result is lower profits.
Now Ford is preparing to deal with Union contract negotiations in the United States. Obviously workers are going to want more money, because inflation is driving up their cost of living.
Mazda announced that it will stop production of its Mazda6, at a Ford plant in Michigan. Mazda will move production of the Mazda6 back to Japan.
The Michigan plant is a joint venture between Ford and Mazda, known as AutoAlliance International. The joint venture has been losing money ever since the ‘credit crisis’.
Mazda also plans to build cars in Mexico, mainly for the booming Latin American car market. Some Mexican built Mazdas will be sold in the United States. Rumors are that Mazda wants out of its joint venture with Ford.
Ford announced that it’ll build a transmission factory in China. It will build six speed automatic transmissions. The plant will cost $350 million.
Also, they’re building an engine plant in China, at a cost of $500 million. Ford hopes to have the factories operating in 2013. China is now the world’s largest car market.
GM announced, on April 18, that they will increase the price of their vehicles, because of the rising cost of supplies.
GM said it is not related to the parts supply problem in Japan. Instead they blame it on commodities like oil and steel. GM’s price hike will take effect May 2. Toyota and Ford have already announced similar price hikes.
It was looking like Ford would escape supply problems from Japan, nope. Ford announced that specific colors for their new vehicles will be in short supply, due to the disasters in Japan.
Yes, even paint comes from Japan.
An ingredient used to make Ford’s Tuxedo Black, and three shades of red, come from Japan. That ingredient is called Xirallic.
Ford is trying to find a substitute ingredient.