Ford Drops, Tesla Grows, Airline Refunds

Paul J Daly  0:01  
All right, there you go. Wednesday, October 30, we are still in Lafayette, Indiana, at the Roman Auto Group, broadcasting live from inside a beautiful Kyle showroom. Today we're talking about Ford stock, dropping Tesla, making more vehicles, getting refunds from airlines. Everybody's favorite thing to do on a weekend. I love getting I love getting airline refunds on the weekend. Yeah. So here we are. Here we are about being in Lafayette, Indiana, is the fact that it's like just, I feel like three blocks from the Central Time Zone line. So furthest,

Kyle Mountsier  0:37  
it was eight o'clock this morning and dark is

Paul J Daly  0:43  
I have a blast just talking to the leadership and the staff of the Roman Auto Group filming an episode for season two of more than cars. But season one is not finished. We have an episode dropping two weeks from today. Yeah.

Kyle Mountsier  0:59  
Gonna be one o'clock Eastern in the afternoon, and we are. We got to go to Mohawk Chevrolet, which, if you haven't seen they've got a whole series called The dealership there, and they've just got an incredible team. So you're going to want to check that episode out. Make sure and circle it on your calendar. Go to the LinkedIn event, yes, on our LinkedIn page, be there with us on the live stream. All

Paul J Daly  1:19  
the hold is so fun. Being there is great. And it's a, it's a fun episode yesterday, you and I had a little bit of a competitive so there's a lot of competition. I'm not going to give anything away. Can't give everybody just say. Kyle got kicked in the face. I got kicked in I didn't do it on purpose, I promise. But you know, you'll get to see that I

Kyle Mountsier  1:37  
still got hard feelings about,

Paul J Daly  1:40  
hey, I was I almost gave away a little bit. Yeah, stop talking about that, but yeah, so let's talk about some news and get you on your way this morning. So basically, Ford is adjusting their full year targets after posting a very large drop in net income in their q3 earnings report due to expected EV delays. Ford is reporting this due to EV delays and associated costs. Associated associated costs, I'm going to say, like, hi, I spent that on associated cost. You know,

Kyle Mountsier  2:11  
it's a little too much. Yeah,

Paul J Daly  2:13  
sometimes I have problem with associated cost. Revenue rose 5% overall, four to 46 billion, marking the 10th consecutive growth credit something to celebrate for now is projecting full year EBIT around 10 billion down from 12 billion their estimate earlier in the year. I know, I know. It's funny, just saying this now only 10 billion,

Unknown Speaker  2:33  
top of billion off the top,

Paul J Daly  2:36  
cost cutting efforts of 2 billion this year have been offset by inflation and warranty costs. Obviously, Jim, Jim talking Farley talking a lot about cost cutting last year, he says, CFO. John Lawler says, Actually quote cost is what's holding us back, but we're focused on improving every corner. What else you going to say when you're publicly traded? Well

Kyle Mountsier  2:55  
done. PR team. But here's, you know, obviously they kind of said, hey, look, we're going to put the press the pause button on a lot of the EV strategy that they had going into q3 and q4 which is the majority of the costs, the that they're that they're backed up against, associated, the associated costs with, with all of that, just like Pressing pause and keeping that stuff not turning revenue. But this is something that I think every business is dealing with, is like the rising cost of doing business due to cost of goods, anything like that. And yet, you know, tightening a little bit on on margins because of that. So, you know, hey, look what's a couple billion between friends, right? Yeah.

Paul J Daly  3:40  
I mean, it's good that they focus, that the Farley put such a such an initiative in motion last year, yep, to do very aggressive with cost cutting, because if they didn't, it would be a disaster this year. And you never know what's coming. I mean, hopefully a lot of the the cost of doing business start to level out here soon. That's what it seems like we're reaching that with interest rate drops and inflation. So we'll see. But you know, Ford has been on this very steady path, and we were just talking, I don't know if it was today or last night, like, can you imagine having to, like, all the time, energy and effort to report every quarter, and just the the scrutiny that even with every 90 days, 90 days goes by so quick, it's wild. So Respect, respect amidst all the costs and associated costs,

Kyle Mountsier  4:19  
the associated costs.

Paul J Daly  4:21  
Tesla announced they have a very ambitious target to produce an additional half million vehicles next year. Then they did leveraging, they say, factory enhancement, new production methodologies, and they just want to grow overall their footprint. Tesla's ramping up both Giga Texas and Giga Berlin, as well as a few of the other ones to adopt new, more streamlined techniques and practices that they've deployed on models like the model Y, the model three. They're going to do that across their whole lineup, and also make some enhancements to those as well. Basically battery technology, using structural battery. And they're 4680 battery cells. They've been working on those, and now they're just pumping those out. Like, like, I don't know, like, a Pez dispenser, like, help the range be high, help production go faster. They're upgrading factories. Both input. I mean, this is getting they're making everything better. They're making everything they're making everything better. And Elon says, quote, this is not just about meeting demand, it's about setting the pace for the global shift toward electrification, yeah, which

Kyle Mountsier  5:27  
is something that they've constantly done. They've just always outpaced demand and expected demand to pick up, right? It's interesting, though, because you also read a story this week that they're continuing their 0% interest in Asian markets, right? Because they are trying to go back and regain market share in those in those areas. But there's plenty of other areas of the of the of the globe, where they are, they are the leaders in basically creating market share. So if you create another half a million or half a billion units of of potential demand. The chances are, what he's betting on is like this will get swallowed up by net new demand when we have the availability, and, more importantly, when we have enough scale to get the right pricing matrix for these you know,

Paul J Daly  6:11  
I think a lot of people, and we've talked about this before as well, they look at Tesla's responses and their actions as reactionary or maybe a little erratic, and that could possibly be because Elon is a little erratic, right? Seems a little erratic. However, knowing some people that have worked at Tesla, they said it's actually the opposite, right, like a lot of the decisions are made on production and pricing and adjustments and incentives are actually very well thought out, very well, data driven, so they kind of know what they're doing. So I don't know it's hard to bet against. Tesla, yeah. I mean, it looked like they took a couple shots at like, I know they're, they're gonna do it. So another half million Tesla. EVs, I think it's gonna happen. Yep.

Kyle Mountsier  6:51  
Man. Segway, game is off today. It's nothing. It's hard when you sit that are never gonna happen. That's right,

Unknown Speaker  6:57  
yeah.

Kyle Mountsier  7:02  
So the new requirements that were talked about a few months ago for airlines just dropped, giving customers quicker access to refunds on disrupted flights. Airlines must now issue automatic cash refunds for significant delays or cancelations. Wow, here's the here's the requirement delays over three hours for domestic, been there, and six hours for international flights, quality, been there, yeah, the six hour for international flight, that'd be pretty aggressive, but the three hour for domestic, like that's happened that had amount of time, it's a good bit. So cancelation. Nathan, I'm looking at you. Yeah, right. Poor Nathan, he's always getting caught in it. Um, check bag fees must be refunded for delayed luggage beyond 12 hours or 15 hours international so if you don't get your luggage in 12 hours, yeah, exactly.

Paul J Daly  7:50  
And they say, Come get it.

Kyle Mountsier  7:52  
Come and get it. Transportation Secretary Pete Peter gag said, passengers deserve to get their money back without headaches or haggling.

Paul J Daly  8:03  
So listen, if there is a refund mechanism that goes in place, look, it's always, it's it's a, it's a double edged sword, because regulation always hinders businesses from growing up faster. However, on the consumer side, this is a frustration that millions of people deal with, and I wonder how much money an airline makes, because people just give up, oh, I'm sure, right? Because sometimes it could be, like, 100 or $200 and you're like, getting this labyrinth of, you know, virtual assistance and long wait times and emails that you don't know who you're emailing to where you're just like, you'll forget it. But now you get the money back on your card. Not a travel credit, yep, not a trip credit, which are also confusing to use at times absolutely like, do I have one? Do I not have one? The other screen all that? Yeah. So I'm excited about this. And in our industry, a lot of people flying, a lot of people traveling. I think this is a

Kyle Mountsier  8:53  
thing, just like as a form of practice. In our industry, we have times where refunds, where things going back on cards are important to customers absolutely, you know, expenses, deal doesn't come back whatever you know, and you've got to refund a down payment or a deposit or something like that. This is an after sales or an after like after the initial purchase experience that can really drive retention and loyalty when you're thinking ahead of it. So just thinking about the systems that you have in place in a store to know whether or not you can quickly get people what they need, that's a good matter. What

Paul J Daly  9:29  
a great point. Because, like, one of two things happen will happen when you have, like, money going back where it needs to be right away, you have this idea where it's like, either surprise and delight, right? Or I don't think about it again because it's done, yep, right? And all those little things every time, every time someone has to think about something, it's like, you lost. You lost. You lost.

Kyle Mountsier  9:53  
Yeah, so making that easy painless, it will absolutely change, like that customer. Is a desire to do business with you again. All right? I

Paul J Daly  10:02  
think roll the music. I think that's going to do, right? We're in for a second day of shooting in Lafayette, Indiana, and then we're going to be heading back to you're flying home to Nashville. Ryan, baby Nathan, I are about Syracuse, and we'll be with you bright and early from our little nests in Syracuse in Nashville. Have a great day to go take care of some people. You

Transcribed by https://otter.ai

‍