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Ford Motor Co. stands to earn an additional $318.6 million in second-quarter profits based on improved operating results at its giant finance arm.

After shocking analysts with nearly $2 billion in first-quarter profits, the automaker Wednesday raised its second-quarter earnings forecast by 15 cents a share, to 45 to 50 cents, from 30 to 35 cents. Full-year earnings are expected to reach $1.65 to $1.75 a share.

The automaker said in a statement that the earnings increase reflects strong performance at its lending arm, Ford Motor Credit, which is benefitting from lower credit losses and favorable interest rates.

Ford Credit repossessed 46,000 vehicles during the first quarter, 13,000 fewer than in the fourth quarter of 2003 and the lowest total since the second quarter of 2002.

The automaker started 2004 with a full-year earnings estimate of $1.20 to $1.30 per share. Ford said last month that its pretax profit for this year was expected to be as high as $3.8 billion.

Wednesday’s announcement was the latest signal that Ford is approaching full stride in its bid to record full-year pre-tax earnings of $7 billion by mid-decade. The earnings target is a cornerstone of Ford’s revitalization plan adopted in 2002 after losses that reached $6.4 billion in 2001 and 2002.

Full Story HERE
 

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You know the more I think about Ford's idea and see it unfold the more I think "this is what has to be done". Forget about market share for now and concentrate on us, more economical,more effient,more productive.
Market share will settle where it is going to settle anyways, and having a profitable company that can go from drawing table to dealerships in under 2 years, Then start building on the momentum.

With the F-150 in place, 500 and Freestyle coming soon (double there midsize product) Mustang,and sure just a refresh on Escapes Super Duty's,and Focus to carry them through. Watching the market to bring what people are looking for. Look at the Mazda 3, maybe this was a test and the 2007 New Focus will be very simular to it.

Keep it up Ford you have made me a believer (only wish I would have put all my money in your stocks at $9.00\
 

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I'm unaware of a company that is considered to have successfully turned itself around while settling for lesser market share.

An example in the auto industry:

Many consider Nissan to have turned itself around. Yes, it still has issues, and there are those who dislike many of its products (I count myself among that group). However, it was losing money and share around the globe as recently as 1999. When Ghosn decided to turn it around, that very much included increased sales, as evidence by its more recent performance in its major markets. Despite aggressiveness in launching new or improved models, Nissan also was able to turn its finances around. Nissan now has the highest after-tax margins of any of the major automakers, and its market capitalization sits consistently in excess of $50 billion dollars (Ford's market cap, by contrast, is in the $25 billion range). Nissan has eliminated longterm debt, too. That is a turn around.

While margins are falling in China, you can bet that GM's price reductions there will translate in the collapse of many of its smaller Chinese rivals. For example, though Geely is content with stealing the Chevrolet Spark design and pawning it on the Chinese for much less, GM's pricing pressure may negate Geely's existence. Problem solved. This will not eliminate all competitors (for sure), but it certainly will weed out the weaker ones.

GM's aggressive marketing is something I definitely favor over a "constriction is success" model. I also have faith in John Devine's financial acumen; he is quite capable of correctly balancing progrowth market share strategies and responsible fiscal policies at GM.
 

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Market growth but at what cost? Figuring all the incentives currently offered on the U-Vans rate support, residual support,free DVD etc. these total$15000 cnd. What is left? How much is to much? Yes they are selling but at the same time prices on used ones are falling.

I could go out today and be the only dealership to sell a new car in this town, to anyone with a tradein. My market share will sky rocket, but my used lot will look like worn out cars at new car prices. There will be a day when I would have to blow them out at what ever price I could get regardless of the losses. Would I be successful? Looking back I probally should have stayed at my normal market share, selling the normal amount of cars and bringing in the normal amount of trades.
 

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I agree with Ford's method in making a profit, however, I find it sort of risky. The loss of market share worries me. I understand why Ford is losing market share, but declining month after month isn't a good trend.

What I do like is that Ford is trying to build a very solid foundation. It is revamping most of its car line-up with better built and higher quality cars. These cars should have been here sooner, but the market will have to wait. I think the Five Hundred and especially the Freestyle should do well. I would think the Mustang would do very well. I think these products coming to market will blow the doors off the cars they are replacing, but will the American consumer notice? That is what worries me and that is what worries me about the continued decline in market share in this country. Once you lose market share, you have to work like a dog to get it back. Will these products take sales away from the competitors? If Ford can move a bunch of these new cars and trucks and at the same time make money, the plan will work. I think laying off the invoices and trying to sell the products on merit is a good idea, but market share will fall in the interm. I see that Ford is thinking long term here. I think it has studied and studied the business side of Toyota and Honda for awhile now.

We should see how Ford is doing this time next year. If the Five Hundred isn't moving, round two in the sedan market will take off - round two being the smaller, sportier "Futura" car. That should give Ford the bump it needs. I am cautiously optimistic on Ford's future. It just needs to get off its butt and get more agressive.
 

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I too am a big fan of Ford new quality-over-quanitiy strategy. There's simple too many competitors in the marketplace and the barriers to entry (e.g. from new developing-market automakers) too low to make any real money on bargain vehicles. Ford, unlike GM, seems to have finally realized they're in the business of making a profit, not making cars, and so long as their margins grow faster a decline in marketshare isn't the end of the world. The old "we make it up on volume" addage simply doesn't hold true anymore.

Anyone can build a good cheap car, but very few (no other?) companies can combine Ford's engineering prowless (they have far more technologies in the bin than anyone, and far more engineers on payroll than even GM) and stable of storied brands (no matter the segment they're already on everyone's shopping list).

I don't think any product is make-or-break for a company Ford's size, but the the F-150 has been a smashing success and proved all the skeptics wrong. The Five Hundred and "Futura" in North America, and the new "Mondeo" and Focus in Europe - all of which are moving signifigantly up-market and down-volume of the cars they replace, are the next big tests.

Of course Mazda, Volvo, and Aston Martin are already doing great, and hopefully they'll be able to turn around Jag' and Lincoln as well...
 

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Ford is taking a risk with their strategy, definately. But it's working thus far. Instead of trying to retain market share on brand loyalty and incentives (what GM has largely been doing) while increasing product quality, Ford is focusing entirely on building better products. They're essentially starting from scratch, rebuilding from the ground up. It may take until the end of the decade for the rest of the world to fully realize the quality and reliability of Ford, but that day will come. And then you'll find that when people who consider a car to be mere transportation, they look at Ford before Toyota. The saying, "Should've bought a Toyota," will be replaced with "Should've bought a Ford."

Maybe it will take longer than 5-6 years for that to happen, but that seems to be the aim of Bill Ford, and this strategy of quality-over-quantity seems like the way to go.
 

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For an example of how a brand can escape the bargain/incentive trap GM need look no further than Subaru. They took the bold step some years ago of offering something unique in the marketplace (full-time AWD on all models, boxers, turbos, etc.) at a fair price: and sales and profits have climbed ever since.

Unfortunately GM has the habbit of doing the exact opposit to everything it touches (see: the ongoing death of Saab). Hopefully GM takes a page from Subaru's book or sels Saab to Ford before it's too late to save...
 

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Originally posted by stewacide@Jun 18 2004, 06:20 AM
For an example of how a brand can escape the bargain/incentive trap GM need look no further than Subaru. They took the bold step some years ago of offering something unique in the marketplace (full-time AWD on all models, boxers, turbos, etc.) at a fair price: and sales and profits have climbed ever since.

Unfortunately GM has the habbit of doing the exact opposit to everything it touches (see: the ongoing death of Saab). Hopefully GM takes a page from Subaru's book or sels Saab to Ford before it's too late to save...
I fail to see how GM is killing Saab. Giving them 2 cars, in which they needed, was probably a great idea in the long run.
If it was Ford, they would be praised for using the full extent of there power to take one car from one side of the world, re-wrap it, and bring it here. As a matter of fact... they do and are doing so now.
The 500, Focus, Freestyle, The Merc 500, the Mazda 6 twins... all the same chassis and everything, yet no one is getting all bunched in the pants about it?

How is a turbo, AWD, hatchback car not a Saab? I can see the SUV argument, but the Saab SUV looks 100x better then anything that the other GM divisions have, inside and out. Yeah, it uses a V8. So does the Porsche and VW. Do people get upset about that? When was the last time we saw a V8 in anything from VW, outside of the 928. How about when was the last time we saw a SUV from VW? Anyone up in arms about that? Its an SUV... people expect to have some power with an SUV. The GMT360 chassis is a great truck chassis. It just needs a few tweeks. GM worked thoes tweeks on the 9-7x.
I cant understand peoples argument about how GM is going to destroy Saab. Saab was dead in the water, and they had 2 choices. Die, or be scooped up by GM. GM is doing the best they can with what they have. Saab needs new cars, and they dont have the time nor the money to start a whole new line up. At least not now. Saab did what was needed to be done. The 9-2x and 9-7x are going to be big for Saab.
Im sure that if GM did nothing, and that they just let Saab die with the little product they have now, that GM would be bashed that they didnt use the Impreza chassis to make a entry level car, or use the many GMT360 chassis to make a SUV.
Lose Lose situation...as usual for GM.

Un-hi-jacked. Now back to your post.
 

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GM seemed to have learned its lessons from Toyota well. That's why it's ahead of Ford and DCX in such critical (and perhaps to some auto enthusiasts, mundane) areas as manufacturing flexibility, productivity, and quality. Advantages in these areas will allow GM to leverage pricing, among other competitive areas. While I'm definitely not for selling cars at a loss, it does allow GM to be more aggressive with pricing (i.e., the lower your fixed costs, the lower you have to set the bar in pricing to make a profit). As far as I see it, Ford has nothing on GM in terms of fixed costs advantages. And it will be several years hence before it does.

I also do not interpret GM's rather high production and incentives solely as a quality over quantity issue. As usual, there is much more to the equation than just market share and great (or bad) looking cars. One frustrating reality that GM faces is its most recent UAW contracts, in which it must pay idle workers. Presently, it seems to make more sense to pay workers to build vehicles that you can move with higher incentives than to pay them and have them sit at home producing nothing. There does seem to be a point, though, when even this strategy fails and it becomes more economical to pay laid off workers (the L-series and its workers comes to mind).

While it's great to wax poetic about about Ford's recent profit coup in the latest quarter, remember that that wasn't solely a result of stronger auto division performance. Like GM, much of the cash was generated by its nonautomotive subsidiaries.

I would LOVE to see a simultaneous resurgence of GM and Ford. In this market, and with some of their competitive disadvantages (that mostly come in the form of enormous health care and retirement pension obligations), it's going to be extremely difficult for GM and Ford to make significant progress.
 

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GM ahead in manufacturing flexability? The 500 and Freestyle are built on the same line and production can be tailored to meet the demand.

I can think of very few lines like this where the finished products are so different.
 

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Originally posted by doh@Jun 18 2004, 01:34 PM
GM ahead in manufacturing flexability? The 500 and Freestyle are built on the same line and production can be tailored to meet the demand.

I can think of very few lines like this where the finished products are so different.
yippie...want a cookie?

Caddy did that with the CTS, SRX, and STS.
Not to mention the Epsilon cars, Theta cars, Delta, or how about the VX/Y cars from Holden?

But hey, Ford did it!! THEY ROCK!! They are the masters at making cars!

But GM...bad GM. How dare you share chassis!! Shame on GM. :rolleyes:
 

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Originally posted by doh@Jun 18 2004, 01:34 PM
GM ahead in manufacturing flexability? The 500 and Freestyle are built on the same line and production can be tailored to meet the demand.

I can think of very few lines like this where the finished products are so different.
Yes, GM is several years ahead of Ford in manufacturing flexibility. One future car line does not put Ford ahead of GM; it merely indicates that Ford is thankfully making progress.
 

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As far as market share think of Caddilac and Volvo and how they are doing when they bring cars to market that customers want! Ford can recapture some share and maybe not all but they will be a profitable growing company pnce again. Fix the problem rather than throwing the money bandaid on it.
 

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perhaps the minivan market is a poor model for the industry, but recent reports show a poor freestar showing, despite a recent overhaul. it doesn't look like ford will have the ground-breaking reception of it's 500 and freestyle that it enjoyed with the taurus back in 1986, as they are very traditional (bland) looking. while ford's overall plan may be working, i am curious to see if their conservative (even by ford standards) designs will fly. and yes, i know the best sellers are dull (camry and accord), but mazda and nissan are doing very well with their more interesting designs. there's not much of a buzz around ford product-wise... i wonder if they can create one when these cars come out. even the new focus face, while freshened, has less edge than before.
 
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