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Ford back to profitability

The Ford Motor Co. is slowly recovering from the effects of relocation of the market for small and economical cars. In the latest quarterly Sales report submitted by the company it was against that Ford reduced the losses. This circumstance is a semaphore that the ailing Detroit automaker has a long way , proceed as noted by Ford CEO Alan Mulally.

Slashed Net loss
In the past, critics, the anticipation of more bad news were surprised by the Ford Motor Company's better-than-expected net – a loss of $ 282 million. The figure has far exceeded the expectations of Wall Street and triggered a rally in gentle company's shares. The image is reflected back and Ford to profitability. "Although our first quarter results are encouraging, we still have a long Way to go, "Mulally said during a conference call. But" the fundamentals of our business are improving. "

The automaker lost for the first quarter of this year was a big improvement compared to the 1.4 billion U.S. dollars, which the company declined during the same period last year. Nevertheless, Ford, the main north – U.S. business posted worse results than last year. The reason behind this is the continuing loss of market share.

In a nutshell Ford's sales were to the world but fell in North America, where the loss expanded to $ 614 million compared to $ 442 million until the year 2006. Nevertheless, it were better for more than $ 500 million expected when the company was. This information was given by the Ford Americas President Mark Fields.

The Ford Credit, which said Mulally remains an important part of the Business, but remained profitable saw earnings decline from $ 248 million to 193 million USD. On the other side of the Atlantic, Ford Europe reported a profit of $ 219 million, an increase of $ 65 million over the previous year. The Premier Automotive Group, consisting of the Aston Martin, Jaguar, Land Rover, Volvo and the best brands with some results. Ford will recover ignition compared to the performance of a Volvo distributor cap.

Where the plan position
According to analysts in the industry, these figures are the first clear indicators, where Mulally turnaround campaign position. When Mulally, the former CEO of Boeing, was set in September by Ford, he said its board of directors that it was too late to have major influence on the results of 2006. He added added, they should begin to judge him the January results.

While it is obvious that the numbers have improved, has pointed out, some analysts about reading too much into it. "Ford admits that, like last year, the first quarter will be the strongest quarter," said Shelly Lombard of Gimme Credit. "We still believe management is the right things, it should be Ford's liquidity sufficient to get them through this change period, and even in a bankruptcy scenario, the bonds are probably worth par. But this is a marathon not a sprint. And there's more pain to come. "

Ford executives they said not to expect that the results of the first quarter will continue to the year. "We face significant adverse headwind for the rest of the year" said the Chief Financial Officer Don Leclair. He pointed unfavorable exchange rates, rising material costs and poor performance in the domestic housing industry that historically translated in the declining demand for pickup trucks.

The transition from a planned
But Mulally said, did not expect the company to achieve the turnaround objectives. "This Transition is not only about the Blue Oval in North America. It is added so that all our operations worldwide, and all of our brands, "Mulally." What you have today was This plan works. Not only that North America through its plan, each has. "

Mulally conveys the positive message with the employees a "city Hall "meeting at the seat of the car manufacturer in Dearborn, in which he recommended for their hard work and reiterated the commitment to return Ford to profitability by 2009.

To cut operating costs 5 billion U.S. dollars
To overcome losses like the $ 12.7 billion posted for 2006, Monster has to Ford reduced to $ 5 billion in operating costs until the end of 2008. The CEO said that the company is on track to do that, thanks in large part to the success of his early Voluntary retirement and is the buy-out programs.

Ford has already reduced total of 11,900 salaried jobs in North America since late 2005. In addition, expected that another 2100 jobs by the end of leave 2007th Approximately 16,500 hourly workers have left North America, the automaker factories since the end of 2005, and the Company expects that as many as 14,200 more by the end of the leave year 2008. This is regardless of the fact that 2000 workers who have signed their buyouts Opinion changed in the last three months.

In addition, employs hourly workers in 5000 of the former Visteon Corp. plants have the company leave. The automaker also indicated its plan to sell or close all of them until the end of 2008, but the company said Thursday, one or two plants can be left open a while to ensure a continuous pass.

More closures expected
As part of its plan for 16 turbines near the end 2012, Ford is also planning to nine factories in the United States and Canada until the end of 2008 and some of which have already been closed at idle. Together, these moves likely to translate into a 26 percent decline in North America production capacity of the company.

However, Ford made the second quarter in North America Production plan of 770,000 to 810,000 vehicles from its earlier forecast. He said the move was necessary to increase supplies and was not expected that the entire year to change the volume of production.

About the Author

Glady Reign is a 32 year old is a consultant for an automotive firm based in Detroit, Mi. she is a native of the motor city and grew up around cars hence her expertise in the automotive field.

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