Here’s a new Analogy for y’all:
Ford is to General Motors as The Jeffersons are to Sanford and Son
While Chrysler and GM currently subsist on bridge loans from the government, Ford (F) is Movin’ On Up as their latest quarterly results came in better than expected on multiple fronts…
Ford (F) beat the first-quarter estimates of analysts and reiterated that it remains on track to break even or earn a profit in 2011. The automaker said it lost $1.4 billion, or 60 cents a share. Analysts had estimated a loss of $1.23. Revenue fell 37% to $24.8 billion. Analysts had estimated $22 billion.
Its a sad state of affairs for the automakers when only losing $1.4 bil in a quarter is considered an upside surprise…only in Detroit, kids.
No one is throwing a party yet and 2011 profitability is a ways away. Its also worth noting that Ford always sees it’s next profitable year two or three years out. That said, there some things that relatively-new CEO Alan Mulally has done differently than the folks at Chrysler or GM, including an auspicious earlier money-raise on more favorable terms than can be had now and the responsible shedding of several brands, including Range Rover and Jaguar to the Indians.
They also got serious and stayed serious in terms of cutting debt:
During the quarter, Ford reduced its debt obligations by $10.1 billion and reduced interest payments by more than $500 million.
And they reached agreements with the Unions earlier than their peers, which obviously helps with manufacturing and health care costs.
Why is anyone surprised that Ford is doing better than GM? For starters, they reached outside the auto biz to bring in Mulally from Boeing, where he was CEO of the Commercial Airplanes division. Boeing has a winning culture, a foreign concept for Detroit and in fact, according to some, Mulally was the key guy for the company’s aerospace beatdown of Airbus at the beginning of this century.
GM, by contrast, stuck with Rick Wagoner, a Detroit lifer who even has a last name that evokes an antiquated mode of transportation (coulda been worse – how about Rick Stagecoacher or Rick Charioteer).
Good for you, Ford. Keep cutting debt, putting your foot down with the unions and for Crom‘s sake, make some cars that people want to buy once in a while!
Full Story: Ford Smaller Loss Than Expected (TSC)
Read Also: Top 10 New Models from Detroit for 2010
Full Disclosure: I currently manage accounts that are long GM and F. My commentary above should not be construed as an invitation to buy or sell any securities.