Sal Collaziano
08-12-2010, 03:22 PM
How GM and Ford profits compare
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GM might have earned $1.3 billion during the April-June period, but that's half as much as crosstown rival Ford Motor, which may have more than three times as much debt but also has a longer track record as a profitable automaker.
As GM reports continued momentum in its turnaround, it’s important to keep its mind the long, painful roads both took to improve.
Since 2005, Ford and GM closed plants, eliminated or sold brands and reduced dealerships.
While GM restructured with federal assistance, and now has the U.S. Treasury as a 61% owner, Ford took out a $23 billion loan in 2006, giving it the cash cushion necessary to be the only domestic automaker to survive 2009 without filing for bankruptcy.
Now, both are profitable again for the first time since 2007. But Ford is widely regarded as further along in its recovery.
But there are significant differences.
Ford’s management team has been relatively stable since President and CEO Alan Mulally joined in September 2006.
GM, meanwhile, will get its fourth new CEO since March 2009 in September.
“Ford was going though a very rough time a few years ago….and has had some time to get their house in order,” said Rebecca Lindland, director of IHS Automotive. “But GM is catching up quickly.”
Here’s a snapshot of how the Detroit automakers are performing:
Second-Quarter Net Income
GM: $1.3 billion (Year-to-date: $2.5 billion)
Ford: $2.6 billion (Year-to-date: $4.7 billion)
Profitability Track Record
GM: Has reported two consecutive profitable quarters
Ford: Has reported five consecutive profitable quarters
Dealers
GM expects to have 4,500 dealerships by Nov. 1. GM had about 6,049 before its bankruptcy.
Ford, which began the year with 3,550 Ford, Lincoln and Mercury dealers, is in the process of winding down its Mercury division. Many of Ford’s 276 stand-alone Lincoln Mercury dealers will find it difficult to survive without Mercury.
Cash
GM ended the second quarter with $32.5 billion in cash on hand after generating $2.8 billion in cash during the quarter.
Ford ended the same period with $21.9 billion of cash on hand after generating $2.6 billion.
Debt
Excluding pension obligations, GM exited bankruptcy last year with $17 billion in debt and finished the second quarter with $8.16 billion in debt.
Ford reduced its total debt by $7 billion during last quarter, saving $470 million in annual interest payments and reducing its debt to $27.3 billion.
Products
GM has a stable of crossovers, including the GMC Acadia, Buick Enclave and Chevrolet Traverse, that are gaining market share. This year, it’s also launching the heavy duty Chevrolet Silverado pickup, Chevrolet Cruze compact car and the Chevrolet Volt plug-in car.
Ford, meanwhile, is bringing to market a Ford Fiesta subcompact car, an all-new Ford Explorer SUV and an all-new Ford Focus compact car.
Employment
GM and Ford are adding jobs for the first time in years.
GM’s total U.S. employment grew from 77,000 at the end of 2009 to 79,000 as of June 30.
Ford’s North American work force grew to 72,000, up 2,000 from March 31 — the company’s first quarterly employment increase since 2005.
More... (http://www.freep.com/article/20100812/BUSINESS01/100812046/1014/business01)
http://www.fomoconews.com/forums/attachment.php?attachmentid=2651
GM might have earned $1.3 billion during the April-June period, but that's half as much as crosstown rival Ford Motor, which may have more than three times as much debt but also has a longer track record as a profitable automaker.
As GM reports continued momentum in its turnaround, it’s important to keep its mind the long, painful roads both took to improve.
Since 2005, Ford and GM closed plants, eliminated or sold brands and reduced dealerships.
While GM restructured with federal assistance, and now has the U.S. Treasury as a 61% owner, Ford took out a $23 billion loan in 2006, giving it the cash cushion necessary to be the only domestic automaker to survive 2009 without filing for bankruptcy.
Now, both are profitable again for the first time since 2007. But Ford is widely regarded as further along in its recovery.
But there are significant differences.
Ford’s management team has been relatively stable since President and CEO Alan Mulally joined in September 2006.
GM, meanwhile, will get its fourth new CEO since March 2009 in September.
“Ford was going though a very rough time a few years ago….and has had some time to get their house in order,” said Rebecca Lindland, director of IHS Automotive. “But GM is catching up quickly.”
Here’s a snapshot of how the Detroit automakers are performing:
Second-Quarter Net Income
GM: $1.3 billion (Year-to-date: $2.5 billion)
Ford: $2.6 billion (Year-to-date: $4.7 billion)
Profitability Track Record
GM: Has reported two consecutive profitable quarters
Ford: Has reported five consecutive profitable quarters
Dealers
GM expects to have 4,500 dealerships by Nov. 1. GM had about 6,049 before its bankruptcy.
Ford, which began the year with 3,550 Ford, Lincoln and Mercury dealers, is in the process of winding down its Mercury division. Many of Ford’s 276 stand-alone Lincoln Mercury dealers will find it difficult to survive without Mercury.
Cash
GM ended the second quarter with $32.5 billion in cash on hand after generating $2.8 billion in cash during the quarter.
Ford ended the same period with $21.9 billion of cash on hand after generating $2.6 billion.
Debt
Excluding pension obligations, GM exited bankruptcy last year with $17 billion in debt and finished the second quarter with $8.16 billion in debt.
Ford reduced its total debt by $7 billion during last quarter, saving $470 million in annual interest payments and reducing its debt to $27.3 billion.
Products
GM has a stable of crossovers, including the GMC Acadia, Buick Enclave and Chevrolet Traverse, that are gaining market share. This year, it’s also launching the heavy duty Chevrolet Silverado pickup, Chevrolet Cruze compact car and the Chevrolet Volt plug-in car.
Ford, meanwhile, is bringing to market a Ford Fiesta subcompact car, an all-new Ford Explorer SUV and an all-new Ford Focus compact car.
Employment
GM and Ford are adding jobs for the first time in years.
GM’s total U.S. employment grew from 77,000 at the end of 2009 to 79,000 as of June 30.
Ford’s North American work force grew to 72,000, up 2,000 from March 31 — the company’s first quarterly employment increase since 2005.
More... (http://www.freep.com/article/20100812/BUSINESS01/100812046/1014/business01)