Tag Archives: Ford

European losses are sinking U.S. profits for Ford, GM

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Ford Motor Company reported second-quarter earnings that were down nearly 57 percent and warned full-year results would be lower than 2011.

Ford’s North American operations delivered positive news: operating profit rose 5.3 percent to a near-record $2.01 billion with operating margin rose from 9.8 percent to 10.2 percent. However, worldwide automotive sector results were weighed down by Ford’s European operations. Consolidated results show revenue down 6.3 percent to $31.4 billion, pre-tax operating profits down 39.3 percent to 1.382 billion and a drop in operating margin from 7.0 percent to 4.9 percent.

Ford’s Q2 U.S. light vehicle market share fell from 17.3 percent in Q2/2011 to 15.6 percent, while its retail share fell from 14.1 percent to 13.0 percent. Rather than an actual decline in results, the share declines are primarily due to resurgent Japanese sales following the recovery from the disaster-distorted results of the second quarter of 2011.

Ford European sales dropped 17.4 percent in June and market share fell from 8.1 percent to 6.8 percent. For the first six months of 2012, Ford Europe results are down 9.9 percent and losses totaled $404 million in the quarter. Ford, and other automakers operating in the EU are facing a number of challenges due not only to the continuing economic crisis but from very strong, and well-funded, competition for sales from Volkswagen.

Higher costs, lower sales and other factors combined to hurt Ford’s results in every market except North America. In addition to the European deficit, Ford lost $66 million in its Asia-Pacific operations and $163 million in what the company calls “Other;” primarily Ford’s investments in financially troubled Mazda.

Ford’s South America operations were in the black, but only by $5 million.

Growth in the BRIC (Brazil, Russia, India and China) has been tempered in recent months with Chinese trends uncertain and growing volatility in South America.

“The Ford team delivered another solid quarter driven by the strength of Ford North America and Ford Credit,” said Alan Mulally, Ford president and chief executive officer. “We remain absolutely committed to continuing to make progress on our One Ford plan, including dealing decisively with near-term challenges, investing for future growth, and developing outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value.”

The company’s outlook for full year North America 2012 profits remains unchanged. Ford expects significantly higher pre-tax operating profit and margin compared with 2011, with significant sales expected for the the new Fusion launching in the second half of this year.

Ford South America is expected to show a profit in 2012, but it will be “substantially” lower than 2011′s results due to increased competition pressures, weakening currencies, and changes in government policies.

Higher incentives and reduced margins added to Ford Europe’s problems. The company is already dealing with a very unfavorable economic environment that has chopped the available market. Ford now believes it will lose more than a billion dollars in Europe this year.

In Asia Pacific and Africa, strong market factors were pulled down by higher costs associated with new products and investments to support higher volumes and future growth, among other reasons. Ford expects things will improve in the second half of 2012 as the investments begin to produce returns and new products, like the new Focus and Ranger are introduced.

Ford is not the only U.S. automaker having trouble in Europe: After a 61 percent hit to corporate profits due to a loss of more than $250 million in the first quarter, General Motors is playing “musical managers” in hopes of finding someone who can make a go of its money-losing Opel/Vauxhall operation. So far this year, Opel sales are down 15 percent and its market share is down to 6.9 percent, just slightly ahead of Fiat.

Some of the problems are of General Motors’ own devising. It’s still trying to decide in which segments Opel should play: mass market or upscale. In addition, GM has introduced the Chevrolet brand, a move that has been largely successful, but that success has likely come at the cost of Opel sales. Chevrolet sells the Spark, Aveo (our Sonic) Cruze, Camaro, Corvette, Malibu, Captiva, Orlando and Volt in Europe. A number of the Chevy models compete directly with Opel vehicles and some are actually clones. Others are rebadged vehicles from manufacturers like Suzuki.

In addition to too many models, a traditional GM problem, the company has had an overcapacity problem in Europe for several years and has, so far, been unable to arrive at a solution. It was widely expected the General would sell Opel and focus on expanding the Chevrolet and Cadillac franchises, which are already a part of its worldwide strategy. Some analysts still believe GM will ultimately dump the brand it has owned for nearly 90 years.

More bad news for Ford and GM is likely to come from Volkswagen, Europe’s dominant automaker and one of the few to still be making money and reporting growth in European sales. VW, which still has its eyes fixed on becoming the world’s largest automaker, just reported first-half profits of nearly $8 billion on revenues of nearly $117 billion and Volkswagen had a 23.8 percent share of June European sale. VW has its own troubles, most notably Spanish subsidiary SEAT and Swedish truckmaker Scania, but its other brands are churning out profits quite nicely.

With financial troubles even affecting Germany, Europe’s strongest economy, there are currently no signs of improvement for the vehicle market. U.S. sales volumes now exceed those of the entire 27-nation European Union and it looks like American profits will be covering European losses for some time to come.

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Ford ups the ante with new Raptor, Limited pickups

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Ford is introducing the 2013 SVT Raptor and the F-150 Limited, the latest versions of the world’s best-selling pickup.

2013 SVT Raptor: The latest from Dearborn’s Special Vehicle Team features an industry first: forged aluminum conventional wheels that owners can upgrade to beadlocks that mechanically clamp the tire’s bead to the wheel rim for extra security when operating in an off-road environment where low tire pressure is an advantage.

Raptor’s new wheels represent a true innovation because converting from conventional rim to beadlock only requires unbolting the standard outer decorative ring, dismounting the tire from its regular position and then remounting the tire in the lock-enabled position with Ford Racing’s available beadlock ring kit.

It’s the first OEM wheel with both conventional and beadlock-mounting abilities and Ford has filed for a patent on the system.

“Raptor’s exclusive beadlock wheels give the customer the best of both on- and off-road worlds,” said Adam Wirth, SVT chassis engineer. “Tire inflation can be dropped to a very low threshold for maximum traction under extreme conditions, yet holds tight – and stays tight – when returning to the road.”

Raptor buyers also can opt for high-intensity discharge (HID) headlamps that are brighter and whiter than standard lamps and a new earth-tone exterior finish called Terrain. A rear view camera is now available, as well.

The 2013 SVT Raptor is equipped with unique leather and cloth-trimmed seats featuring Raptor-specific bolsters to keep the driver and first-row passenger firmly in place, regardless of terrain conditions. There’s also Ford’s SYNC infotainment system with a new 4.2-inch multifunction LCD screen in the instrument cluster for the MyFord driver connect technology. Customers can upgrade to MyFord Touch with an eight-inch center stack touch screen with five-way controls mounted on the steering wheel.

Ford says year-to-date Raptor sales are up 20 percent compared to the first five months of 2011.

“Ford F-150 SVT Raptor’s popularity continues to grow based on its proven reputation,” said Ford SVT Chief Engineer Jamal Hameedi. “It’s the ultimate high-performance off-road pickup, so it’s critical that we continue to push the boundaries of off-road capability. New available beadlock wheels help to improve Raptor’s performance in soft sand and other challenging conditions, enabling our customers to go further.”

F-150 Limited: This is Ford’s new statement on pickup luxury for 2013. The Limited fulfills the desires of the customers and dealers interested in exclusivity and fine craftsmanship. The new premium model surpasses the Lariat, King Ranch and Platinum.

“The F-150 Limited signifies the highest levels of design refinement, luxury and technology that we’ve ever offered in a Built Ford Tough pickup truck,” said Ford Group Vice President for Product Development, Raj Nair. “The F-150 Limited reflects a growing trend – more and more customers today have high expectations for luxury and convenience, yet their needs call for a truly capable truck.”

Today, more than 30 percent of F-150 sales are from high-end trim levels, with MSRPs reaching almost $50,000.

The 2013 Ford F-150 Limited is offered only in the SuperCrew four-door cab configuration with a monochromatic exterior in Ruby Red Metallic Tinted Clearcoat, Tuxedo Black Metallic or White Platinum Metallic Tri-Coat. The monochromatic theme extends to body-color front and rear bumpers, front bumper valance, sideview mirror caps, wheel-lip molding, upper fascia and grille surround. Contrasting chrome highlights the bold three-bar grille, tie-down hooks lining the cargo box, the single tip of the tuned exhaust and the tow hooks on 4×4 variants. “LIMITED” dimensional lettering accents the box sides.

In addition, the Limited has exclusive 22-inch polished aluminum wheels and center caps and segment-first standard HID headlamps with F-150 insignias.

The interior features red and black full-grain leather-trimmed seats with cooling and heating and memory for the seating preferences for two different drivers. Head restraints are four-way-adjustable and second-row seats are heated, too.

There is aluminum trim on the center panel and console and ambient lighting in five colors to set the mood. A moonroof is standard as is a rear view camera. A power-sliding rear window features privacy tint and defrost functionality.

The Limited package includes MyFord Touch and SYNC and a Sony audio system.

The F-150 Limited has one engine choice: the 3.5-liter Ti-VCT EcoBoost that makes 365 horsepower at 5,000 rpm and 420 lb-ft of torque at 2,500 rpm. Ford says as much as 90 percent of the torque is available from 1,700 rpm to 5,000 rpm. The engine is mated to an electronic six-speed automatic transmission with tow/haul mode. Otehr standard features include a trailer tow package, trailer brake controller, Reverse Sensing System, power-deployable running boards and a 110-volt power inverter.

Deliveries of the new Limited are scheduled for this fall.

Ford honors vets on D-Day anniversary

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Today is the 68th anniversary of D-Day. On June 6, 1944, the Allies landed 160,000 troops on the beaches of northwest France, near Caen. On the day alone, there were 9,000 casualties, the first installment of the price of victory in the Battle of Normandy. By the end of the battle, more than 209,000 soldiers from the United States, Great Britain, Canada and other countries had been killed or wounded, along with uncounted thousands of their German foes. It was the beginning of the long journey to Berlin and the end for the Adolf Hitler and his Nazi empire.

In honor of the anniversary, the Ford Motor Company Fund sponsored two Honor Flights for about 75 World War II veterans from Michigan and Kentucky, flying them to Washington, D.C. to visit the World War II Memorial.

The veterans, all in their late 80s and 90s, and their guardians received a festive airport send-off from Ford employees and others. After arriving in Washington, the vets were greeted by members of Congress and Ford employees at the Memorial, and received letters of appreciation from Ford employees, family members and others.

Among the veterans was 88-year-old Frank Kurtycz of Canton, Michigan, shown above talking with Ford Motor Credit Chairman and CEO Mike Bannister shortly before boarding the Ford Honor Flight to Washington, D.C. After his service in the military, Kurtjcz spent 52 years with Ford.

“The sacrifice and bravery of these soldiers serve as a lesson for all of us,” said Bannister. “It is particularly fitting to acknowledge their service on the anniversary of D-Day, a crucial point in the war that took such a high toll on our troops.”

The Fund also announced a $200,000 grant to the Disabled American Veterans Transportation Network for the purchase of eight vehicles. A total of 164 Ford vehicles are now in the DAV fleet for transporting disabled veterans. This is in addition to $50,000 in grants for DAV’s Winter Sports Clinic and the Jesse Brown Memorial Youth Scholarship Program. The No. 21 Ford Fusion driven by Trevor Bayne at a NASCAR Memorial Day weekend race sported the DAV logo in honor of Ford’s longstanding partnership with DAV, which includes more than $6.5 million in donations since 1996.

“Ford is one of our nation’s great institutions, and for 90 years they’ve honored the brave heroes who have sacrificed for our nation,” said DAV National Adjutant Arthur H. Wilson. “There is something uniquely American about the commitment and loyalty they’ve shown our cause and we’re grateful for our partnership which has made a difference for generations of veterans and their families.”

Ford shows 2013 F-150 first in Texas

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Ford went to pickup country to introduce the 2013 F-150. The presentation took place today in Bruceville, a small Texas town of about 1500 just off Interstate 35 between Temple and Waco. Appropriately enough the event also commemorated the 65 years that Ford has sponsored the National FFA (Future Farmers of America), an 84-year-old youth development organization that’s one of the largest youth organizations in the U.S. and a likely source of many future Ford pickup owners.

Ford has sponsored FFA since 1948, the same year Ford F-Series pickups first went on sale. The Built Ford Tough Scholarship Program, the Ford Fund, and participating Ford dealers have awarded $7.1 million in grants to FFA members over the past 15 years. Ford also sponsors the National Association of Agricultural Educators (NAAE) Lifetime Achievement Awards and an FFA chapter grant program. In 2011, six winning chapters were each awarded a $3,000 grant to support local initiatives.

“Farm families have always represented an important F-Series truck constituency,” said Doug Scott, Ford Truck group marketing manager and FFA sponsor board member. “For these multitasking customers, a Ford pickup means family transportation, economic livelihood, rugged capability and reliability. Like FFA, Ford pickups are an enduring agricultural tradition, and we are delighted to join forces with them to reveal the new F-150 models.”

For 2013, the mildly updated F-150 receives a new front-end treatment and grille and high-intensity discharge (HID) headlamps are now an option. A new Limited luxury model has been added to the line. Three new colors, Blue Jeans Metallic, Kodiak Brown Metallic and Ruby Red Clearcoat Metallic, have been added to the palette and there are new 18- and 20-inch wheels for various trim packages.

Lariat, King Ranch, Platinum and Limited series models come with Ford’s SYNC system and MyFord Touch and new 8-inch LCD color touch screen mounted in the center stack.

Interior upgrades include a new Steel Gray interior on Lariat and a black interior for King Ranch. Both lines also get nicer woodgrain accents. The Platinum trim package now includes a choice of Black or Pecan leather seating.

Engine options remain the same, ranging from a 3.7-liter V6 to a 6.2-liter SOHC V8 that Ford says offers best-in-class towing and payload capacities. We’ll see how those towing claims shape up with SAE’s new J2807 Towing Standard.*

*For more information about the new SAE standard, visit Allpar.com.

Moody’s returns Ford to investment grade

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Moody’s raised its credit rating and outlook on Ford Motor Co. today, returning the automaker to investment grade. Moody’s cited the company’s strength in North America, strong liquidity, and sound financial discipline. The move lifts the rating on Ford’s senior unsecured debt to Baa3 from Ba2. It also raises Ford Motor Credit Co’s credit rating to Baa3 from Ba1. Moody’s also dropped its speculative grade liquidity rating on the company.

“The key factor in our considering an investment-grade rating for Ford was whether or not the company would be able to sustain its strong performance. We concluded that the improvements Ford has made are likely to be lasting,” Moody’s Senior Vice President Brian Clark said. Ford shares slipped one cent Tuesday to $10.19.

The Moody’s upgrade is especially significant as it was the second such move by a major ratings agency and, as such, was the trigger for the release of Ford assets pledged to secure private sector funding when Ford was in danger of filing bankruptcy in 2006. Ford put up essentially all of its domestic assets, including the Blue Oval and the trademarks for the F-150 and Mustang.

In a statement, Bill Ford, Ford’s executive chairman, said: “The Ford Blue Oval is back where it belongs with the Ford family of 166,000 employees around the world. This is a great day for us and is the result of several years of hard work and progress by everyone associated with Ford.

“When we pledged the Ford Blue Oval as part of the loan package, we were not just pledging an asset. We pledged our heritage. The Ford Blue Oval is one of the most recognized symbols in the world, and it is a source of great pride and passion, both inside and outside our company. Getting the Ford Blue Oval back feels amazing, and it is one of the best days that I can remember.”

In 2006, Ford was in the worst financial shape of the Detroit automakers and perilously close to bankruptcy. The silver lining in the cloud was that Ford’s crisis hit before the meltdown of the financial markets. This enabled Ford to mortgage the farm, raising $23.5 billion from the private sector. Of that total $18.5 billion was secured by the Ford assets and $5 billion was unsecured debt.

Last September, Ford completed repayments of all the loans.

Ford has leveraged its disaster into a public relations coup because it didn’t require a bailout from the federal government’s Troubled Asset Relief Program. By the time Chrysler and General Motors faced their own crises two years later, the financial industry in the midst of its own implosion and there was no private-sector money. Many Americans who did not understand the circumstances and were angered by the bailout have embraced Ford and its products in recent years.

“We are so proud of today’s decision by Moody’s and the resulting release of all collateral – particularly the Ford Blue Oval,” said CEO Alan Mulalley. “This is an important milestone and further proof that, by staying laser-focused on our One Ford plan, the Ford team can deliver great products, build a strong business and contribute to a better world even through the most challenging external environment.

“Moving forward, we will continue to focus on driving profitable growth for all of our stakeholders. We are confident that, by staying focused on our plan and working together, we will maintain strong investment grade ratings through all economic cycles.”