Both Ford and G.M. are saddled with these legacy costs that they're negotiating with the union. Beyond that, there isn't much they can do but continue to attack their single largest cost: purchased materials.
I think the effect has already been felt on Ford's earnings because Ford and the other automakers book themselves in profits when they produce and ship the cars to the dealers,
If I wanted to sleep at night I'd own GM, but I think Ford has a higher percentage chance of bouncing back.
The fleet sales that inflated the January results will probably diminish for GM, Ford and Chrysler. There's three reasons why their market-share has declined: product, product and product.
It's more trouble for the suppliers. Partly, it's a reflection of the fact that Ford and GM are shrinking to reckon with lower market share. And so there's less business to go around for the suppliers.
Detroit was an island surrounded by prosperity this year. The big SUV sales collapsed and did a number on their profitability. Both GM and Ford will lose a little market share in 2006, but not at the rate of 2005.
It's well-executed. It's expensive, but they can afford it.
Hertz is no longer an outlet for the tens of thousands of Ford vehicles that it used to be, and it doesn't relate to Ford's core business. I don't think the absence of Hertz will hurt Ford overall.
Hertz has become less and less important as an outlet for Ford cars as Ford has pared back sales to Hertz and other daily rental companies. It's really a noncore business right now.
You have to admire them. Even with $4,000 in incentives, they're still making money...You compare that with how GM and Ford are doing in North America, and you have to give them a medal.
I think the losses at Ford and GM are at their maximum right now. If I'm right, and it becomes clear the losses are shrinking, the stocks may act a little better. But I'm not convinced enough right now to buy them myself.
Padilla is a very able (executive), but he is also the old guard. Padilla is out because Ford wants his own people. That's my view.
They've got some interesting new stuff coming out. They're going to continue to do better than GM and Ford in North America, but I think there'll be a squeeze on their earnings.
Ford would welcome the cash for liquidity purposes, to help provide for large unfunded pension liabilities and for research and development.
Ford is in the intolerable position of having too many plants and too many people, ... Cost cutting needs to come before the end of the year -- layoffs, plant closings, that sort of ugly stuff.