plus 4, Ford surprises with $1B profit; sees profit in '11 - Denver Post |
- Ford surprises with $1B profit; sees profit in '11 - Denver Post
- Q&A With Eaton CEO Alexander Cutler - Smart Money
- Fast luxury's slow sell - Baltimore Sun
- Text Size - Chicago Tribune
- Add Lightness: BMW signs joint venture to further carbon fiber ... - autoblog
| Ford surprises with $1B profit; sees profit in '11 - Denver Post Posted: 02 Nov 2009 07:27 AM PST   The automaker said Monday earnings were fueled by U.S. market share gains, cost cuts and the Cash for Clunkers program, which drew flocks of buyers to showrooms this summer. Ford's shares rose 68 cents, or 9.8 percent, to $7.68 in morning trading. The latest results signal that Ford's turnaround is on more solid ground. The company lost more than $14.6 billion last year and hasn't posted a full-year profit since 2005. While it made a profit in the second quarter, that was mainly due to debt reductions that cut its interest payments. Ford, based in Dearborn, Mich., reported third-quarter net income of $997 million, or 29 cents per share. Its profit forecast for 2011 was a step above previous guidance of break-even or better for the year. Ford's key North American car and truck division posted a pretax profit of $357 million, the division's first quarter in the black since early 2005. Ford cited higher pricing, lower material costs and increased market share for the improvement. Excluding one-time items, Ford earned 26 cents per share, blowing away analysts' expectations of a loss of 12 cents. The earnings came despite an $800 million revenue drop. But Ford said it cut costs by $1 billion during the quarter, accomplished through layoffs in North America and Europe, reduced pension and retiree health care costs and improvements in productivity and product development. Chief financial officer Lewis Booth said the company took in $1.3 billion more than it spent in the quarter, an improvement over its $1 billion cash burn in the second quarter. "That's a huge deal," Booth said. Ford's plan to create demand and get better prices for its products, coupled with cost cuts, gave the company confidence that it will make money in 2011, Booth said. But Ford still faces obstacles in its turnaround. Last week, workers overwhelmingly rejected an agreement with the United Auto Workers that would have brought Ford's labor costs in line with rivals General Motors Corp. and Chrysler LLC. Workers objected to clauses limiting their right to strike and freezing entry-level wages, and felt the company was healthy enough and didn't need further concessions. The rejected deal also would have changed rules so skilled tradesmen such as electricians and pipefitters work in teams and perform more than one task. Rejection of the deal isn't likely to place Ford at an immediate cost disadvantage to its crosstown rivals because savings from the concessions are longer-term, said Gary Chaison, a professor of labor relations at Clark University in Worcester, Mass. Neither the company nor the UAW has released any cost savings numbers. The third-quarter profit makes it extremely unlikely that the company will push to head back to the bargaining table before the current UAW contract expires in the fall of 2011, and union leaders also are unlikely to take another deal to the membership, Chaison said. "I think the company has no credibility asking for concessions now, and I think the leadership is quite embarrased for making a case for concessions," he said. Chaison said Ford could make some noise about moving new vehicle production to Canada, where unionized workers on Sunday approved a package of concessions, but it's more likely that Ford will live with the current contract until 2011. The other area where Ford has a cost disadvantage is debt. Ford reported $26.9 billion in debt, up $800 million from the second quarter. The company avoided the same fate as rivals Chrysler and GM by mortgaging its factories and even the familiar blue oval logo to borrow $23.5 billion before credit markets froze last year. Ford didn't quantify the impact of Cash for Clunkers, which offered buyers rebates to trade in their vehicles. The program helped Ford cut costly incentives and raise production. It also won buyers; the fuel-efficient Ford Focus sedan and Ford Escape, a small SUV, were among the top five sellers under clunkers. Ford sales climbed 17 percent in August thanks to the program. Ford's revenue fell $800 million for the quarter, to $30.9 billion, due mainly to its financial services arm, Ford Motor Credit, making fewer loans. But the division still posted a pretax profit of $677 million, and revenue from auto operations rose slightly to $27.9 billion. Ford also has benefited from consumer goodwill after it declined government bailout money and didn't go into bankruptcy over the summer as GM and Chrysler did. Ford grabbed sales from its rivals, posting the largest increase in market share of any automaker in September. Ford expects an overall gain in U.S. market share in 2009, a feat it hasn't accomplished since 1995. (This version CORRECTS 5th graf that Ford's North American car and truck division posted the first pretax profit since the first quarter of 2005 sted company's first pretax profit since first quarter of 2005) This content has passed through fivefilters.org. |
| Q&A With Eaton CEO Alexander Cutler - Smart Money Posted: 02 Nov 2009 07:27 AM PST Granted, those numbers aren't pretty. The global economic crisis has been disastrous for even the most flexible manufacturing companies, Eaton included. Earlier this year, the company posted its first quarterly loss in nearly 20 years. Even though sales in the auto and truck divisions are a smaller part of the company, they still lost $102 million in the first half of 2009. Its stock, which fell to $30 in March, has rebounded to around $60—still down 45 percent from its precrash peak. And as well positioned as Eaton seems, the next 12 months may be crucial: While the economy and its effects on Eaton's customers are clearly the most important variables, corporate tax changes and the rising cost of raw materials could hamper the firm's rebound as well. No one, not even Cutler, expects to see the company grow before 2010. This content has passed through fivefilters.org. |
| Fast luxury's slow sell - Baltimore Sun Posted: 02 Nov 2009 05:54 AM PST Local motorists bored with their Mercedes, BMW or Bentley have one place to go around here where someone will listen to such troubles without judgment, without even a snicker. At Maryland's only Maserati dealer, they understand. On York Road in Timonium, of all places, across from Bagel Works and next to Timonium Animal Hospital, Jack Davis, the general manager, and salesman Alfred Ramos hear the stories of men, and even the occasional woman, in pursuit of something ... something ... else. It's not a matter of "need" in the usual sense of the word, as Ramos acknowledged. "No one needs a Maserati," he said. The curvaceous body, the 400-plus horsepower, the lightning-fast transmission, the Italian leather, the breathtaking pickup and braking, the conspicuous prestige - this blend of muscle and luxury is not the stuff of need but of desire. Maserati builds fewer than 8,000 of these cars a year, all by hand, catering to a most exclusive club. "What we're selling is the line of separation" Ramos said. It's for Ramos and Davis to consider the line between those who can afford to join the club and those who can only dream about it. They comprise the entire sales staff and half the employees of Maserati of Baltimore, now in its third year in Baltimore County. One of 52 dealerships in 28 states, according to the company Web site, the store is open - really. This point might escape passers-by peering into the showroom, which often seems to have been abandoned by humans to the stunning presence of Maseratis, Lamborghinis and Ferraris, cars that start at nearly $130,000 new and quickly accelerate. When the place opened in 2007, local reaction was mixed. Some wondered what in the world a Maserati dealership was doing in Baltimore. Others thought such recognition of the county's status was overdue. Some couldn't help but ask: Are you going to make it? More than two years later, Davis does not seem concerned, no matter the recession and the fact that sales are down about 40 percent from 2008, when he said the dealership sold "about 40" new cars, nearly hitting their target. "The store is not going away," he said, seeming unconcerned about the quiet prevailing in the shop. For hours on end on one rainy and cool October weekday, the phones scarcely rang, and the only people to step through the glass doors were delivering something - a mail carrier, a UPS guy, a fellow wheeling in a small load of tires. Davis insisted that business is fine, or as fine as it needs to be in a place where they call it a good month if they sell four new cars. Managers at local Nissan, Lexus and Toyota dealers said their monthly sales quotas are between 100 and 180 new cars. This is Maserati, where Davis said foot traffic scarcely tells the story. To paraphrase F. Scott Fitzgerald: Selling really expensive cars to the very rich is different from selling less pricey ones to you and me. "When someone walks in, I'm not trying to leap on them and try to sell them something," said Davis. He said he'd rather they step into the lounge equipped with blue leather couches, the giant TV tuned to the Speed Channel and the Italian coffee machine dispensing espressos, macchiatos and cappuccinos at the touch of a few buttons. A test drive? Maybe, but probably not right away. "You've got to use discretion," said Ramos, who has been here since the place opened, having previously worked at a high-volume, high-pressure Land Rover/Jaguar dealership in Tysons Corner, Va. "It's not a kiddie ride, to come in and say 'I drove the Maserati.' " Say a guy walks in - and it's almost always a guy - says he'd like to have a look around, poke his head into a Quattroporte, settle into the cockpit of a GranTurismo and get a whiff of that Poltrona Frau leather. The car smells like a large, new wallet. Ramos said he'll ask questions: What kind of cars have you driven? What did you like about them? What did you not like? "Nine times out of 10 that'll flush out the clowns," Ramos said. Davis put it this way: "If somebody's coming in here to scam me on a ride, I'm going to pick that up." They recalled a fellow driving onto the lot a few months ago in an old pickup truck. The conversation went well enough so that the fellow that day test drove a Quattroporte (the four-door) and bought one that week. With one check. More often, it's less colorful than that. Davis and Ramos spend much of their time cultivating sales leads by working the phones and the cocktail circuit, or just showing up at certain restaurants. "You go to where someone is paying $50 for a steak," said Ramos. "Or $80," said Davis. A good prospect might be someone who has "had their third or fourth or fifth Mercedes Benz. They're bored. They want something else," said Davis. One eventual buyer had had his fill of the BMW "7" series. Another prospect of the moment is "bored with his Bentley." Given a name and an appointment for a showroom visit, Davis and Ramos can research the prospect ahead of time, do a little Googling. If things check out, Ramos said, it's time to let the car make the pitch. "You gotta get him in the car. You don't put on the squeeze." This content has passed through fivefilters.org. |
| Posted: 02 Nov 2009 05:40 AM PST |
| Add Lightness: BMW signs joint venture to further carbon fiber ... - autoblog Posted: 02 Nov 2009 05:33 AM PST PRESS RELEASE BMW Group establishes joint venture with SGL Group Munich/Wiesbaden. The BMW Group and the SGL Group have agreed on the establishment of a joint venture for the production of carbon fibres and textile semi-finished products (CFRP) for use in vehicle construction. The total investment volume is € 90 million in the first development phase, the two companies stated on Thursday. The joint venture will be operated through two companies, one based in North America (SGL Automotive Carbon Fibers LLC), and the other in Germany (SGL Automotive Fibers GmbH & Co KG). The BMW Group holds 49% of the shares, and the SGL Group 51%. The two groups will be equally represented in the management of the two companies; major corporate decisions must be made unanimously by both partners. The joint venture will initially create around 180 new jobs in North America and Germany. Its establishment is subject to approval by the cartel authorities. "This joint venture is designed to be a classic win-win situation. We are acquiring pioneering future technologies and raw materials that we need for our Megacity Vehicle on competitive terms. The SGL Group is moving into the automobile business with us as a strong partner", BMW AG Management Board Chairman Norbert Reithofer emphasised in Munich. "With our concepts within project i, we are breaking new ground when it comes to vehicle architecture, lightweight design and the use of materials", Reithofer continued. Robert Koehler, CEO of the SGL Group, stated: "This joint venture with the BMW Group is a milestone for the use of carbon fibres on an industrial scale in the automobile industry. For the first time, carbon fibres are taking on an important role in series vehicle manufacture. This confirms our strategy and shows that carbon fibre technology is becoming increasingly important in the materials substitution process to lighter material. This material will help to reduce CO2 emissions and save our natural resources". Lightweight design has been one of the core skills of the BMW Group for decades – after all, reducing weight is a major factor in cutting fuel consumption. In the use of high-tech Carbon fiber reinforced plastic (CFRP), the company is also able to draw on its many years of experience. CFRP not only plays an important role in motor sports; the material is also used in series vehicles, such as in the roof of the BMW M6 Coupé. In the Megacity Vehicle, which will be launched under a BMW sub-brand in the first half of the next decade, the high-strength yet ultra-light material will make up a significant proportion of the materials used. The combination of the advanced CFRP fibres developed by the SGL Group and the BMW Group's expertise in the industrial manufacture of CFRP components is making it possible, for the first time, to install CFRP on a large scale in a series vehicle at a competitive cost. With the joint venture, the BMW Group is underlining its position as the most sustainable vehicle manufacturer. This claim is reflected throughout the entire value creation chain, from component purchasing to recycling. Producing CFRP in a way that protects resources is therefore a high priority. The high energy requirement for the production of carbon fibres is to be met completely by environmentally friendly hydropower. This is one of the preconditions for the production site of carbon fibres in North America. The raw material is then processed into a carbon fibre fabric at the second location in Germany. Parts and components will then be made from this light-weight durable fabric within the BMW Group. This content has passed through fivefilters.org. |
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