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North American Sales Lift Ford’s Results

April 24, 2013 by Leave a Comment

Two other big automakers, Daimler and PSA Peugeot Citroën, said that they expected weak sales in Europe to drag down their profits throughout this year.

Ford, the nation’s second-largest automaker after General Motors, said its overall revenue grew 10 percent in the quarter to $35.8 billion, and its market share continued to increase in the United States.

And despite unsettled economic conditions in international markets, the company reiterated forecasts that its full-year profit would at least match its performance in 2012.

“Our strong first-quarter results provide further proof that our One Ford plan continues to deliver,” said Alan R. Mulally, Ford’s chief executive.

Ford said that strong sales in its core North American market propelled the company to its 15th consecutive profitable quarter.

The company’s sales in the United States rose 11 percent in the first three months of this year, compared with a 6 percent increase for the overall industry.

In North America, Ford posted a pretax profit of $2.4 billion, a 14-percent improvement over the same period a year ago. The company said it was the best quarterly performance since it began reporting the region as a separate business unit in 2000.

The company has steadily rebuilt its product lineup in recent years, bringing out new versions of mainstay vehicles like the Explorer sport utility vehicle and expanding production of smaller, more fuel-efficient cars like the Focus.

But Ford, like most other major automakers, continued to struggle overseas in the first quarter.

The company reported a pretax loss of $462 million in Europe — about triple the $149 million it lost in the region in the first quarter of 2012.

Ford has said it expects to lose up to $2 billion this year in Europe, where weak economic conditions have driven new-vehicle sales to their lowest level in decades. The company is closing a major assembly plant in Belgium and accelerating other cost cutting in the region.

Other automakers indicated that troubles in the European economy might depress sales there for some time.

Daimler, the German maker of Mercedes-Benz luxury cars, said Wednesday that it was backing off its profit forecast for this year because of conditions in Europe.

The French carmaker PSA Peugeot Citroën reported that its first-quarter sales dropped 10 percent because of weak demand in Europe. The company said it hoped to start talks with labor unions on wages and working hours in an effort to cut costs and improve competitiveness.

Ford’s chief financial officer, Robert Shanks, said in an interview Wednesday that despite the sustained slide in European sales, there were some “bright spots” in the Continent’s economy.

“We are starting to see some signs that the overall economy may be starting to stabilize,” Mr. Shanks said.

Auto sales in the most troubled markets in Europe — in particular Greece, Italy, Portugal, Ireland and Spain — appear to have hit bottom. “Some of these markets have flat-lined, which is a good thing,” he said. “Before, they were just dropping.”

While Europe continues to drag down Ford’s results, the company is pressing ahead with plans to introduce several new vehicles in the region.

Ford is also coping with a setback in South America, where it reported a pretax loss of $218 million, after earning a profit of $54 million in the first quarter of last year. The company said currency issues in Venezuela and Argentina depressed its results, but that it still expected to break even in the region for the entire year.

Results in Asia, where Ford is investing heavily in new factories and products, improved slightly. The company said it earned a pretax profit of $6 million in the region compared with a $95 million loss a year ago.

One analyst said that Ford’s overall performance showed that its turnaround was sustainable despite steep losses in Europe.

“As a global company, Ford is buffeted by winds affecting each of the world’s major markets,” said Jack Nerad, an analyst with the auto research site Kelley Blue Book. “Most recently the North American market has been on the mend and Ford has been buoyed by this trend.”

Unlike its domestic rivals General Motors and Chrysler, Ford was able to survive the recession without a government bailout and a bankruptcy filing.

In recent years the company has increased the number of models built on global vehicle platforms, which saves money on development costs. Ford is also streamlining production plans to reduce inventories.

Mr. Shanks said that Ford expected the United States car market to continue its recovery this year, with industrywide sales of 15 million to 16 million vehicles. He added that sales of full-size pickups appeared to be gaining momentum because of improved housing starts and other construction activity.

Article source: http://www.nytimes.com/2013/04/25/business/ford-profit-rises-on-strong-north-american-sales.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Ford Chief Benefits From Auto Comeback

March 15, 2013 by Leave a Comment

Ford said on Friday that it paid Alan R. Mulally, the chief executive, about $21 million last year, and paid $14.8 million to its executive chairman, William C. Ford Jr.

Mr. Mulally’s bonuses dropped to $4 million, from $5.4 million in 2011, with a steep drop in his stock awards and other compensation to about $15 million last year, from about $22 million the year before. Those reductions were based on the company’s falling short of overall performance targets, especially cash flow goals.

Despite the decrease, he remains among the highest-paid auto executives in the world, earning at least $20 million for a third consecutive year for his role in streamlining the nation’s second-largest carmaker and returning it to consistent profitability.

Over all, the company earned $5.67 billion in profits last year, a 5 percent drop from 2011 excluding one-time valuation changes.

Its profits were hurt last year by big losses in the troubled European market, but Ford continued to post record pretax profits in its core North American market. The company also was returned to investment grade by ratings agencies, and it reinstated its dividend.

Mr. Mulally, who is 67, was recruited to Ford in 2006 just as the Detroit automakers were tumbling into a financial crisis that would force the company’s two main rivals, General Motors and Chrysler, to seek government bailouts and file for bankruptcy.

Ford survived without federal help and has thrived since, posting pretax profits for 14 consecutive quarters through the end of 2012, while improving revenue and market share.

G.M., the largest American car company, paid Daniel Akerson, its chairman and chief executive, about $11 million last year.

The company has not yet revealed its compensation data for 2012, but last month submitted documents to Congress that said it was proposing to pay Mr. Akerson $11.1 million this year.

G.M. said that figure was the same level as Mr. Akerson received in 2012, making his compensation among the highest for seven bailed-out companies that remain under pay restrictions imposed by the Treasury Department.

Chrysler’s chief executive, Sergio Marchionne, received $1.2 million in compensation in 2012. That does not include his pay as chief executive of Chrysler’s parent company, the Italian automaker Fiat.

The pay levels at G.M. and Ford far exceed what the companies were paying their executives a few years ago, when the automakers were losing billions of dollars, shutting factories and eliminating thousands of hourly and salaried jobs.

In 2005, for example, Mr. Ford, who then served as chief executive and chairman of Ford, agreed to take no compensation until the company became profitable again.

He then recruited Mr. Mulally from the aircraft company Boeing, a move that started Ford’s revival.

Since joining Ford, Mr. Mulally has earned more than $160 million in compensation. He also has been given stock awards totaling about $126 million, according to figures compiled by Bloomberg News Service.

“We believe our 2012 performance clearly shows our management team performed exceedingly well in a difficult environment,” Ford said in a statement.

Mr. Mulally has indicated that he will retire from Ford by 2014. The odds-on choice to succeed him is Mark Fields, who was promoted to chief operating officer in December after leading the company’s Americas division for several years.

Mr. Fields earned about $8.6 million in total compensation from Ford in 2012, a slight increase from the previous year.

The healthy pay packages come as Ford and other automakers anticipate another strong year in the revitalized American car market.

Sales of all new vehicles have risen 8 percent through February, compared with the same period a year ago. The industry is on track to sell more than 15 million new cars and trucks in 2013 — the first time that level has been reached since 2007.

While Ford’s executives are enjoying the rewards of the company’s comeback, so are its workers.

Because of its hefty earnings last year in North America, Ford will pay an average of $8,300 in profit-sharing checks to each of its 45,000 union workers in the United States.

Article source: http://www.nytimes.com/2013/03/16/business/another-lucrative-year-for-car-executives.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

India Ink: At Delhi Auto Expo, Upscale is the New Cheap

January 5, 2012 by Leave a Comment

The EcoSport launched by Ford on Wednesday.Courtesy of FordThe EcoSport, by Ford, will have its debut this week at the Delhi Auto Expo.

Just a few years ago, the buzz word in the Indian auto world was cheap.

Sure, manufacturers had other, nicer, ways to say it (ultra-low-cost, value-driven, thrifty engineering) but the bottom line was this:  In India, car manufacturers were all about making vehicles that cost as little as possible.

As the Delhi Auto Expo revs into high gear this week, though, it’s clear that things have changed. Local and international car makers are rolling out small but brawny sport-utility vehicles and “luxury diesel” editions of sedans with extras like alloy wheels and leather seats.

The Auto Expo, which happens every two years, is expected to attract more than a million visitors this year, including first-time appearances by the Ford Motors chief executive Alan R. Mulally, and Patrick Blain, president of Organisation Internationale des Constructeurs d’Automobiles, the global regulator body.

“The Indian market is maturing, and there is a segment of customer who wants something different, and who can afford it,” said Deepesh Rathore, managing director of India for IHS Automotive, a forecasting and consulting company. Auto sales in India grew about 10 percent in 2011, to about 3.6 million units, Mr. Rathore said, but that growth was tilted to the upper end of the market.

Offerings at the Auto Expo, which opens Thursday, reflect that tilt:

In 2009, Ford introduced the Figo in India, a four-door hatchback that retails now for about 400,000 Indian rupees ($7,568).  On Wednesday in Delhi, Ford held a press conference to show off the next model of the EcoSport, a mini-S.U.V. that has been a best-seller in Brazil, and sold more than 700,000 vehicles in South America. While Ford did not announce the price, it retails in Brazil for about $25,000.

Tata Motors dominated the car show in 2008 with the introduction of the long-awaited Nano, the tiny car with the $2,500 sticker price. The Nano was hailed as the “People’s Car,” but people haven’t rushed to buy it, and Tata has struggled with sluggish sales and production problems. At this week’s show, Tata is expected to show off, among other things, a new edition of its Safari, a bulky S.U.V. with three rows of seats, featuring a wood-paneled dashboard and Bluetooth.

On Thursday, General Motors will introduce the Chevrolet Tavera NEO 3 in New Delhi. The large Tavera 2, already for sale in India, retails for about $13,245, with the sales pitch “Because you deserve more in life.”

Executives pose in front of the newly launched Fiat Linea and Fiat Punto in Delhi on Tuesday.Courtesy of Perfect Relations Pvt. Ltd.Executives pose in front of the newly launched Fiat Linea and Fiat Punto in Delhi on Tuesday.

Already in Delhi this week, Fiat announced a new “luxury diesel” model of the Linea, its four-door sedan, with chrome interiors and leather seats.

Ducati is introducing the Monster 795 in IndiaCourtesy of DucatiDucati is introducing the Monster 795 in India.

Big, heavy and expensive is in on the motorcycle front, too. Italy’s Ducati’s is inviting attendees to view something it calls the company’s “naked audacity,” at the India debut of the Monster 795, a 167-kilogram (368-pound) motorcycle with a 803-cubic-centimeter engine.

Article source: http://india.blogs.nytimes.com/2012/01/04/at-delhi-auto-expo-upscale-is-the-new-cheap/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,