Ford Makes Money! Toyota Overtakes GM – Maybe.
In the first three months of 2007, Ford lost almost $300 million. In the same period this year, Ford turned a $100 million profit. Figure that they’re celebrating in Dearborn.
Meantime, Toyota claims to have beaten General Motors in worldwide sales in the first three months of the year. GM, however, has yawned. In effect, GM says it’s not the horse that’s ahead at the first turn that wins the race. It is the one that’s ahead at the wire. GM is expecting to win for the year.
The Ford money came from foreign operations, as it has in the past. What made the difference, though, was the United States. Ford has done a lot to stem the hemorrhage of money in the United States. So, domestic operations didn’t wipe out the foreign profits. Losses in the States were trimmed to $45 million, from last year’s first quarter loss of $618 million.
This was all done with overall lower revenue than the previous year, and without counting any money from the sale of the Land Rover and Jaguar units.
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Apparently, Ford CEO Mulally has had some better ideas.
Meantime, the global stage was the battleground for Toyota and GM. Last year, Toyota tried to claim the crown as the leader by overproducing cars that they weren’t able to sell, but GM ended up the winner, nonetheless. For some reason, Toyota seems to be bent upon being the biggest producer in the world, though it keeps falling short.
So, it comes as little surprise that it has trumpeted the first quarter results putting it ahead of GM’s worldwide volume.
Toyota’s glee may, however, be short-lived. GM sales broke records everywhere except the United States, where its sales dropped ten percent. That drop in U.S. sales dragged down its overall numbers, even though non-U.S. sales climbed eight percent. Toyota sales for the quarter, at 2.41 million beat GM’s total of 2.25 million.
But, two factors could affect the end of the year totals. What happens to the United States economy could have a huge impact. If it rebounds, GM’s sales are likely to rebound, as well. Also, GM has a number of hybrid models just entering the market, models which may pose some stiffer competition for the older and less glamorous models which Toyota offers in a much more limited model range.
Meantime, however, there is nothing but glee in Dearborn. Cutting the losses in United States operations to the point that they are negligible is a tribute to Bill Ford, Jr.’s decision to abandon the daily management of the company that bears his great-grandfather’s name and bring in outsider Alan Mulally.
Toyota may have another problem on its hands in another year or so, as Ford brings new models to market, too.
No wonder Toyota is celebrating while it can.