Interesting. Read on...
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By John McElroy
WardsAuto.com, Mar 24, 2008 11:09 AM
Ever since Bob Lutz landed at General Motors I've been watching the
auto maker make great progress with the products it sells.
Today GM's design, engineering and manufacturing operations are
humming in coordinated unison like they never have before. Even more
impressively, they're doing it on a global basis.
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Meanwhile, across town, Ford is trying to do the same. But it got
started much later and still hasn't turned out products that are as
impressive as GM's. This led me to think that GM was at least one
design cycle, about three years, ahead of Ford as they both struggle
to turn themselves around.
But now I believe that in the last six months or so Ford has edged
ahead of GM. Here's why:
Last year, Ford grew its revenue by a staggering $14 billion. At GM,
income actually dropped. In fact, in total revenue, Ford at $174
billion is catching up to GM at $181 billion. And it's catching up
fast. One more repeat of last year, and Ford actually will be bigger
than GM on a revenue basis, though admittedly this is partly due to GM
selling half of General Motors Acceptance Corp.
Even more impressively, once you get out of North America, Ford is a
solidly profitable company. Last year, it earned nearly $1 billion in
Europe; made more than $1 billion in South America; turned a profit in
Asia/Pacific; put its Premium Automotive Group in the black; and while
down, its financial operations still made more than $1 billion in
profit.
The icing on the cake is Mazda now is making good money and Ford gets
part of those earnings, as well.
All those profits will greatly help Ford fix its North American
operations. No small task, but it is making progress every quarter.
This is especially true in quality, where both Consumer Reports
magazine and J.D. Power are showing a significant surge for the
company - far better than GM.
Meanwhile, in addition to watching its revenue fall, GM lost money in
Europe. Watch for more cuts to come at that troubled operation.
Interestingly, GM made more profit in Brazil last year than it did in
China, even though all the company's propaganda has been touting how
well it's doing in the Middle Kingdom.
On the finance side, GMAC pulled the company deep into the red. What
this all shows is that even when GM fixes its North American
automotive operations, it still has a lot of other work to do.
Personally, I believe GM's design and products are more attractive
than Ford's. And I believe GM is solidly in front when it comes to
product technology.
But when I stand back and look at how well each auto maker is doing
from a business standpoint, there's no question Ford has edged ahead
of GM. Six months ago, I couldn't say that.
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Patrick
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