Posts Tagged ‘Big Three’

Ford Posts $6.6 bil Profit for 2010

Workers to share in upturn with $5,00 profit-sharing checks.

by on Jan.28, 2011

Big profits still fall short of analyst expectations.

Ford Motor Co. has posted its biggest profit since 1999 – although the numbers fell more than a billion dollars short of what many had anticipated the automaker would announce.

Ford officials said they earned $6.6 billion in 2010, which will trigger profit-sharing checks for 40,600 U.S. hourly workers of $5,000, more than union members have taken home since 2001, when profit sharing generated payments of $6,700.

“We’ve always said that all our stakeholders will benefit from the growth of the company and improving profitability, and I think this is a specific reflection of that,” said Ford Chief Financial Officer Lewis Booth. “It’s a delight to be paying profit sharing.”

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One reason the maker fell short of analyst expectations was the one-time, $960 million charge it took to cover the cost of paying down debt.  The maker took the prescient step of lining up extensive financing sources as the nation fell into recession.  But it is now racing to pay down those loans and trim its operating costs.  CEO Alan Mulally, in November, authorized paying down another $1.9 billion in outstanding debt.


GM Offering New Round Of Buy-Outs

First since ’09, follows new hirings.

by on Dec.15, 2010

GM may be hiring at some plants - the Chevy Volt line shown here - but it is about to begin a new round of buyouts elsewhere.

General Motors is offering buyouts to approximately 2,000 skilled tradesmen from 14 plants that have closed during the company’s restructuring.

The automaker will pay eligible workers $60,000 to retire with full benefits. Younger workers will have the option to take the $60,000 in exchange for giving up retiree health care and other benefits.

However, many of the skilled tradesman have taken work in auto plants after enduring the ups and downs in the boom and bust of the construction industry. They have already passed up several earlier buyouts and the number of employees interested in accepting the package is uncertain.  But GM is apparently counting on the pressure of impending contract changes that could reduce eligibility for supplemental unemployment benefits.

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The UAW agreed to eliminate the so-called Jobs Bank last year when the company went through bankruptcy. That program essentially provided a check for those idled by a plant closure or other cutbacks until appropriate new work could be found.

If more workers do accept the offer, however, the buyout could add to GM’s unfunded pension liabilities, which GM CEO Dan Akerson recently pegged at $10 billion dollars.


Study: U.S. Aid to Auto Industry Saved 1 Million Jobs

Assistance saved nearly $100 million in personal income.

by on Nov.30, 2010

Government assistance to General Motors and Chrysler enabled orderly bankruptcy proceedings and led to the saving of more than 1.14 million jobs in 2009 alone, according to a recently released study by an automotive think tank.

The study, by the Ann Arbor-based Center for Automotive Research, estimated that an additional 314,400 jobs was saved in 2010. The government help save $96.5 billion in potential personal income losses and allowed $28.6 billion in social security and personal income taxes to be paid to the federal government.

At the time of the bailout, some pundits, and even some lawmakers, suggested that Chrysler and GM didn’t deserve the government’s help. Some even suggested that the bailout was a waste of government money.


Whitacre to Become Permanent GM CEO?

Announcement could come late this morning.

by on Jan.25, 2010

Why is this man smiling? Perhaps because "Big Ed" Whitacre will be named GM's permanent CEO, while retaining his Chairman's post.

It looks like “Big Ed” Whitacre could be around a little longer than he originally anticipated – and in a role neither he nor General Motors had originally planned on.

Well-placed sources echo wire reports that Edward Whitacre, Jr. will be formally named the permanent CEO of GM, this morning.  A briefing is scheduled for this morning, 11:30 AM EST, though for the moment, GM officials will only say that the rushed news conference is to discuss “business activities.”

The former CEO of the telecomm giant SBC, which became AT&T, Whitacre joined GM as its non-executive Chairman, last July, following its emergence from bankruptcy.  The 68-year-old Texan initially declined the offer, made by the White House, which is overseeing the government’s 60% stake in GM.  But Whitacre eventually agreed to what observers thought would be a brief and relatively outside role steering the automaker’s restructuring.

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That changed dramatically, on November 30th, when the Whitacre-led GM Board of Directors ousted former CEO Fritz Henderson.  The Texas-born executive stepped into the role as “Acting” CEO, while a nationwide search was begun.


Buy American?

Survey suggests buyers might be ready to re-embrace Detroit.

by on Sep.03, 2009

Better products, like the new Ford Fusion Hybrid - rather than jingoistic slogans - may be why more motorists now say they're ready to "Buy American."

Better products, like the new Ford Fusion Hybrid - rather than jingoistic slogans - may be why more motorists now say they're ready to "Buy American."

It’s become a tired cliché.  “Buy American,” a phrase trotted out by generations of Detroit executives hoping to win back the motorists who’ve increasingly shifted, over the years, to Asian and European imports.

“Buy America,” proclaimed Lee Iacocca, hoping to head off bankruptcy with 1980’s first automotive bailout.  “Buy America,” crowed his successors, one by one, all the way up to the Cash-for-Clunkers program which, it turned out, sold a lot more Japanese sheet metal than Detroit iron.

But could American buyers really be ready to embrace the concept, once again, and turn to Motown for their transportation needs?

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You're Source for Global Automotive News!

That’s the rather surprising indication of a new survey by the Consumer Reports National Research Center.  In a first-ever survey of motorist intentions, it found that 81% of new-car buyers said they would be likely or very likely consider a Detroit product, compared with just 47% who said the same thing about an Asian model, and 46% who’d similarly consider a European offering.


Ford Earnings Again Surprise Skeptics

Modest operating loss offset by Q2 net profit.

by on Jul.23, 2009

Products like the new F-150 Harley Davidson Edition are driving strong performance for Ford, which surprised skeptics with its second-quarter earnings.

Products like the new F-150 Harley Davidson Edition are driving strong performance for Ford, which surprised skeptics with its second-quarter earnings.

The Ford Motor Co. continued to surprise its critics, this morning, posting only a modest operating loss along with a net profit for the second quarter.

The automaker said it went $424 million into the red on an operating basis, in the second quarter, after excluding special items. However with the special items figured in it posted net income of $2.3 billion, or 69 cents per share.

Including the special items yielded a net gain of $2.8 billion, including a $3.4 billion gain related to debt-reduction actions, the automaker said, in a second quarter financial report released Thursday. “While the business environment remained extremely challenging around the world, we made significant progress on our transformation plan,” said Ford President and CEO Alan Mulally, in a prepared release. Mulally had told reporters, earlier this week, to watch the second quarter financial report carefully.

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Stay on top of the headlines!

“Our underlying business is growing progressively stronger as we introduce great new products that customers want and value, while continuing to aggressively restructure our business and strengthen our balance sheet,” said Mulally.


Q&A: Ford President Mark Fields

The risks and rewards of skipping a federal bailout.

by on Jul.21, 2009

Ford's decision to skip a federal bailout certainly hasn't hurt sales, says the automaker's president, Mark Fields.

Ford's decision to skip a federal bailout certainly hasn't hurt sales, says the automaker's president, Mark Fields.

The U.S. new car market is bound to recover…someday.  But so far, it has defied predictions of a turnaround and continues operating at levels not seen in decades – volumes down nearly 50% from the record sales of the early part of this decade.  Surprisingly few makers have escaped the impact of the slump, though a few have some positive stories to tell.

While Ford, for example, is down overall, its retail share has actually been up a bit, year-over-year.  Why?  Well, there are several possible explanations, including the automaker’s risky decision to reject a federal bailout, even as Washington tossed tens of billions at its cross-town rivals.

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News you need! posed that and several other questions to 49-year-old Mark Fields, Ford’s President of the Americas, during today’s media preview of the automaker’s 2010 product line-up.  Jump to the next page to see what he has to say.


Chrysler Bondholders May Be Ready to Settle

But still more roadblocks could scuttle automaker's rescue plan.

by on Apr.21, 2009

Why is this man smiling? Whether Chrysler survives or fails, CEO Bob Nardelli is not likely to remain at its helm.

Why is this man smiling? Whether Chrysler survives or fails, CEO Bob Nardelli -- shown here with a picture of legendary CEO Lee Iacocca -- is not likely to remain at its helm.

One of the most pressing obstacles in the way of a Chrysler rescue plan could be resolved, according to reports circulating in Detroit circles.  If accurate, the automaker’s lenders will be willing to swap $2.5 billion of its $6.9 billion in secured debt for equity in a new company that would be formed by a proposed partnership between Chrysler LLC and the Italian carmaker Fiat SpA.

First reported in the Detroit Free Press, various sources now indicate the leaders of a group representing Chrysler’s bondholders made the counter-offer to Chrysler and the U.S. Treasury Department on Monday night.  The debt holders had previously rejected a plan to take $1 billion in cash to wipe out Chrysler’s debt.  Treasury officials overseeing the automaker’s rescue plan had been hoping to ultimately eliminate two-thirds of Chrysler’s debt.

A senior Chrysler spokesperson declined comment, Tuesday evening.  There’s also been no word from the Treasury Department.


A Republican Who Likes Detroit?

California governor backs federal aid for automakers.

by on Apr.20, 2009

The "Governator" declares Detroit "will be back" during appearance at 2009 SAE World Congress, in Detroit.  Photo Credit: Len Katz

The "Governator" declares Detroit "will be back" during an appearance at the 2009 SAE World Congress in Detroit. Photo Credit: Len Katz

California governor Arnold Schwarzenegger opened the annual Society of Automotive Engineers World Congress in Detroit on Monday morning with a rousing endorsement of the American car industry.

Schwarzenegger, who has been a frequent critic of Detroit’s carmakers over the years, also stressed the federal government should definitely step in to help the American carmakers. He also offered to do a commercial, for free, touting American carmakers once they are on the road to recovery.

“Detroit is going to be back and Detroit is a leading force in the car industry and worldwide,” Schwarzenegger said as he opened the SAE’s annual convention in Detroit.

“Right now, they are going through some painful times. For anyone who says, ‘Leave them here, don’t help them’ is a huge amount of nonsense talk because of the fact of the matter is we all need to help Detroit,” he said.

“The government should provide money to help the automakers in research and development, but it also can no longer can keep changing their policies,” Schwarzenegger said. “We need a vision for energy, a vision for our cars, a vision for greenhouse gases and a vision for tailpipe emissions. In all this time we have not had those visions.”

“I do want to help the auto industry get back on its feet and I do want to do my share,” said Schwarzenegger, who said he was a fan of Detroit’s carmakers. He believes carmakers can overcome their current difficulties, adding that he most definitely favored the decision to offer Detroit financial assistance.

However, the governor also reserved the right to criticize the carmakers – which he has done repeatedly, including some harsh comments made just last weekend.  Much of his criticism has concerned the need for speeding up the move towards green technology, and during his Detroit appearance, Schwarzenegger said he was delighted to see automakers move toward developing new alternative technologies, including battery-electric vehicles, hydrogen-fueled cars and hybrids. “They’re really not that far behind,” he said. (more…)

Is GM Restructuring Gridlocked?

Though some movement, key union, debt issues remain snags

by on Apr.17, 2009


"The clock is ticking," said GM CEO Fritz Henderson, but efforts to craft a "faster...deeper" viability plan may be running into gridlock.

With “the clock ticking,” General Motors Corp.’s efforts to “go faster and go deeper” with a revised restructuring plan may be facing gridlock that could push the automaker into bankruptcy.

During a call-in news conference, Friday, GM CEO Fritz Henderson offered a status update on the troubled automaker’s desperate race for survival.  In a bluntly candid tone, the new chief executive made it clear that time is running out for GM, which President Barack Obama gave until June 1st to fix its survival plan if it is to get additional federal aid.

Even if the company does meet its deadline, Henderson confirmed, there will be further plant closings and significant additional job cuts.

“Our preference is still to try to accomplish this outside the bankruptcy process,” said Henderson, in a call-in discussion that drew so many participants many journalists were unable to access the news conference.  “But the clock is ticking.  We have to be ready in case we do have to go through the bankruptcy process.”

There are a variety of issues that appear to be stalling GM’s effort to provide the White House with a convincing plan for recovery.  The two key issues involve the United Autoworkers Union, which is being asked to reduce the amount of cash needed for its VEBA health car fund in return for GM stock, and corporate bondholders who are being asked to trade much of their debt for equity.

The UAW, Henderson noted, is currently focusing its attention on negotiations with Detroit’s other failing automaker, Chrysler LLC.  That maker was given only until the end of April to revise its viability plan – and pull off a strategic alliance with Fiat SpA.

Considering the timetable facing Chrysler, Henderson said, “I would expect (GM) could pick up the pace in the next couple weeks.”

The situation with bondholders appears less certain.  Industry insiders contend the various banks and other parties holding GM debt are pushing towards the 11th hour in the hope of gaining maximum value.  Some may even see the opportunity to get their debt covered – with a higher return – in the event of a GM bankruptcy.


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