Ford impressive, but sobering path ahead

BY TOM WALSH • FREE PRESS COLUMNIST • July 23, 2009

DETROIT (Dow Jones)--Ford Motor Co. (F) returned to profitability in its second-quarter and slowed its cash burn amid speculation that it may issue more equity to reduce its debt.
The auto maker reported a net income of $2.3 billion or 69 cents a share, compared with a loss of $8.67 billion, or $3.89 a share for the same period a year earlier.
The company burned through about $1 billion in cash - down from $3.7 billion in the first quarter - during the quarter as it controlled incentive spending around the world while increasing output in its North American plants.
Chief Financial Officer Lewis Booth said all of the company's divisions are now focused on preserving cash, and new product introductions have allowed the auto maker to sell vehicles at higher pricing without resorting to incentives.
Ford's profit came largely from a $3.4 billion gain it received related to debt-restructuring actions in April. Excluding the one-time gains, the company would have narrowed its quarterly loss to $424 million compared with a loss of $1.03 billion a year earlier. It would have been the company's fifth consecutive quarterly loss.
The results split analysts' reaction. Bank Of America analyst John Murphy rated the stock as a "buy" and credited Chief Executive Alan Mulally with putting the company in a "strong position relative to its competition."

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7/22/09

Toyota Says It's No Longer Profitable in North America
Toyota's top executive in the United States said Monday the company is no longer profitable in North America and that the company is reviewing its entire operation here.
Yoshimi Inaba said profitability remains a concern despite cost cutting in the organization, but he said he hopes the company could be profitable in its next fiscal year in North America, reports The Detroit News.  Inaba, who is president and chief operating officer of Toyota Motor America and chairman and CEO of Toyota Motor Sales USA, is taking up his responsibilities at a crucial time for the Japanese automaker.
Toyota's sales have fallen 38 percent in the first six months of the year -- to 770,000 cars and trucks from nearly 1.25 million vehicles in the first six months of 2008. U.S. industry auto sales fell 35 percent in the first half of the year.
Among the issues the company is considering in its re-evaluation process is whether to keep open the 25-year-old New United Motor Manufacturing Inc. assembly plant in Fremont, Calif, site of a former joint venture with GM.
The company also is contemplating what to do with its Mississippi plant. Toyota has completed the structure, but not moved equipment into it or given a date it might open because of the sharp decline in auto sales. It was scheduled to open next year. Toyota has said it may build the Prius in Mississippi, but Inaba said those plans are unclear.
Inaba acknowledged that Toyota vehicles had often lacked "passion" and that the company's vehicles must be "more exciting, more nimble."
"Toyota is a good car but not exciting. Those are the comments we usually (or) always get," Inaba said.  

Mon Jun 8, 2009 12:57pm EDT

DETROIT (Reuters) - General Motors Corp, which filed for bankruptcy protection a week ago, said on Monday that it would cease production of medium-duty trucks by July 31 after attempts to sell the operation failed.

"After four years of working with multiple potential buyers, General Motors has decided to wind down its medium-duty truck operations," the automaker said in a statement.

GM plans to cease production of Chevrolet Kodiak and GMC Topkick medium-duty trucks by July 31. The automaker sold about 20,000 of the vehicles last year, down from roughly 30,000 in 2007, as the U.S. economy sank into a deep recession.

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