Ford trims third quarter losses, developing strategic plan for Volvo
11/08/2007, 3:20 PM
By Drew Johnson
Ford reported its third quarter financial results today, posting a net loss of $380 million. Despite being in the red, the results were vastly improved over the automaker’s $5.2 billion loss during the same period last year. General Motors reported a loss of nearly $40 billion yesterday, due to a one time cash charge involving tax credits.
Third quarter results
Revenue during the third quarter increased to $41.1 billion, up from $37.1 billion the previous year. “The increase primarily reflected higher net pricing, changes in currency exchange rates, and improved product mix,” Ford said in a statement.
Ford’s global vehicle sales were up — growing from 1,467,000 units to 1,487,000 — but its North American division still posted a pretax loss. Third quarter North American pretax losses totaled $1.0 billion, although that represents an improvement over last year’s $2.1 billion loss.
“Our third quarter performance is very encouraging,” said Ford CEO Alan Mulally. “We can see our plan taking hold with significant improvement continuing in our core automotive operations. We remain committed to executing the four priorities of our plan – restructuring the business to operate profitably, accelerating the development of new products that our customers want and value, funding our plan and improving our balance sheet, and working even more effectively together as one Ford team, leveraging our global assets.”
Future of Volvo
Ford also announced that it was developing a strategic plan for Volvo in its third quarter earnings report. The document failed to address the long-term plan for Volvo, but indicated that Ford would hold onto the Swedish brand in the interim.
“Our plan now is not to sell Volvo but to improve its cost structure and brand positioning. I think we can do substantially better than where we are today,” said Ford CEO Alan Mulally. Mulally also said that Ford would “continue to review its brand portfolio,” suggesting that the sale of Volvo is still a possibility.
According to Automotive News, the turnaround of Volvo includes:
* Better positioning of the Volvo brand as a global premium vehicle
* Better separation between Ford and Volvo, allowing Volvo to operate more independently
* Streamlining product development and purchasing between Ford and Volvo
* Disclosing Volvo’s financial results beginning in 2008
“The most important thing we can do in the near-term is improve the cost structure, so that’s what we’re going to focus on,” Mulally said.
Although Ford said that it had no plans to sell Volvo anytime soon, it does sound like it is prepping the brand for a future sale. Volvo reportedly lost more that $100 million in the third quarter, a figure that Ford would like to see wiped from its financial statements. The part about separating Ford from Volvo in order to allow Volvo to operate more independently seems like a dead give away that Ford is already preparing to operate without its lone premium global brand.
11/08, 3:31 PM
posted by:
autonut
Ford would do great favor consumers and Volvo customers by staying away from its affairs and just collecting its coins. After building Ford AND Mazda fleet based on Volvo architecture and including Volvo engines into most of its European offering separation between two is a mute point. How it will be achieved: stop Ford vehicle production or Volvo?
11/08, 3:47 PM
posted by:
Ray Sinclair
Ford is still around? cool, I guess.
11/08, 4:08 PM
posted by:
richt62167
OH MY GOD!!! I just saw the new Euro Ford Focus in Auto Express Weekley. U.S. Fords SUCK!!!!!!
11/08, 4:19 PM
posted by:
angelo
Volvo/Mazda have an interesting synergy. I look forward to BMW owning Volvo someday.
11/08, 4:22 PM
posted by:
R1GHT30U5
“The increase primarily reflected higher net pricing, changes in currency exchange rates, and improved product mix,”
Improved product mix? HAHAHAHAHAHAHAHAHAHAHAHA!
11/08, 4:53 PM
posted by:
mujician
Actually it is vastly improved, ****in gramar…click click &^%@!%$R*(#$ got to()*^#@* fix*&.
11/08, 7:05 PM
posted by:
mazdaman
If you read between the lines and add in a little speculation, it appears as though Volvo is eventually on its way out the door behind Aston Martin, Jaguar, and Land Rover.
I personally hate to see Volvo go. They brought a lot of technology/engineering/platforms to the table as a member of the Ford Corporation. Too bad they didn’t bring profits. I do hope that a decent company acquires Volvo if it does get dumped by Ford.
11/08, 8:56 PM
posted by:
S-60-driver
Volvo isnt going anywhere….. its way too integrated with other Ford vehicles. Gonna take forever to get out of the volvo platforms/safety technologies/etc and create its own platforms and etc for Ford.
.
Improved product mix….. yeah, duhh, peeps!! See new Taurus/X, Sable, Escape, and Mariner? Hey, Fusion, Edge, MKX, Milan and MKZ are still selling strong.
The new Focus that just came out, may help Ford a little for the fourth quarter. I’ve seen them everywhere now!!
11/08, 9:09 PM
posted by:
lucklaster
Ford – you have some good prods in a few catagories now bring or build some cool cars – now!
11/08, 9:16 PM
posted by:
global_lightning
I’ve said it before and I’ll say it again:
Develop a new, dedicated chassis and advanced powertrains for Lincoln (for the traditional USDM) and Volvo (ROW and US). After two years, let Ford, Mercury and Mazda build their own versions. Two years later, new offerings from Lincoln/Volvo… Rinse, lather, repeat.
11/08, 10:28 PM
posted by:
Robert
I guarantee that everyone on this board knows less about the business challenges at Ford than the Ford leadership team. But your Euro cars are coming starting in 2009. The rest of the population has no idea.
11/09, 10:47 AM
posted by:
planet_drive
Isn’t it just sad that any topic about Ford is always negative. Never in my life would I buy a Ford and more and more people are feeling the same way. Ford today is the worst automaker on this planet and buying a new Ford from such a company will only spell trouble and big financial costs for its owners. Ford is sinking and its best to shoot a few more holes into that ship so it can drop like a rock and be done with.
11/09, 10:49 AM
posted by:
autonut
No need to waste ammo. The management is quite capable of sinking this ship by itself
11/09, 1:31 PM
posted by:
jackjimturkey
Ford should keep Volvo
11/09, 2:16 PM
posted by:
johnnycanuck
If they off Volvo, what’s left to sell to stem the bleeding next time. Dear Ford: your running out of options, boys. Time to **** or get off the pot.
11/09, 6:25 PM
posted by:
jayjc08
Hmm… It seems like not to long ago, Volvo was making profit. Now, it may just be a figment of my imagination, wishful thinking, but Ford has done alot of good for Volvo. With the C30, the modestly redesigned Volvo range and it’s new look, I think it’s actually becoming quite attractive from the boxy, function over form look.
The Volvo XC60 would be a great place to start. Make it an example for Volvo to take note on, produce it in small numbers, only enough to undercut demand, and maybe if the XC-90 isn’t doing so well, substitute the XC-60 (I’ve looked it up a couple of times, but usually when looking for “sales expectations” or “supply and demand” it comes up with malicious advertisements… so, I bring the question, is it doing well?).
It’s opinion whether or not Ford is the best brand out there, but from my experience Ford has been very reliable and capable. I’ve owned Ford all my life, a 90′ Ford Taurus and 96′ F-150 and been happy with both, no major problems with either but I should have made a smarter choice and bought the F-150 out of NY state (rust). And looking at Fords current products, it’s still reliable and down to the point. To me, Ford embodies what American manufacturers at once were about; reliability and capability to go anywhere without having to worry about the plastics being scratched, or the engine failing.
It remains opinion, but Ford has done a great job with Volvo, Jaguar, Land Rover, Mazda and Aston Martin. It’s long ignored it’s American brands though, and to me has lost much of it’s dignity as an American automanufacturer by depleting Mercury and Lincoln to meager trim lines.
11/09, 6:26 PM
posted by:
jayjc08
*let me clear something…
Hmm… It seems like not to long ago, Volvo was making profit. Now, it may just be a figment of my imagination, wishful thinking, but *I had thought Volvo was doing great.* Ford has done alot of good for Volvo.
11/09, 6:28 PM
posted by:
jayjc08
Oh yes…
So DeansterTJ, if you know so much about Ford leadership, then tell me a little bit about they have been maximizing profits, without jabbering about cutting jobs- the painfully obvious.
11/09, 8:17 PM
posted by:
jackjimturkey
jajjc: I like the C30