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Old 01-08-2003, 08:01   #1 (permalink)
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Confident Ford moves closer to recovery

Still, analysts say automaker will have tough year ahead

Wednesday, January 8, 2003
By Mark Truby / The Detroit News
John T. Greilick / The Detroit News

DETROIT -- Ford Motor Co. Chairman and CEO Bill Ford put on a brave face last January at the Detroit auto show and promised better times ahead, even as the automaker faced layoffs, plant closings and a $5.45 billion loss for 2001.

"When I talked to you last year, you probably detected a faint gleam of panic in my eyes," Bill Ford said. "If you didn't, then you weren't looking very hard."

It's now a year later. And while no one is breathing easy at Ford's Glass House headquarters in Dearborn, a guarded optimism has replaced the sense of panic.

Ford's financial results for 2002 won't be announced until Jan. 21, but it is expected to report a modest profit. And, for the first time, Ford's promise of a product renaissance appears credible.

Aided by a live band, smoke machines and pyrotechnics, Ford made a splash showing off its future cars and trucks to thousands of journalists this week at the North American International Auto Show. The next-generation Mustang coupe and F-150 pickup, both crucial to Ford revival, were well received.

"There is a sense of confidence now," Bill Ford said.

It's still far too early to declare Ford's comeback plan a success. Ford's stock fell 41 percent last year and the spread on its corporate bonds has taken a beating primarily because Wall Street remains skeptical about the turnaround plan, which calls for five plant closings in North America and 21,000 job cuts.

"We are starting to see the signs of a recovery," said Scott Hill of Sanford Bernstein and Co. "They have worked very hard. But they have some serious profit problems and cost problems that won't be easy to work out."

Competition is increasing and the core U.S. auto market is expected to slow down this year. Industrywide, Ford is forecasting U.S. light vehicles sales of 16.2 million cars, down from 16.8 million last year.

"Bill inherited a terrible situation. There's no question about it," said Peter Pestillo, chairman of auto parts maker Visteon Corp., and a confidante of Bill Ford. "I think Ford did a good job last year, but this year is going to be tough."

Ford's executives from around the world meet today in Dearborn to hammer out strategies to sustain the momentum. Bill Ford plans to exhort his top managers to intensify their cost cutting efforts and crack down on underperforming areas of the company.

"Everything is on probation," Bill Ford said. "There's nothing sacred here. No part of the company has a free pass."

Ford will no longer allow any regional operation, brand or even model line to post losses year after year, said Chief Operating Officer Nick Scheele. In recent years, laggards within Ford were given a free pass because Ford's North American truck and SUV business was so profitable.

"We can't carry passengers anymore," Scheele said. "We have to get every part of the business contributing and in the black."

The company will detail its goals for 2003 Friday in a meeting with financial analysts. In interviews with The Detroit News this week, Ford's top executives outlined some of the expectations for the coming year.

* The company intends to improve upon last year's financial performance, but it "will be a challenge," said Jim Padilla, executive vice president in charge of North America. Ford is expected to post profits equal to 40 cents a share -- about $750 million -- for 2002, analysts estimate.

* The Premier Automotive Group -- Land Rover, Jaguar, Aston Martin and Volvo -- will make money this year, with Jaguar rebounding from a dismal year in which it lost about $500 million, said David Thursfield, executive vice president in charge of purchasing and international operations.

* The company's high-volume Ford brand plans to claim about 18 percent of the U.S. auto market this year, slightly up from 17.8 percent in 2002, Ford division president Steve Lyons said. Lincoln Mercury aims to hold onto the 2.5 percent of U.S. market share it claimed in 2002.

* Ford expects to improve its performance on the J.D. Power and Associates initial quality survey by about 10 percent this year. Improved quality last year helped the company reduce warranty expenses by 12 percent, Padilla said.

"Our goal is to accelerate all of our efforts," said Padilla.

Stringing together two consecutive years of profits and improved quality would be a significant accomplishment considering the dismal shape Ford was in a year ago, shortly after Bill Ford fired Jacques Nasser and took over as CEO.

In his nearly three years as CEO, Nasser thrust massive change on Ford to transform the old-line industrial company into a nimble, diversified consumer company. Many of the efforts backfired and employee morale suffered.

"Jacques ... left a failed laboratory for social change," Pestillo said in an interview this week. "By the time Bill got there, it wasn't a car company. Too many people were miscast in their jobs. Bill started in a hole."

One of the first challenges was convincing Ford employees how much trouble the company was in.

"They did not accept that the wheels had fallen off," Scheele said.

Bill Ford's new management team took time to gel. Top executives were initially wary of each other.

"There were meetings where there was no conversation," Bill Ford said. "It would be silent."

At a Monday night dinner with reporters at the company's former Piquette Road plant -- once home to the Model T -- in Detroit, Bill Ford said he was relieved the tumultuous year is over.

"Now, I really feel happy with the rhythm we're in," he said. "There's a lot less infighting and jockeying for position. We have really come a long way."

(Photo)Ford Motor Chairman Bill Ford introduces the next-generation Mustang. The auto company is optimistic about sales this year with the expectation of a modest profit in 2002.
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My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

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Old 01-08-2003, 08:04   #2 (permalink)
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The graph .......
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My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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Old 01-08-2003, 09:23   #3 (permalink)
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2003 to test Big 3

Industry is faced with humdrum economy, threat of war, consumers used to 0% deals

By Mike Hudson / The Detroit News

DETROIT -- Auto analysts warn the Big Three need a near-perfect year of political, economic and domestic news to keep sales high in 2003.

After a year of incentive-induced auto sales, the average American auto consumer stands in a historically uncomfortable, debt-laden position. Since late 2000, in fact, consumer spending has been the only force keeping the U.S. economy out of a serious downturn, economists say.

Looming war, rising oil prices and minimal creation of jobs quickly could push car buying to the bottom of consumer priorities, analysts said at the Society of Automotive Analysts outlook forum held at the Marriott hotel in the Renaissance Center on Tuesday.

"The consumer is not really in particularly good shape going forward and the need to buy new cars is low," said Gary Lapidus, auto analyst at Goldman Sachs in New York.

However, economists for the automakers rebuked analysts' mantra on the fundamental weakness of consumers, citing new-found wealth that was created during the housing boom and subsequent refinancing sweep of 2002. Ellen Hughes-Cromwick, director of corporate economics at Ford Motor Co., also pointed to an aging vehicle population in North America as a positive for 2003 sales.

But even the corporate economists couldn't dismiss the potential effects of war and energy prices on sales in the coming year.

As a result, DaimlerChrysler AG is making its 2003 forecast fluid by basing it on Iraq, oil prices and economic growth. The automaker predicts that if there is a quick resolution in Iraq, a strong economy and $25-per-barrel oil prices then the company will sell more than 17.5 million vehicles in North America.

However, if there is a long, bloody conflict in Iraq or if consumers become frightened and and oil prices shoot to $40 per barrel, the company expects less than 15 million unit sales.

And the worldwide situation isn't any brighter, said General Motors Corp. chief economist G. Mustafa Mohatarem. He said sales will likely fail to grow significantly in markets across the globe next year, with exceptions in Canada and China.

"The only (auto market) in the world that is growing is America," Mohatarem said.

Prior to the 1991 United Auto Worker contract, analysts say, the Big Three could have simply dealt with the uncertainty by expecting low sales and shutting down plants. But now, with a moratorium on plant closures and income security measures in place, the domestic automakers must keep volume up to help spread the costs of its labor out.

"This need to drive their capacity is driving prices down," said David Leiker, senior automotive analyst at Robert W. Baird & Co., Inc. in Milwaukee. "We don't think the domestic (automakers) have attractive business models."
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My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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Old 01-10-2003, 21:16   #4 (permalink)
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Ford sees 2003 net income of 70 cents per share

Reuters / January 10, 2003

DETROIT - Ford Motor Co. said on Friday it was expecting 2003 net income of about 70 cents a share, well above analysts' consensus estimates.

Ford CFO Allan Gilmour said the company was on track with its cost-cutting plan, that its automotive unit would have breakeven results in 2003 and that Ford's credit arm would pay dividends to the parent company.

Based on those factors, "we expect our net income for the full year to be approximately 70 cents a share," Gilmour said in a meeting with analysts.

The average of analysts' estimates for Ford in 2003 is 46 cents a share, according to Thomson First Call.
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My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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Old 01-11-2003, 08:10   #5 (permalink)
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Saturday, January 11, 2003

Ford says turnaround on track
Company expects modest profit for 2002, improved market share in 2003

By John Porretto / AP Auto Writer

DETROIT -- Ford Motor Co. chairman Bill Ford pronounced his company's turnaround on track after one year Friday, but he acknowledged that increasing competition and economic uncertainties pose challenges for meeting future financial goals.

The world's No. 2 automaker expects to post a modest profit in 2002 after losing nearly $5.5 billion a year earlier.

The company also forecasts earnings of 70 cents a share in 2003 -- some 24 cents higher than the consensus estimate of Wall Street analysts polled by Thomson First Call.

Ford reports 2002 financial results Jan. 21.

"One year ago today I told you we were going to fix the Ford Motor Co.," Ford said in a meeting with securities analysts attending the North America International Auto Show. "I can tell you after one year I feel a lot more confident in that statement."

Ford and other executives discussed the company's 2002 performance and 2003 goals. Last January, the company began a five-year revitalization plan that called for cutting 35,000 jobs, closing five plants and discontinuing four models.

Without being specific, Ford said the company's financial performance last year exceeded year-ago forecasts. The company has said it expects to earn 40 cents a share for 2002, or $750 million.

Like others in the industry, Ford expects U.S. light vehicle sales to decline in 2003 to about 16.5 million, down from 16.8 million last year.

The company said it expects quality and market share to improve worldwide this year and for both pretax automotive income and operating cash flow to break even.

Ford said its quality ratings improved in '02 after being flat for four years.

"These milestones demonstrate that Ford intends to deliver another year of strong and measurable results that support the plan we outlined one year ago," said vice chairman and chief financial officer Allan Gilmour.

In a research note this week, UBS Warburg analyst Saul Rubin said there's "no quick fix solution" for the company, which turns 100 in June.

"At this point, it's hard to imagine a scenario in which we become more positive on Ford in the near term," the note said. "Even a successful restructuring of operations will take many years and include many headaches."

Analysts have said it could be difficult for Ford and other domestic automakers to grow their U.S. market share as foreign transplants such as Toyota Motor Corp., Nissan Motor Co. and Hyundai Motor Co. add new products and manufacturing capacity in North America.

Ford saw its U.S. market share decline to 21.3 percent in 2002 from 22.9 percent the year before, according to Ward's Automotive Reports.

Toyota and Honda on the other hand -- the two largest foreign players in the U.S. -- both saw their shares rise last year. Toyota, including the Lexus brand, went to 10.4 percent from 10.2 percent while Honda, including Acura, went to 7.4 percent from 7.1 percent.

Pension liabilities continue to be a drag -- as they are for many other large companies. Preliminary figures show Ford's worldwide pension plans were underfunded by $14.5 billion at year's end, including $7.3 billion in the United States. The return on U.S. pension assets was off 9.7 percent last year.

Ford, which has maintained pension plans for more than 50 years, said it contributed $500 million to the U.S. fund Jan. 6 and plans to add another $500 million in the first half of '03.

The automaker has decided to reduce its assumption for how much it will earn from investments to 8.75 percent this year from 9.5 percent in 2002.

Slumping investment returns in the equities markets and a growing number of retirees have been the biggest factors contributing to underfunded plans.

In his remarks to analysts, Ford said the company's turnaround continues to be product-led, and he pointed to this week's auto show in Detroit as confirmation.

Ford introduced 15 production and concept vehicles at the show, three times more than what it typically unveils.

Ford executives were particularly upbeat about the debut of the new F-150 pickup truck and the next-generation Mustang, both of which are considered crucial to the turnaround.

The F-150 is part of Ford's F-Series trucks -- the best-selling vehicles in the world -- and Ford said no lineup of vehicles has been more important for the company in the past 50 years.

He said smooth production of the new F-150 is vital. It will be watched closely by analysts because of some troubled launches in Ford's recent past.

"We will nail the launch of this product," Ford said.

In afternoon trading Friday on the New York Stock Exchange, Ford shares were up 27 cents to $10.50.

On the Net:

Ford Motor Co., http://www.ford.com/
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Stacy94PGT
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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