Join Date: Feb 2001
Location: The Hills of North Georgia,USA
USA:Credit unit lifts Ford
Credit unit lifts Ford
Finance losses drop, improving firm's bottom line
By Eric Mayne / The Detroit News
Ford Motor Co.’s financial recovery is getting a boost from a steady decline in vehicle repossessions and customer account delinquencies that have dogged the automaker’s huge finance arm.
Credit losses tied to the financial woes of Ford customers fell to $493 million in the first three months of 2004 — $193 million below the year-ago period, the automaker told Wall Street analysts Wednesday.
A longtime earnings powerhouse that fell astray in the late 1990s under lax management, Ford Credit accounted for $688 million - or 36 percent - of Ford’s $1.9 billion first-quarter profits.
Ford attributes the lower credit losses to falling unemployment, a rebounding U.S. economy and tighter lending standards.
Since Ford launched a revitalization plan in 2002, capping a two-year tailspin and $6.4 billion in losses, the automaker has redoubled efforts to court customers who posed lower risk.
“Fundamentally, you have to validate that you have an authentic customer, that they’re appropriately employed, that there’s a stable background,” said Mike Bannister, chairman and chief operating officer of Ford Credit.
“That’s going to apply in all markets,” Bannister said, adding the automaker is in talks to be an accredited lender in China.
In the first quarter, Ford Credit repossessed 46,000 vehicles, the lowest number since the second quarter of 2002. In the fourth quarter of 2003, Ford Credit recovered 53,000 vehicles from delinquent borrowers.
“Ford is improving in that department because they were so crappy before,” said David Healy of Burnham Securities.
In the first quarter, delinquencies that exceeded 60 days accounted for 0.21 percent of Ford Credit customers — a sharp drop from 0.43 percent in the last quarter of 2003 and 0.42 percent of customers in the first quarter of 2003.
In a related matter, Ford said it is on track to meet its $7 billion full-year earnings by 2006. But near-term business conditions won’t make it easy, chief financial officer Don Leclair warned.
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.....