Month: April 2010

Ford Motor Co.’s European operations reported a pre-tax operating profit of $107 million, compared with a loss of $585 million a year ago.

Overall, the U.S. automaker posted net income of $2.1 billion in the first quarter, almost twice the figure projected by analysts. The increase was fueled by a 37 percent rise in U.S. sales.

The profit compared with a loss of $1.4 billion a year earlier. Revenue rose to $28.1 billion from $24.4 billion.

Ford said the improvement in Europe was explained primarily by higher volume, lower costs, and higher parts profit. First-quarter revenue in Europe was $7.7 billion, up from $5.8 billion a year ago.

The first-quarter results prompted Ford to advance its forecast for becoming “solidly profitable” to this year instead of 2011.

“Our plan is working, and the basic engine that drives our business results — products, market share, revenue, and cost structure — is performing stronger each quarter, even as the economy and vehicle demand remain relatively soft,” CEO Alan Mulally said in a statement.

Ford expects to build 625,000 vehicles in North America this quarter, 30,000 more than its previous guidance and 194,000 units above the year-earlier total.

Ford expects its automotive structural costs to be “somewhat” higher in 2010 compared to last year as the carmaker boosts production to meet demand.

The company still forecasts year-end sales in the U.S. to be between 11.5 million to 12.5 million units this year. In Europe, Ford has raised its guidance on full-year industry volume to 14 million to 15 million units. Ford’s previous guidance was 13.5 million to 14.5 million. Ford expects its U.S. and European market shares to be equal to 2009.

The change in industry volume forecasts reflects strong first-quarter sales, although Chief Finance Officer Lewis Booth says there still is uncertainty about the extent of payback from scrappage programs in Europe.

Ford’s automotive operations had a pre-tax operating profit of $1.2 billion, vs. a loss of $1.9 billion a year earlier. Ford ended March with $25.3 billion in automotive cash, down from $25.5 billion at the end of the fourth quarter.

Booth attributed the negative cash flow to Ford depleting its year-end inventory and then having to build up new models for the current model year.

“We will be solidly profitable in 2010,” Booth said. “We will have a positive cash flow.”

Ford Motor Credit reported net income of $528 million, up from a loss of $13 million a year-earlier.

Ford said the improvement stemmed from leased vehicles holding their value better, which yielded higher prices at auction.

“Economic conditions are still uncertain and, as always, we will utilize the solid business practices and superior servicing that remain the foundations of our company,” said Ford Credit CEO Mike Bannister in a statement.

Ford was projected to earn $1.2 billion in the quarter, according to an average of three analysts’ estimates compiled by Bloomberg. The automaker’s first-quarter U.S. sales surge was more than twice the industrywide increase, and Ford had the smallest discounts among domestic automakers, according to researcher Autodata Corp. Buyers also chose costlier options, helping generate more revenue per car.

‘Momentum’

“There’s a lot of momentum at Ford right now in terms of customers’ perception of their products,” said Efraim Levy, a Standard & Poor’s equity analyst in New York, before today’s results were released. “We’re hitting the point where it’s time to give them the benefit of the doubt, rather than view them with skepticism.”

Redesigned models such as the Taurus sedan helped boost U.S. market share to 17.4 percent through March from 14.7 percent a year earlier, the biggest jump since 1977, according to Ford. This year, dealers will get the new Fiesta and Focus small cars after Ford’s reliance on trucks contributed to $30 billion in losses from 2006 through 2008 as fuel prices surged.

The automaker last posted four straight quarterly profits from the third quarter of 2004 through the second quarter of 2005.

Executive Chairman Bill Ford, 52, said shoppers are considering Ford models in part because the automaker avoided the government-backed bankruptcies that befell the predecessors of General Motors Co. and Chrysler Group.

“But if they don’t like what they see, they’ll go elsewhere,” he said after a speech this month in Detroit.

Also buoying Ford’s share is a shift in some consumers’ impressions after Toyota Motor Corp.’s recalls of more than 8.5 million vehicles worldwide, said Bernie McGinn, president of McGinn Investment Management of Alexandria, Virginia. Toyota’s first-quarter U.S. vehicle sales rose 7.2 percent, half the industry’s 16 percent advance.

“Toyota has taken a hit to their image for automotive excellence, and the chief beneficiary is Ford,” McGinn said. “This is the first time in a generation that people are looking at Ford in a really positive way.”

Pricing gains helped, too. Revenue from each vehicle sold rose $2,041 in 2009 on new models such as the Fusion hybrid and purchases of more-expensive features, according to Mulally. Ford expects to see “positive net pricing” again this year, Booth said in January.

Mulally’s brand-repair strategy was financed by $23 billion in borrowing after he joined the company. While those loans enabled Ford to avert a Chapter 11 filing, they also added to automotive debt that reached $34.3 billion at the end of 2009, up from $24.2 billion a year earlier.

“Ford has got to pay down its debt,” said Jim Hall, principal of consultant 2953 Analytics in Birmingham, Michigan. “And they have to weigh paying down the debt against investing in new products.”

GM and Chrysler were cleansed of obligations in bankruptcy. GM reported paying off the last $4.7 billion in U.S. loans April 21, the same day Chrysler posted a first-quarter operating profit of $143 million.

‘Seen this movie’

Ford can’t risk complacency and arrogance as it tries to complete a turnaround, according to Bill Ford. First-quarter U.S. sales totaled 1.08 million in 2000. This year’s tally was 441,708.

“I’ve seen this movie before,” Bill Ford said in Detroit last week. “I know how quickly self-satisfaction can turn into self-destruction.”

For now, Ford reaps rewards for going it alone and not taking a government rescue, McGinn said. Of 16 analysts covering the shares, eight say buy, six advise holding and two recommend selling, according to data compiled by Bloomberg. In January 2009, one analyst had a buy rating while eight said hold and three said sell.

“Ford just seems like it can do no wrong,” said John Wolkonowicz, an analyst at consultant IHS Global Insight. “The company is doing very well, and the stock is doing very well.”

Chrysler Group is asking the U.S. Bankruptcy Court to block a new Colorado dealer reinstatement law — a move the company took against similar laws in four other states.

On Friday, Chrysler filed a complaint asking for a ruling by the Bankruptcy Court in New York that the Colorado law, enacted last month, is pre-empted by federal bankruptcy laws.

“The Colorado dealer law attempts to compel new Chrysler to offer rejected dealers any planned dealer establishments or relocations rather than awarding them to existing dealers whose dealer agreements and relationships were specifically and strategically selected and assumed,” the 23-page complaint said.

The new Colorado law requires Chrysler and General Motors Co. to offer a rejected dealership the right of first refusal if the company wants to reopen a point in the rejected dealer’s old market. If the automaker already has re-awarded such a franchise, it must offer to reinstate the rejected dealership or compensate it.

The office of Colorado Gov. Bill Ritter did not immediately respond today to requests for comment.

Other state efforts

In December, Chrysler filed complaints in the same Bankruptcy Court seeking to block similar laws enacted by Illinois, Oregon, Maine and North Carolina.

North Carolina backed off enforcement of its law in a settlement this month with Chrysler. Illinois, Oregon and Maine are continuing to contest Chrysler’s complaint.

Chrysler filed its complaint last week as two Colorado state lawmakers introduced legislation to try to beef up enforcement of the new law.

Sens. Shawn Mitchell, a Republican, and Chris Romer, a Democrat, submitted a bill Friday that would let Colorado authorities impose fines of between $10,000 and $25,000 a day on any automaker that doesn’t comply with the March law.

Chrysler told at least one rejected Colorado dealer this month that it “has no intention” of offering reinstatement under the new state law, a copy of the company’s April 2 letter says.

“In my 12 years in the state Legislature, I’ve never seen a company flagrantly announce it will ignore a law,” Mitchell said in an interview.

He said he hopes the Colorado Senate and House will pass the bill by May 12, when the Legislature adjourns for the year.

Arbitration issues

The confusing swirl of events surrounding the Colorado law is complicated by arbitration offered to rejected dealerships seeking reinstatement under a federal law enacted in December.

Eight of the 14 closed Chrysler dealerships in Colorado are seeking reinstatement through arbitration, said Tim Jackson, president of the Colorado Automobile Dealers Association. Of the eight, five have had their markets filled by another dealership, he said.

Under the federal law, arbitrations have to be completed by July.

“We welcome the ability to respond and defend our actions as required by federal law,” Chrysler said in a statement over the weekend.

In supporting its complaints in federal Bankruptcy Court, the company cited an August decision by the court that barred a group of rejected dealers from pursuing claims under state laws.

The redesigned 2011 Jeep Grand Cherokee arrives in July — so why no pre-launch hoopla? Chrysler didn’t even display a production version at the recent New York auto show.

But Fiat has displayed some dexterity in the past with car-launch publicity blockbusters, so maybe Chrysler CEO Sergio Marchionne has something up the sleeve of his black sweater. Indeed, Jeep CEO Michael Manley said at the New York show that Chrysler plans something “unusual.”

Marchionne disdains traditional marketing and advertising in favor of unconventional ways of cutting through the clutter. For instance, when Fiat launched the retro 500 minicar in 2007, the company staged a countrywide extravaganza in Italy. It perched a 500 atop a giant floating platform on the Po River in Turin, accompanied by dancers and singers.

At the time, Marchionne, an admirer of Apple CEO Steve Jobs, said the 500 would be “the iPod of cars.” So maybe the pitch is that the Grand Cherokee is the iPad of CUVs.

Chevrolet will pitch its Cruze Eco variant as a gasoline-powered car that delivers hybrid-like fuel economy without a hybrid’s hefty price tag, says Chuck Russell, Chevrolet’s vehicle line director.

General Motors Co. estimates the Cruze Eco’s highway fuel economy at 40 mpg. EPA ratings for the Eco and the standard Cruze compact are not yet available.

Russell said the Eco will be more expensive than the base Cruze, but the premium will be nowhere near as high as the cost of hybrid technology.

“Will we charge for the benefit? Yes. Will it be thousands? No,” he told Automotive News at the New York auto show. “In fact, it will be in the hundreds.”

By contrast, the Ford Fusion Hybrid has a base price of $27,995 including shipping, a bump of $8,000 over the base Fusion. Hybrid models often have more standard equipment than base models.

Russell said GM put some pricey equipment on the Eco to reduce weight. For instance, the Eco has 17-inch forged aluminum wheels, a feature usually found on sporty models, he said.

“We felt strongly that it needed to be on this vehicle because the forged aluminum wheels save over 10 kilograms,” (2 pounds) Russell said.

The version shown at the New York show had a six-speed manual transmission teamed with a 1.4-liter turbocharged engine with variable valve timing. Russell said an automatic transmission also will be offered.

The Cruze will go on sale in the third quarter, and the Eco will follow later in the year. Russell said the base Cruze will be priced competitively with compact leaders Toyota Corolla and Honda Civic. The Corolla’s base price, including shipping, if $16,200; the Civic’s is $16,155.

Ford Motor Co. is “encouraged” by April U.S. sales running ahead of the level from a year earlier, the automaker’s Americas chief said.

“We’re starting to see the economic metrics start to go in the right direction,” Americas President Mark Fields said today at an auto-industry breakfast in Detroit. “I’m cautiously optimistic on consumer confidence.”

Fields didn’t give specifics on Ford’s sales performance. Ford’s U.S. deliveries were 133,979 in April 2009, down 32 percent from April 2008 deliveries of 195,665 vehicles, according to the Automotive News data center.

Fields’ comments added to evidence of a rebound in the U.S. auto market after sales slumped to a 27-year low in 2009. Industrywide deliveries rose 24 percent in March, and marked a fifth consecutive monthly advance. Sales during the first quarter improved 16 percent from the same quarter last year.

“The big question is not so much do we have a recovery, but to what extent and how long will it take?” Fields said.

Ford, the only major U.S. automaker to avoid bankruptcy last year, finished the first quarter with 17.4 percent of the domestic market, according to industry researcher Autodata Corp. The increase of 2.7 percentage points was Ford’s largest quarterly gain since the last three months of 1977, Fields said.

“That’s back when ‘Saturday Night Fever’ and ‘Close Encounters of the Third Kind’ were in movie theaters,” Fields said. “It’s been a long time.”

Ford will remain competitive in offering incentives, while still keeping spending below last year’s levels, Fields said.

“We don’t go to the point where incentives really start damaging the brand and really start hurting” resale values for customers, Fields said.

MUNICH – Audi AG for the first time passed Mercedes-Benz brand in global quarterly new-car sales. The Volkswagen AG premium brand outsold Mercedes brand 264,100 to 248,500 in the first three months. For Audi, the quarterly sales result was a new company record and 25.9 percent above the same period last year.

The company’s stated goal is to become the “most successful luxury automaker in the world by 2015,” at which point it aims to sell 1.5 million cars a year.

Audi finished 2009 in third place behind No. 1 BMW and second-ranked Mercedes in global premium-brand new-car sales. BMW reports its global car sales later this month.

Depending on those results, there could be a new leader. At the very least Audi will hold the No. 2 spot.

Mercedes might have trouble regaining second place as the year progresses.

“We expect continued growth compared to last year in the second quarter of 2010,” Audi sales chief Peter Schwarzenbauer said in a statement on Thursday.

One of the main reasons Audi pulled ahead of Mercedes is because of its dominance in China. Audi delivered 51,449 vehicles in China during the first three months of the year, twice as many as Mercedes’ 24,100 units and well ahead of BMW’s Q1 total of 34,179.

For March, Audi’s worldwide sales came to 110,400 vehicles, an increase of 22.2 percent over the year-earlier period, which was when all premium automakers were hit by the global slump in demand for luxury cars.

My 1995 chevy blazer V-6 will not start unless you put gas in the throttle inlet after it sits for a while. I have had a new fuel pump and inline filter installed and this did not solve the problem. I thought the subject part might be bad and cause this problem.

Response:

Check your voltage at the Injector when you first turn on the ignition, There should be a pulse there. Have you tried cycling the ignition 3 or 4 times before cranking? Have you checked for Engine Codes?