At some point during their troubles, the “Big Three” domestic automakers — Ford, GM and Chrysler — underwent a change. They became the “Detroit Three,” with a name as humble as their falling sales.
Today, it might be time to call Ford Motor Co. “big” again.
Ford announced July 23 that it made $2.6 billion in the second quarter of the year, more than analysts predicted. Its sales have jumped 28 percent for the year, and its share of the American market is climbing.
As automotive analyst Rebecca Lindland said in a story in The New York Times, “They have been making all the right moves. It’s been impressive. They just have an unbelievable amount of momentum right now.”
GM and Chrysler have been recovering nicely, too, but the Ford story is more notable. For one, the company has relied on its own money, not the federal government’s, to pull itself out of its slump. No bailouts, no loans.
That’s not to criticize the government’s involvement with GM and Chrysler. President Barack Obama, in fact, was scheduled to tour their plants in Detroit on Friday to highlight the progress they are making. The president will visit a Ford assembly plant in Chicago this week.
Still, Ford relied on its own money and the goodwill from customers who saw it could pull through without taxpayer help. The company showed the ingenuity to dump underperforming brands and to rein in salaries and the size of its work force.
This has been a painful process, but it’s yielding the results today that should keep the company and its suppliers on solid footing for some time.
Even as Ford predicts falling sales and profits for the next two quarters, its overall health should continue to improve. Significantly, Ford expects to end 2011 with more cash than debt. If you could pay off your credit cards with the money you had in the bank, you’d feel pretty good about your finances, too!
Ford helped build Michigan and its middle class at the start of the last century. Much of that wealth and stature eroded as this one started, but that may yet change if this company can stay profitable.
Michigan can use a few more success stories like this one.
— THE JACKSON CITIZEN PATRIOT