Ford's Great EarningsBy Jeremy Anwyl October 26, 2010
Ford announced earnings today that continued a trend for the year: They are nicely profitable in a market with sales stuck at low levels.
It is interesting to note how two years ago, when faced with some of the worst sales in recent memory, the U.S. industry cut capacity, restructured and raised prices. (Through cutting incentives.)
Ford is not the only car company to show these efforts are paying off. But they do seem to be doing a bit better than almost everyone else.
I have been fielding calls today asking why. Is it better a product? Partially. Ford has been introducing a product that is competitive, but not necessarily segment leading. (Although SYNC is a nice differentiator.)
Is it because they were able to avoid bankruptcy? Again, partially. This was a PR win, but also means they have to deal with a higher debt load than GM or Chrysler.
Better marketing? They have had a few visible successes, but looking more deeply, their marketing might actually be viewed as more conservative than their competitors.
The big thing Ford has going for it right now is consistency of management. Alan Mulally has been there long enough to be making a difference. They have been implementing his plan, with relentless focus, and with the same team in place before, during and now as a recovery seems underway.