News of the U.S. auto industry's demise is greatly exaggerated. That was the message I got today when I interviewed Ford Motor Company CEO Alan Mulally. While Mulally can't comment on the future of GM and Chrysler, he's confident in the future of his firm.
Mulally expects vehicle sales to pick up, so much so that Ford is stepping up production. The company has also been scaling back on incentives. That is helping boost margins. The government is also getting ready to launch its "Cash for Clunkers" program. A number of Chicago area dealers says that program is generating a lot of showroom traffic, so that could also mean better sales for Ford.
Global Insight auto analyst John Wolkonowicz thinks there are other factors working in Ford's favor. He says there is anecdotal evidence of a "Buy American" trend building in some parts of the country. He thinks Americans might be more inclined to buy from a company that didn't file for bankruptcy or get a government bailout. He also believes Ford dealers stand to benefit from the closure of 1300 GM dealerships.
Ford still faces many of the same obstacles as its competitors. Housing values keep falling, unemployment is rising, and the credit markets still aren't where they were a year ago. But Ford appears to be headed in the right direction and could reach a profitable destination sometime next year.
Comments
Diane.. follow-up from today's call about our company... the emails I send keep getting bounced back. Could you send me an email, or call me again?
Thanks,
Tom
I think Ford's comeback means the government must do everything in its power to make GM viable again. Those of us who want to "buy american" need to have an american alternative. GM is the only alternative (forget Chrysler...it's history). While a revived GM will cut into Ford's market share, the two of them together will have a greater share than will Ford alone. And without GM, Ford is left to fight the foreign competition alone. They can't win that fight.