jpd80 Posted May 1, 2017 Share Posted May 1, 2017 Ford-GM gap isn't as wide as it looks - Profit plotlines may shift as 2017 unfolds April 30, 2017 @ 12:01 am - Autonews.com Nick Bunkley Michael Martinez DETROIT -- Detroit's two largest automakers are heading in opposite directions so far this year, with General Motors' record profits defying signs of a U.S. market slowdown, while Ford spends big on recalls and on technology it hopes will pay off later. Their first-quarter results -- GM earnings up 34 percent, Ford earnings down 35 percent -- reflect the companies' strategies to grow sales today and to stay relevant in the future, along with the fact that GM is at the peak of its product cycle while Ford weathers a lull. Hmm, Ford seems to have gotten the bad news out of the way in the first quarter withcharges associated to continuing door handle recall costs, higher material costs and diverting funding to future electrification and autonomous vehicle projects On the other hand, GM has a couple of nasty costs coming: 1. A $4.5 billion one time charge for sale of Opel - Vauxhall 2. A 10 week down time re-tooling at multiple plants for redesigned trucks and Utilities. In spite of all that, both manufacturers should see continued good revenue coming from strong sales of trucks and Utilities but I wonder if GM's quarterly EBIT results come back closer to those of Ford.... Utilities Quote Link to comment Share on other sites More sharing options...
grbeck Posted May 1, 2017 Share Posted May 1, 2017 Does GM continued high production late last year - and resulting high inventories of many vehicles - affect these results? Quote Link to comment Share on other sites More sharing options...
rmc523 Posted May 1, 2017 Share Posted May 1, 2017 Does GM continued high production late last year - and resulting high inventories of many vehicles - affect these results? Yes, as they book the revenue when the vehicles are sold to dealers, so basically producing more = more revenue = better results on paper. Quote Link to comment Share on other sites More sharing options...
akirby Posted May 1, 2017 Share Posted May 1, 2017 Yes, as they book the revenue when the vehicles are sold to dealers, so basically producing more = more revenue = better results on paper. Until they have to ramp up incentives to actually sell them 2nd quarter. They have poor results coming later in the year and they're trying to get as much as possible early in the year. Quote Link to comment Share on other sites More sharing options...
rmc523 Posted May 1, 2017 Share Posted May 1, 2017 Until they have to ramp up incentives to actually sell them 2nd quarter. They have poor results coming later in the year and they're trying to get as much as possible early in the year. That's why I said better results on paper, as it may appear better, but long term, it isn't necessarily better. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted May 2, 2017 Author Share Posted May 2, 2017 (edited) At the moment, GM is selling plenty of profit rich product, so it's covering added incentives to mop up any excess inventory on the car side.. We have no better example of this than GM's Q 1 result. (GMNA EBIT = $3.4 Billion) The acid test will come in Q2 with special item charges and further on the myriad of SUV and truck changeovers happening later in the year. - more brands - more mouths to feed... Edited May 2, 2017 by jpd80 Quote Link to comment Share on other sites More sharing options...
theoldwizard Posted May 2, 2017 Share Posted May 2, 2017 A lot of folks who do not live near Dearborn don't realize the ENORMOUS commitment Ford has made in Engineering Manpower and Facilities. The all new Research and Engineering Center is moving forward, even if that progress is not obvious. Parking has always been a problem when there is full staffing at R&E, so the first new buildings will be parking garages. They are working on those footing now, and the first one should be complete in 6-12 months. Also, folks not close to Ford engineering/business operation, have probably forgotten that Ford cut about 33% of that workforce 10 years ago, just as the recession was rolling in. They continued on a path of "natural attrition" for several years after that. They have also cut engineering and business staff over seas, most notably in England. About 18-24 months ago, Ford started hiring new engineering and business staff in Dearborn. They quickly exceed the capacity of the buildings that were available. They have renovated part of the old EEE/POEE building (now called Ford Research Laboratory) and have taken over a recent closed department store at the Fairlane Mall. Getting those people out of those building and into the new buildings (once they are built) IS a high priority, but will take years. Quote Link to comment Share on other sites More sharing options...
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