Ford Shares Profits, Bonus Checks Are Back

Big Three bonus checks were a part of life in Detroit in the 1960s and through the early years of the 1970s. 

Those checks were as much a part of the fabric of the Motor City as were the sounds of Motown on CKLW, underground rock on WABX or reading the latest notes of rebellion in the Fifth Estate.

CKLW and WABX are gone forever. Motown moved. But, the checks are going out again. 

Nearly 46,000 people who work for Ford Motor Co. will be getting profit sharing payments on March 14, 2013, thanks to Ford's 2012 pre-tax profits of $8.3 billion.

The average check will be $8,300 because of the UAW-Ford collective bargaining agreement.

However, full year pre-tax profit of $8 billion, or $1.41 per share, and net income of $5.7 billion, or $1.42 per share, were each lower than a year ago.

Still, Ford had its highest fourth quarter pre-tax profit in more than a decade — when trucks and SUVs were a more significant portion of the U.S. product mix — at $1.7 billion, or $0.31 per share, an increase of $577 million from fourth quarter 2011. Ford has now posted a pre-tax operating profit for 14 consecutive quarters

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2013 Ford Fusion Hyrid

The Manufacturing Renaissance continues as does the reinvention of what we drive and how we drive.

An all-time record of 3,244 Fusion Hybrids were sold in December, compared to the previous mark of 3,010 in August 2010. The car is expected to achieve record January sales when results are announced Feb. 4. Nearly 70 percent of new Fusion Hybrid owners are new to the Ford brand, while Toyota’s conquest rate for its Camry Hybrid is only 53 percent.

“We’re bringing new hybrid buyers into the market, many of whom wouldn’t be considered traditional hybrid buyers,” said Amy Marentic, marketing manager, Global Small and Medium Cars. “There’s a sense hybrid buyers represent a pragmatic or green ethic. Fusion Hybrid is scoring with these audiences, but the car also puts some excitement into the segment through design; it shows hybrids can have beautiful and sophisticated styling. This, in turn, means different buyers.”

Not only are most buyers new to the Ford brand, early data suggest Fusion Hybrid is appealing to younger buyers outside the traditional hybrid vehicle demographic.

Ford reports new Fusion Hybrid buyers are five years younger than buyers of the previous Fusion Hybrid, dropping to 48 years old from an average of 53 years old. 2012 model year Toyota Camry Hybrid buyers have an average age of 54, according to J.D. Power and Associates PIN data. Moreover, 22 percent of Fusion buyers are under the age of 35; only 13 percent of Camry Hybrid buyers are that young.

Not surprisingly, Fusion Hybrid’s best-selling markets are San Francisco, Los Angeles and Washington, D.C., but Ford reports stronger sales in the more traditional buying areas of the Central, Southeast and Great Lakes regions – areas not known for strong hybrid sales. In these areas, retail sales more than tripled in December compared to the previous year.

Fusion Hybrid continues to have the fastest turnover rate (the number of days cars sit on dealer lots waiting to be sold) of any vehicle in the Ford lineup. Fusion Hybrid turns over in just 10 days on average.


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Restore The Roar: Manufacturing Renaissance

The Great Collapse

Manufacturing is Michigan. Michigan is manufacturing. The collapse of its manufacturing sector crippled Michigan for two decades. Finally, the roar is being restored in manufacturing and the state of Michigan. Yet there is much work to be done and there are some serious questions that have to be answered for the future.

The first five books in this ebook series are available at Vook.com and Amazon.

December Did Not Disappoint: Great Auto Numbers

Did you see these December sales numbers for the Big Three? Numbers were up around the world. Car makers from BMW to Volvo had a great month. However because of space limits I have decided to focus on what the Detroit automakers are doing. 

This is the Manufacturing Renaissance that we have been waiting for. Still, we have been burned by premature optimism in the past. Will these upbeat numbers continue through 2013? We will look at a forecast on that tomorrow. But for now, let's just feel good about these numbers.

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General Motors Co.’s (NYSE: GM) U.S. dealers delivered the company’s highest December sales in five years, with deliveries up 5 percent year over year to 245,733 vehicles.

December was also GM’s best retail sales month of 2012. Retail volume was up 38 percent from November – about double the industry’s estimated increase. Incentive spending was competitive with industry-wide levels, according to J.D. Power PIN estimates, and remains below many Asian and domestic competitors.

“All four GM brands increased their sales year over year in December and we were strong across the board in cars, crossovers and pickup trucks,” said Kurt McNeil, vice president of U.S. sales operations. “We also achieved an important fuel economy milestone. In December, GM became the first U.S. automaker to sell more than 1 million vehicles in a single year that get an EPA-estimated 30 mpg or better on the highway.”

December Highlights

1. Total GM passenger car sales increased 14 percent compared with a year ago. Crossover sales were up 2 percent and sales of trucks, which include pickups, vans and SUVs, were equal to a year ago.
2. Compared with November, total car sales increased 18 percent, truck sales increased 52 percent and crossover sales increased 22 percent.
3. Combined mini, small and compact car sales were up 52 percent year over year driven by continued strong Buick Verano, Chevrolet Spark and Sonic sales; a 27 percent increase for the Chevrolet Cruze; and a 72 percent increase for the Chevrolet Volt.
4. Cadillac posted a double-digit year-over-year sales increase for the third consecutive month.
5. Cadillac passenger car sales increased 64 percent year over year as the all-new ATS and XTS continue to establish themselves in the luxury market.
6. Year-over-year sales of the Chevrolet Silverado increased 6 percent and sales of the GMC Sierra were up 13 percent. GM pickup sales were the highest since September 2008.

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Chrysler Group LLC today reported U.S. sales of 152,367 units, a 10 percent increase compared with sales in December 2011 (138,019 units), and the group’s best December sales since 2007.

The Chrysler, Dodge, Ram Truck and FIAT brands each posted year-over-year sales gains in December compared with the same month last year. The FIAT brand’s 59 percent increase was the largest sales gain of any Chrysler Group brand for the month. December marked Chrysler Group’s 33rd-consecutive month of year-over-year sales gains.

For the year, Chrysler Group sales totaled 1,651,787 units, up 21 percent compared with sales in 2011. The Chrysler, Jeep®, Dodge, Ram Truck and FIAT brands each recorded significant sales gains during 2012 compared with sales in the previous year. The Jeep brand’s 13 percent sales increase in the U.S. helped push its global sales to an all-time record in 2012. Seven Chrysler Group models set annual sales records in 2012. 

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Ford Motor Company’s U.S. sales grew across the board in 2012, with cars up 5 percent, utilities up 7 percent, and trucks up 2 percent for the year. Overall, the Ford brand ended 2012 with 2,168,015 vehicles sold – the only brand to top 2 million U.S. sales.

“Ford finished 2012 strong, with retail sales showing improved strength as more customers returned to dealer showrooms,” said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service. “Ford’s fuel-efficient cars and hybrid vehicles showed the most dramatic growth for the year, and we achieved our best year for commercial vehicle sales since 2008.”

Sales of Ford’s small cars were up 29 percent in 2012, with 316,006 vehicles sold, and overall car sales were up 5 percent in 2012, with 760,646 sold. Focus sales gained 40 percent during the year, and the all-new C-MAX continues its strong selling rate. In the first four months of sales, 13,309 C-MAX vehicles were sold, making it the fastest sales start of any hybrid vehicle in the industry.

Ford again became America’s best-selling brand of utility vehicles in 2012, with 619,470 vehicles sold. Escape broke its 2011 record sales levels with 261,008 vehicles sold, up 3 percent. Explorer gained 17 percent for the year, with 158,344 vehicles sold.

Ford trucks continued to dominate in 2012 – with F-Series America’s best-selling pickup for the 36th straight year and 31 consecutive years as America’s best-selling vehicle. Overall, 645,316 F-Series were sold, a 10 percent increase versus 2011. Total Ford brand truck sales – including Transit Connect and E-Series – were up 2 percent for the year at 829,477 vehicles sold.

Ford also remained America’s largest maker of commercial trucks for 28 years, posting a 7 percent increase in 2012. That marks Ford’s best year for commercial truck sales since 2008.

Last month, Ford delivered its best December sales results since 2006, with 214,222 vehicles sold – a 2 percent increase.

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Restore The Roar: Manufacturing Renaissance, a series of e-books, is in production and should be released in early 2013.

Last Chance Mile: The Reinvention of an American Community is available now at Amazon, Barnes & Noble, and Abbott Press, along with Schuler Books & Music in Grand Rapids and Kentwood, Michigan.

Or you can simply click on the Buy Now button on this page for speedy delivery of an autographed copy of Last Chance Mile: The Reinvention of an American Community.

Better Than You Thought: Dynamite December

2013 Chevy Spark

Let's end 2012 with a pleasant surprise. December should turn out to be a dynamite sales month for the auto industry. Cars are moving. Trucks are rumbling. New sets of keys are being pressed into the hands of proud owners at a rate we thought we would never see again just a year ago.

Next year should be just as good, if not a little better. What could go wrong? What if the industry can't keep up with demand?

We will get to that in a few paragraphs. First, the good news...

With annual year-end clearance events in full swing, new-car sales are expected to surpass 1.35 million units in December, pushing the industry's closely followed seasonally adjusted annual rate (SAAR) to 15.2 million units, according to Kelley Blue Book, www.kbb.com, the leading provider of new and used car information. 

After a strong November and December, the final sales tally for 2012 should approach 14.5 million units overall.  This tally would amount to a more than 13 percent year-over-year increase and the third consecutive year of double-digit auto sales gains.  While incremental sales growth will continue in 2013, Kelley Blue Book does not expect to see a fourth consecutive year of double-digit sales gains.

With employment and consumer confidence expected to improve only modestly next year, Kelley Blue Book expects sales growth will come at a slower pace from this point forward.  While modest economic growth will help keep sales stable in 2013, Kelley Blue Book expects to see as many as 250,000 to 300,000 additional sales from consumers who will arrive at the end of their lease term next year. 

Although most signs point to additional sales growth in 2013, Kelley Blue Book will keep a close eye on the 'Fiscal Cliff' discussion, as a tax increase for middle-income households could slow sales growth through next year and beyond.

So, what could go wrong besides the Fiscal Cliff? How about this? The industry is not ready. I am not talking about the OEMs. I am talking about the supply chain that GM, Ford, Chrysler, Toyota and the rest depend on.

More on that will be published in Restore the Roar, a series of e-books that will be out early in 2012. For now, take a look at the sample chapters that I have posted at www.rodkackley.com

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Last Chance Mile: The Reinvention of an American Community is available now wherever books are sold including Amazon, Barnes & Noble and Abbott Press.

Special autographed editions are also on the shelves of Schuler Books & Music in Grand Rapids and Kentwood, Michigan and are also available by clicking the Buy Now button on this page.

Restoring The Roar: Ford Expansions

Ford Motor Company (NYSE: F) is spending more than $773 million on new equipment and capacity expansions across six manufacturing facilities in southeast Michigan as it delivers on a commitment to invest $6.2 billion in U.S. plants by 2015.

The investments in Michigan will create 2,350 new hourly jobs and allow the company to retain an additional 3,240 hourly jobs. The 2,350 new positions are part of the 12,000 hourly jobs that Ford is adding across the U.S. by 2015.

"Even as we wrap up an incredibly busy year of capacity expansions and product launches, we are continuing to look to the future,"  said Jim Tetreault, Ford vice president of North America Manufacturing. "These investments, many of which are already under way, will ensure our southeast Michigan manufacturing facilities can support our aggressive growth plans."

Expansion work at several plants started earlier this year to increase Ford's capacity to provide transmissions and axles to support growing demand for fuel efficient vehicles and F-Series pickup trucks.

In addition, over the next six months Ford will bring a new stamping press on line at Michigan Assembly Plant; install equipment for four new stamping presses at Dearborn Stamping Plant; and finish expansion work at Flat Rock Assembly Plant to produce the new Fusion next year.

Specifically, Ford is making investments at the following locations:

* Michigan Assembly Plant - $59.4 million for stamping press line expansion

* Dearborn Stamping Plant - $305 million for plant modernization, new press lines, scrap conveyor system and other machinery and equipment

* Flat Rock Assembly - $161 million for machinery and equipment to assemble the new Ford Fusion and as an additional production facility

* Sterling Axle Plant - $86 million for machinery and equipment investment to meet axle demand increase and future model changes

* Van Dyke Transmission - $87.7 million for machinery and equipment investment to meet capacity expansions for 6F35 and 6F50 transmissions

* Livonia Transmission - $74.7 million for machinery and equipment investment for transmission expansion and test equipment 

I will have more stories of the reinvention of manufacturing in Michigan in the Restore The Roar series of e-books that will be published in early 2013. The latest information on that will be available on this blog or at www.rodkackley.com.

 

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 Last Chance Mile: The Reinvention of an American Community is available now wherever books are sold including Schuler Books & Music in downtown Grand Rapids, Michigan and on 28th Street in Kentwood.

Hardcover, soft cover and e-book editions are also available from your favorite online retailers. Or you can simply click the Buy Now button at the top of this page for an autographed hard cover edition.

For free sample chapters of Last Chance Mile,  please go to www.rodkackley.com/