Ford: Back in Black

Like You Know Who, Ford is Back in the Black

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After reporting last week that Ford will cease being irrational and start selling the European-market Focus in the United States, I was literally beside myself with joy when I read that Ford has just turned over $1bn in profit in the third quarter. This is easily one of the greatest return from death stories since Lazarus walked out of the tomb or Neil Patrick Harris got a hit show again. Okay, maybe Doogie isn't back, but Ford has all the marks of a patient set to make a full recovery.
Like many headlines drawn from statistics, the devil is in the details. Yes, Ford has brought in more than it spent. However, it still has serious debts issues and will need to renegotiate with the UAW to be competitive with GM and Chrysler LLC in the long run. Also, Ford saying that it will be "solidly profitable in 2011" is as meaningless as worthless as the Zimbabwean dollar. If everything stays as it is right now (here's an insider tip: it won't) then Ford will be fully in the black. Something tells me there are some potholes and an injury or two up the road. All the same, let's celebrate the first solid application of polish to what had been one of the more tarnished names in the automotive field. Ford is proof positive that when a business is actually managed, rather than simply taken advantage of and its capital reserves of history squandered, it will succeed. Funny thing, that.

Good Night, Saturn

Saturn: GM's Stab at Long-Term Relevance Goes Straight Through Its Heart
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As this Washington Post article details, Penske Automotive has backed down from a deal to acquire the Saturn brand from GM. Penske had hoped to acquire the Saturn dealers, leaving a partner manufacturing firm to build the cars to be sold. It was a sensible plan; Penske has long been a force in retailing and the dealership world, yet he has very little experience (if any) on building cars (Indy, excepted). The obvious hitch was that there were no automakers out there who are so flush with cash that they could acquire a brand like Saturn.
I did find one of the descriptions of Saturn in the article a bit overblown. For example, does Saturn really have a " '...passionate customer base'?" I can't remember too many people salivating over the Vue, but then again, I know people who like cars. I won't make light of what is clearly a tragic consequence of GM's mismanagement. Saturn could have worked, in fact, I'll even go so far to say that it should have worked. A company dedicated to customer service, safe, cheap and efficient small cars. Gosh, that sounds like a recipe for a turnaround, doesn't it? Unfortunately, it was--like so many other GM decisions of the past two decades--a reaction to what Toyota, Honda, and other Japanese automakers had already done. If the automobile market is to return to a sustainable level, some of the saturation needs to be wrung out. It won't be pretty, it won't be popular, but it is necessary. The first one down the drain just happens to be "a different kind of car company."