Ford’s (F) Alan Mulally told an industry conference that the company should be profitable again in 2009. At about the same moment, GM (GM) was saying the its was revising its 2007 production targets downward. The larger car company also said the industry would not do as well as hoped this year.
Mr. Mullaly is still gambling on two hands in which he has not seen the last cards. One is UAW negotiations. The union may appear to be feeble and ready to roll over, but the talk of profits and selling units like Jaguar, Rover, and Volvo will probably not go unnoticed by the blue collar crowd.
Then, there is the business of unit sales. Ford and GM were both off in the neighborhood of 20% last month.That may not go one forever, but it only has to continue for another year or so and the amount of money the companies cut will become academic.
Someone needs to check Mullaly’s crystal ball. It has been recalled for repairs.
Douglas A. McIntyre