Who could have predicted such a miraculous turnaround for Ford in just a year's time?
Just about everything is going right for this U.S. automaker. Indeed, Ford's strategy for surviving the Great Recession is something to study.
To begin with, Ford made some smart decisions before the crisis by refinancing when credit was still available. Thus when things turned bad at the end of 2008, the company was better equipped to ride out the storm, where rivals GM and Chrysler had to seek billions in TARP money from the government. Some customers still worry that GM and Chrysler might not be around in the future to honor warranties, whereas Ford now seems to be the most likely to survive and even flourish when stronger growth returns.
Even better, the company is producing good cars, and reputation for quality is rising. At the Detroit auto show, industry journal AutoWeek named Ford's next-generation Focus the 'Most Significant' vehicle of 2010. High praise indeed, considering the number of excellent cars and trucks at this annual gathering in Detroit. The popular auto show hosted nearly 40 new vehicle premieres.
Ford has additional promising products underway. The Ford Focus 2011 model is more powerful than today's Focus, and Ford promises it will be more than 10% fuel efficient, meaning a possible fuel economy of about 33 miles per gallon in combined highway and city driving. Ford's Mustang FT 5.0, due in 2011, reportedly comes with major improvements, including a new 5.0 liter V8 engine unveiled at the Detroit Auto Show.
According to yahoo finance, Ford's new 2011 Mustang GT Glass Roof Coupe will be the Official Pace Car for the 52nd Daytona 500 on Feb. 14, the first time in 40 years a Ford vehicle has paced this prestigious race.
In short, Ford is producing products that the American public likes. It has the auto market covered with four major divisions: auto manufacturing, automotive systems, auto financing and truck and auto leasing through its Hertz division.
Given its international profile, the American auto industry is likely to be at the center of any U.S. recovery, and Ford is currently the most successful American auto company.
Ford expects to build a next generation hybrid and plug-in hybrid vehicle in Michigan beginning in 2012, creating 1,000 new jobs; this is in addition to a previous plan to invest $550 million in its Wayne, Michigan, plant, where it intends to build the Focus starting in 2010 and the Focus Electric in 2011. The company also said it is moving its battery system design and development in house; it plans to bring production of hybrid battery packs from Mexico back to Michigan.
Ford's success reminds us that American capitalism still works, whereas GM and Chrysler seem nowhere near healthy enough to return TARP funds. As long as Ford continues to focus on quality and product, look for the car maker to continue to outperform in 2010 and to flourish in the years ahead.
Disclosure: This is not a recommendation to buy or trade Ford stock. However, Striker Securities, Inc. owns Ford Motor Company stock, as well as other securities not related to the auto-industry.