GM's Profits Blow Ford Away, Partly Due to Old Product Line

By Krebs, Michelle | The Washington Times (Washington, DC), February 23, 1996 | Go to article overview

GM's Profits Blow Ford Away, Partly Due to Old Product Line


Krebs, Michelle, The Washington Times (Washington, DC)


General Motors Corp. and Ford Motor Co. recently announced earnings for the fourth quarter and the full year of 1995, and what a contrast.

Selling mostly old products at rock bottom prices, GM earned a record $6.9 billion for 1995, a 40 percent increase from 1994. In the fourth quarter alone, GM earned $1.9 billion, a 19 percent rise from the previous fourth quarter. The higher earnings also came on lower overall vehicle sales.

Meanwhile, across town, Ford saw its earnings go south. For the year, Ford earned $4.1 billion, down 22 percent from 1994's record $5.3 billion. Worse, in the fourth quarter, earnings plummeted 58 percent to $660 million from 1994's $1.6 billion.

Ford Chairman Alex Trotman said second-half earnings were affected by lower U.S. production volume and the automaker's unprecedented number of major product launches, including the new Ford Taurus/Mercury Sable, Ford F-series pickup, and the new Ford Fiesta and Ford Galaxy minivan in Europe. Mr. Trotman has said no year-over-year improvement in earnings would occur until the second half of this year, when the Taurus/Sable, F-series and the redesigned Ford Escort/Mercury Tracer, which combined, make up 40 percent of Ford's production, are fully launched.

"Indeed, GM is milking old products and old engines, and that's showing up in its financial results," said Steve Girsky, auto analyst with Morgan Stanley. "Meantime, Ford is spending heavily on new product, and it is costing them."

But, warns Mr. Girsky, no automaker can milk the same product forever. And while GM's product spending goes up substantially over the next few years, Ford's will decline somewhat. So the tables may well turn.

Beginning this fall, GM will replace its entire midsize car line with new models, which include the Pontiac Grand Prix, Oldsmobile Intrigue, Chevrolet Malibu and Buick Regal. A new line of front-wheel-drive minivans go on sale in the fall to replace the Pontiac Trans Sport, Chevrolet Lumina APV and Oldsmobile Silhouette. Also this fall, Cadillac introduces the Opel-based, entry-luxury Catera, and Buick debuts a new Park Avenue.

That's not to say Ford's future product plan is empty by any means. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

GM's Profits Blow Ford Away, Partly Due to Old Product Line
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.