Detroit's car firms fight for dollars
They have cut thousands of jobs, closed plants and tried to shift their products away from trucks and sport utility vehicles, but the three US-based carmakers still are not making money in North America, the place that made them industrial powerhouses.
Executives from General Motors, Ford and Chrysler, as well as many industry watchers, seem confident that the home-turf profits will come, but a lot depends on how quickly the companies can cut costs and raise productivity by taking advantage of making cars across the globe.
Ford turned a profit last quarter for the first time in two years, while GM recently made money worldwide for a third straight quarter. In both cases, the money came from selling vehicles outside the US, something that would have been unheard of in the past.
It is the worldwide presence that eventually will help the companies make money in North America, with billions of dollars saved across the world in designing, selling and building essentially the same cars in all markets.
“We’re going to be a global company,” Ford CEO and president Alan Mulally said at a recent industry conference. “Up until now we’ve been mainly a regional company with very different Fords. So we’re going to leverage the assets of Ford worldwide.”
That means more models built on the same underpinnings, with more parts common to multiple models to reduce the complexity of manufacturing. And it also means billions in savings from selling the same vehicles across the globe with minor modifications rather than designing and engineering different cars for different regions.
GM, by nearly all accounts, is farther along in its globalization efforts than the other two, but all three remain behind their Japanese competitors – Toyota, Honda and Nissan.
