From L to R: Alan Mulally, Sergio Marchionne, Ed Whitacre
Compared to one year ago, Detroit”s big three automakers are showing a shocking turnaround. While Chrysler has only shown a slowing of their financial hemorrhage, Ford reported profits of $2.1 billion, and GM, despite not having yet reported a profit, has managed to pay off its $5.8 billion treasury loan early.
Though these numbers certainly paint a promising picture, experts remain skeptical. “I think for all three, this is a fragile recovery,” said Michelle Krebs, senior analyst for Edmunds.com. “We’re looking at an April where sales are down from March, and we don’t see the second half sales that robust. It’s going to be a little bumpy.”
The biggest challenge now for Chrysler is their lack of products in the pipeline; GM and Ford have considerably more vehicles set to rollout, while Fiat predicts that it will be a few years before we see a relevant influx of vehicles. Ford mentioned that its debt is still a weighing factor, as it was not able to clear the debt that GM and Chrysler did by declaring bankruptcy.
Experts agree that it is imperative for automakers to operate leaner than in the past. Recent factory closings have enabled the manufacturers to save large amounts of money, and one expert believes that Toyota”s recent problems will effect Perception of quality of domestics versus imports.
– By: Stephen Calogera
Source: CNNMoney