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Automotive Guide Auto Industry's 'Big 3' Loses Billions

By: Tracy Dawson
Automotive Guide

The 'Big 3' of the auto industry is currently facing the crucial years of their existence. Hard days are triggered by the rising costs and their waning sales. Hence, these automakers are racing to rebuilt the ruins and reconstruct their flagging businesses. Consequently, analysts say that the emerging front-runner among the big three is General Motors.

Earlier, GM reported lower quarterly earning loss of $115 million compared with $1.7 billion loss in the previous year. Analysts also noticed that GM is now reaping the fruits of its restructuring plan. According to Robert Toomey, chief equities strategist at E.K. Riley Advisors in Seattle, "So far GM is the only one that can be described as in turnaround mode."

Ford is not on the road to recovery yet. Said automaker is just starting its 'Way Forward' plan so far; Ford has lost a remarkable sum worth $5.8 billion. Chrysler, on one hand, reported $1.5 billion operating loss.

"If the Big Three were running a 26-mile marathon, GM would be near Mile 20, said Rebecca Lindland, an auto analyst at Global Insight. “Right now, GM is really gaining ground, while the other two are falling behind. GM has been exercising a tremendous amount of financial discipline and so is in good shape for 2007. That doesn’t mean they will start showing profitability right away, but they are doing great when you compare them with a company like Ford, which in this race is only just leaving the starting line.”

Among the three automakers, Ford's loss is the biggest for more than 14 years now. Lindland pointed out her grave concerns about Ford which include its ability to generate revenue. This is because some of the car maker's vehicles are not selling well. These vehicles include Ford Fusion, Mercury Milan, and Lincoln MKZ. Ford auto parts as well as that of Milan and MKZ need a timely boost to compete well in the market.

Ford F150 pickup parts, which make-up the best-selling vehicle of the automaker, are facing serious competition. Moreover, Fort has to take extra effort to defend its standing in the pickup truck segment since it is the bread-and-butter of the company.

Tracy is a 29 year old researcher and writer from Dallas, Texas with extensive experience in writing auto-related articles and covering automotive related events. She is currently a contributing writer for a leading automotive e-zine. You can visit Ford auto parts or Ford F150 pickup parts for more information.

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