Saturday, April 22, 2006

Zero Sum Gain

Ok here is an interesting fact. Ford is reporting a $1.2 billion dollar loss this year, larger than even GM, after making $1.2 billion last year in sales. So thats a zero sum gain, no loss no gain. Despite this failure in basic economics 101, Ford the boss continues to say he is going along with his winning formula. It's a result of following the "no guidance" formula of economics, which is like driving with no steering.

Ford financial downshift

One day after the also-ailing General Motors Corp. won investor and analyst approval in posting a $323 million first-quarter loss, the nation's second-largest automaker reported a $1.2 billion loss Friday.

The decline, Ford's biggest since 2001, compared with a $1.2 billion profit a year earlier. And it has analysts questioning the turnaround program the company announced in January.

"We believe implementation has been slow, and it could be some time before benefits are realized," Merrill Lynch analyst John Murphy said.

Still, Chairman and Chief Executive Bill Ford Jr. plans to stick with the program, which includes closing 14 North American plants and cutting as many as 30,000 jobs by 2012. Ford expects to trim 13,000 of those this year.

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