AccessMyLibrary provides FREE access to millions of articles from top publications available through your library.
Original Source: FD (FAIR DISCLOSURE) WIRE
BRIAN JOHNSON, NORTH AMERICAN OEM & AUTO PARTS ANALYST, SANFORD C. BERNSTEIN & CO.: -- 20th annual Sanford C Bernstein Strategic Decisions Conference. I'm Brian Johnson. I'm the new analyst at Sanford Bernstein covering the North American OEM and auto parts industry, and we will be launching later this year.
We're very pleased to have with us today William C. Ford, Jr., Chairman and Chief Executive of Ford Motor Company. Bill joined Ford Motor Company in 1979, held a variety of positions in manufacturing, marketing, sales and product development and finance, was elected Chairman in 1999 and CEO in October 2001.
Bill's appearance with us today comes at a critical juncture in the Ford revitalization plan. Having stemmed the losses of $5 billion in 2001, Ford reported a $1.9 billion profit in first quarter 2004, although guidance is not to multiply by four. Among the issues facing the company now include the impact of rising gas prices, the impact of rising interest rates, the trade-off between pricing and market share and the potential lift from new products being launched in the United States and Europe.
We will have a formal presentation for about 25 minutes, followed by Q&A. And as in other sessions, you can use the index cards by your chair to submit questions. Barbara Gasper, Vice President of Investor Relations, will lead us through the Safe Harbor language.
BARBARA GASPER, VP OF IR, FORD MOTOR COMPANY: Before we get started I just wanted to remind everyone that this morning's presentation could include some projections about our future performance, and these are subject to the risks and uncertainties that are outlined in our SEC filings, 10-Ks, 10-Qs and 8-Ks. With that, I will turn it over to Bill Ford.
BILL FORD, CHAIRMAN & CEO, FORD MOTOR COMPANY: Thank you Brian and thank you Barbara. And thanks to all of you for having me here this morning.
As Brian mentioned, what I'm going to do is take you through briefly how I see Ford today and then talk about the future. I'd like to briefly cover our current status because I think that perceptions haven't really caught up with reality yet. But I want to spend most of my time this morning talking about where Ford is going because I'm very excited about our future.
In January of 2002 I announced a comprehensive plan to return Ford Motor Company to profitability. This plan drew on important lessons from our past and it focused on improving the fundamentals of both our automobile and our credit business. In the first year of the plan we made solid progress and we began moving in the right direction. In 2003 our progress accelerated. By working with our suppliers base we achieved record material cost reductions. We completed capacity reductions that made us more efficient and more aligned to the market. And we executed a number a highly successful product launches. Our quality and our customer satisfaction are now at their best ever levels.
As Brian indicated, in April we announced first quarter earnings of about 2 billion or 94 cents a share. It was the best quarter that we have had since we began implementing our plan and there was good news across the board. All of our automotive operations worldwide made a pre-tax profit. For the first time since 2000 our automotive operations earned more than our financial services, and that's a real accomplishment since Ford Credit earned 688 million in the first quarter and that was up almost $250 million from a year ago. Excluding special items our overall financial results improved by about 5 billion in two years, which is ahead of our plan. We've exceeded estimates for nine consecutive quarters. We have a strong automotive cash position of $26.5 billion in cash and marketable securities and short-term assets, and that was at the end of the first quarter. Now in April we raised our full-year guidance by 30 cents to a range of $1.50 to $1.60 a share excluding special items.
The first phase of our plan, stabilizing our business and getting it back on sound operational and financial foundations, is over. But before I move on to talk about the next steps of the plan, I want to make one thing very clear -- whatever we do in the future, we will never again abandon our intense focus on the fundamentals of our business. As you all know, our business has always been a cyclical one. But in my 25 years plus at Ford I've noticed a cycle within a cycle in our company. If you chart our profits over time against our strategy, you'll find kind of an intriguing trend that repeats itself time and again; when we focus on delivering great products to our customers our profits go up, but in the past when we were flush with cash we would change our strategy to one of diversification and we would go out and buy new businesses, and then we would lose our focus and we would lose money. And then in desperation we would refocused again on the car business and the cycle would begin once again. This has happened three times since I joined the company. It will not happen again. I will make sure that we keep our focus. And Jim Padilla, our new Chief Operating Officer, is frankly a pit bull. He has a relentless focus on the basics of our business.
Now please keep that in mind as I start to talk about what's next up for Ford Motor Company. We do have ambitious plans, but our vision of the future is built on a very solid foundation. We want to be the best automobile company in the world, and that means a world-class business structure, high product quality, strong relationships with our people, and obviously great products. So where we go from here? As I said, we're going to continue to build on the basics of our business. We're also going to find new ways to differentiate ourselves and to grow our business. That's what I'd like to spend the remainder of my time talking about.
One of the fundamental ways that we plan to differentiate ourselves from our competitors is by new technology. Ford has a history of bringing new technology to a mass audience, including new features that we popularized but we didn't invent. Among other things, we're currently developing technologies that address customer concerns about fuel prices, oil security, and greenhouse gases; technology that offers customers a no-compromise solution to these concerns.
Hybrid electric power trains and hydrogen power will become major competitive advantages in our industry. Ford Motor Company is at the forefront of this market changing technology. In fact, I consider it a key element in building our company for the future. It's a way to distinguish ourselves in an industry in which brand and product differentiation is becoming increasingly difficult to achieve. Our new Ford Escape Hybrid which will reach dealer showrooms late this summer is a good example of how we're making these plans a reality.
The Escape Hybrid created a sensation at the recent New York Auto Show. It is the cleanest and most fuel efficient sport utility vehicle in the world. It uses a combination of gasoline and electric power to deliver more than 35 miles per gallon in city driving. The hybrid system also meets the strictest emissions standards. The reaction to the Escape Hybrid has been stunning. The number of hits on our website has been remarkable, and 66 percent of those are current non-Ford buyers, and most of them are not current Ford …