PAG Losses Mount

Ford Motor Co. reports a strong rebound in overall first-quarter profits, posting net income of $896 million, or $0.45 per share, compared with a $1.1 billion, or $0.61 per share, loss in like-2002.

The only disappointment comes from Ford's Premier Automotive Group, which reports losses of $88 million, vs. $70 million in red ink year-ago.

PAG's poor showing is a direct result of a weak overall performance at U.K-based Jaguar Cars, which continued to reel from the delayed launch of its flagship XJ sedan. Only 1,000 XJs were shipped to dealers worldwide in the first quarter. Some 4,800 were produced, with the balance still in transit.

Ford Chief Financial Officer Allan Gilmour points out that Jaguar was the only PAG operation reporting a loss during the quarter. Volvo Car, Land Rover and Aston Martin all were profitable, he says.

Ford is not retreating from previous predictions that PAG will contribute up to one-third of its overall profits in the future. Getting there, however, will require increased synergies across all Ford brands and commonization of components and platforms. “Fundamentally, if we are going to be as successful as we need to be in PAG, we will have to improve our commonality and reusability considerably,” Gilmour says.

“One of the great pluses of having PAG reporting to (Ford of Europe President) David Thursfield is to be able to use David's management leadership to make Ford of Europe and PAG work more closely together in purchasing, using facilities and things of that kind.”

Gilmour says Ford already is on track to realize more synergies between its PAG and Ford of Europe operations.