Ford Motor Co. and General Motors had record quarterly earnings, which were not much of a surprise after especially strong light-truck sales.
Trucks were so strong, in fact, that GM decided it was not enough merely to add capacity for 250,000 vehicles off its new full-sized pickup platform this year, as planned.
'We're convinced we will need more still,' said GM CFO Mike Losh, in an April 15 phone interview. So GM announced April 12 it will invest another $400 million in its Arlington, Texas, truck plant, to build even more full-sized pickups and sport-utilities.
By 2001, GM will have nearly doubled its full-sized truck capacity compared with 1993, the company said.
GM had net income of $2.1 billion in the quarter that ended March 31, 28.6 percent ahead of the year-ago quarter. In the same period, unit sales increased only 6.2 percent. GM lost 1.4 percentage points of U.S. market share even as sales and profits grew.
'Strong demand for the products and improved cost structure are the key,' Losh said. He said sales would have been even better, but some pickups were in short supply.
Ford Motor Co. had record first-quarter earnings just under $2.0 billion, 17 percent higher than a year ago. Last year's first-quarter earnings beat a record that had stood since 1989.
'The industry certainly looks very strong for the rest of the year,' said Ford CFO John Devine.
He said the seasonally adjusted annual selling rate for the first quarter was a hefty 16.9 million vehicles, including medium- and heavy-trucks. That would be a light-vehicle annual rate of about 16.6 million.
The all-time actual sales record is 16 million, in 1986. The second-best year was 1998, at 15.6 million light vehicles.
Ford's industry sales forecast for 1999 was raised recently to about 15.7 million light vehicles. GM's forecast is about the same.
'There's an excitement about the auto industry, and it's not only trucks,' Devine said, in a press conference and conference call with reporters on April 15.
'There are the new hybrids, and I think we're also seeing a lot of cars at very attractive prices,' he said.
Ford closed its $6.5 billion deal for Volvo Cars on March 31, paying a first installment of $3 billion. So Volvo results were not reflected in Ford's first-quarter results.