Like the little engine that could, automaker Ford
Of course, that the iconic brand that once defined the automotive world can be compared to a "little engine" says a lot about how far the offspring of Henry Ford have fallen.
Still, investors can't help but be cheered by the prospect of the car maker's turnaround finally gaining traction. Ford has been battling General Motors
For its part, Ford has seen real improvement in the all-important North American market. Analysts are now becoming believers, too, thinking that if this quarter is any indication Ford may be able to achieve its goal of domestic profitability in 2009. That had seemed like a pipe dream only last year, but as it moved to cut costs and trim assets to focus solely on its core brands, the potential for success looms larger.
Not that all is green lights and flat pavement for Ford. Sales of cars are still moribund, and if you exclude car sales of Jaguar and Land Rover, two luxury brands it has agreed to offload to Tata Motors
GM once again lost the title of top car seller to Toyota
On the other hand, the successes Ford has achieved are primarily through cost cutting. But you can trim the fat only so much before you need to race the engine of sales, and Ford looks ready for that stage. The Edge and Focus have been enjoying sales success, and a commitment to concentrate on only Ford products (it's rumored Ford wants to sell Volvo and retire the Mercury line) should pay off.
Much of the thanks investors need to give should be directed to the United Auto Workers who've been asked to give up a lot to help Ford survive, including smaller staffs, plant closings, and lower pay for new hires. At times obstinate and standing in the way of the car maker's efforts at survival, the unions have been full partners in this turnaround.
Despite surging oil prices, Ford's efforts look as though it has finally found the way forward.
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Fool contributor Rich Duprey owns shares of Ford but does not have a financial position in any other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.