Ford Vehicle

Looking ahead, Ford has a relatively weak lineup of new or redesigned products for most of 2008. The compact Focus, on which Ford makes little or no profit, won’t make much of a dent. The all-new Flex, a crossover that replaces the minivan, will make a larger impact but it won’t be huge, at least initially. And while a redone version of Ford’s profit engine, the F-series, arrives late in the year, it will face a weak market for pickups and competition from the redesigned Dodge Ram.

General Motors, by comparison, has already launched the Cadillac CTS, the highest-volume model of this high-margin luxury brand, and is about to release the much-heralded Chevy Malibu. GM promises that the Malibu will be more profitable than its predecessor. While praising Ford’s better-than-expected results, analysts have been careful to point out areas where it’s falling short.

Jonathan Steinmetz of Morgan Stanley wrote that Ford’s inability to deliver any cost-related improvements was a disappointment, adding This suggests Ford will need to accelerate its cost reduction in…advertising, engineering, material cost and employment related items. Mark Warnsman of Calyon Securities, part of the Credit Agricole Group, made some sharper comments. Improvement in North America remains central to the recovery of both companies, he wrote.

And on this metric, General Motors is well ahead. Which is not to say that GM is cruising. In some biting remarks, Morgan Stanley’s Steinmetz pointed out that, while GM has reduced its benefits to hourly labor by $8 billion over the past five years, its pre-tax profits have declined. He noted too that, despite the new models, GM disappointed in the third quarter, its cash burn was worse than expected, and its mix was weakening on some of its new pickups and SUVs.