WSJ Online / Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved / By Sharon Terlep and Neal E. Boudette
Ford Motor Co. surpassed General Motors Co. in sales last month for the first time in at least 50 years, presenting a new headache for the government-owned car maker as it struggles to return to profitability.
Hours after the sales results were disclosed Tuesday, GM announced an overhaul of its top managersthe second executive shuffle in three months. The news underscored the impatience of GM Chief Executive Edward E. Whitacre Jr. and the heat the company is feeling from a resurgent Ford.
Ford said it sold 142,006 cars and light trucks in the U.S. in February, 43% more than a year agoand 471 more than GM. While Ford's results were boosted by sales to rental-car companies and other fleets, it was the first time since at least 1960 that Ford outsold its larger rival except for two months in 1998 when GM was hurt by strikes, according to Edmunds.com, an automotive data provider. GM's February sales rose 11.5%, to 141,535 vehicles.
GM executives have been feeling pressure to keep pace with Ford's sales and market-share gains, people familiar with the matter said. In recent weeks, Mr. Whitacre and his North American president, Mark Reuss, began considering changes to boost the company's performance.
Tuesday, Mr. Reuss took responsibility for U.S. sales from Susan Docherty, a vice president who had headed both sales and marketing and now will oversee only the latter. A host of other changes were made among managers who report to these two executives.
In a conference call to discuss the revamping, the 46-year-old Mr. Reuss said he "could see clear as day that the mix and the structure of people just wasn't right. These changes were necessary for GM to move faster and win. We need people who are change agents."
Mr. Whitacre predicted in January that GM will return to profitability this year, but the company has failed to make the progress in boosting sales he had hoped for, according to people familiar with the matter.
"We are not moving fast enough or with enough success," Mr. Reuss said.
While Ford sold about 56,000 cars last month to fleet customers, which can hurt auto makers because rental cars eventually are resold as used vehicles that can depress new-vehicle prices, the auto maker has also done a number of things right.
The biggest is that Ford didn't seek government help or bankruptcy protection last year. That won the favor of some consumers. Ford also maintained its financing arm while GM sold control of its GMAC; that allowed Ford to keep offering attractive financing on its models while GM has had difficulty lining up consumer loans.
One reflection of Ford's new standing: In February, its "retail" salesthose to individual customersrose 28%. And its U.S. market share climbed 3.8 percentage points from a year earlier to 18.2%, according to Autodata. GM's share was 18.1%, down two-tenths of a point from a year ago and 2.9 points from January.
Ford also has done a better job than GM in keeping dealers stocked with hot vehicles, such as the Focus compact and Edge crossover. Shortages of certain GM models limited its sales in February, and led to complaints to senior executives by some dealers, people familiar with the matter said. GM's conservative forecasting was one factor that prompted the company's board last year to force out former CEO Frederick "Fritz" Henderson.
"Our sales were down because we were operating on an empty shelf," said Jerry Seiner, who has three GM dealerships in Utah. "If we'd have had the vehicles, there is no way Ford would have come close to us." Mr. Seiner said he ran out of Chevrolet Equinox crossovers and Suburban sport-utility vehicles in February. The dealership received a big shipment of vehicles over the weekend and on Monday had the best sales day in weeks.
Overall, February's U.S. auto sales rose 13.3% to 780,265 cars and light trucks, according to Autodata Corp. The rise came in comparison to particularly weak sales in February 2009, when the economy was deep in recession and GM and Chrysler Group LLC slid toward bankruptcy.
Car companies might have seen higher totals for February but snow hindered sales in the Northeast and Midwest. The seasonally adjusted annualized sales rate for February was 10.38 million vehicles. That is up from the year-ago figure of 9.17 million but down from January's 10.7 million pace. Pre-recession, the rate was 16 million or more.
Toyota Motor Corp. suffered because of fallout from its recalls and quality problems. Its sales fell 8.7% to 100,027 vehicles. Bob Carter, general manager of Toyota in the U.S., said the company launched new incentives to drum up sales. They include 0% financing for 60-month loans on most models, low-priced leases and two years of free maintenance for returning customers.
"Clearly, we have some work to do," Mr. Carter said. "We have stubbed our toe with regard to our image."
Chrysler's sales were flat at 84,449 vehicles, and a person familiar with the matter said at least half of its sales went to fleet customers. Chrysler doesn't break out its fleet sales.
The fleet business is one issue that overshadows Ford's recent hot streak. Unlike GM and Chrysler, Ford managed to get by without financial help from the government last year, and has won favor with American consumers since then. But 40% of all the vehicles Ford sold went to fleet customers.
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