More trouble for the Big Three

By Elizabeth Strott

Another month, another round of dismal news for the U.S. auto industry.

Detroit's Big Three came out with sales figures for March today, and the picture was gloomy for all.

Ford Motor (F, news, msgs) announced first, reporting a decline in sales for the fifth month in a row.

Though better than what analysts had expected, sales were down 9% in March due to weak demand for the company's flagship pickup, the F-Series, and fewer fleet sales to rental-car agencies.

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Sales of Ford's F-Series trucks declined 15%. Car sales overall fell 14.6%, and overall sales of trucks and sport-utility vehicles were down 5.8%.

The problem, one analyst said, is that despite Ford's drastic cutbacks, the auto maker has failed to produce a product that consumers want to buy. "When you continue to diet and diet, you end up looking like Nicole Richie," said Rebecca Lindland, an analyst at Global Insight. "Eventually, you have to start working out."

Trouble at Chrysler, GM

Ford wasn't the only car maker with bad news today. DaimlerChrysler (DCX, news, msgs) also reported a decline in March sales today. DaimlerChrysler said U.S. sales fell 4.1% in March due to weak sales at its U.S. Chrysler unit. Sales at Chrysler fell 4.6% in March, offsetting a 1% increase at DaimlerChrysler's Mercedes division.

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And General Motors (GM, news, msgs) announced a 7.7% decline in March sales, with a 6.2% drop in sales from its dealerships.

Both GM and Ford are "really trying to remake their balance sheets," Lindland said. "They're getting into shape, and that (process) is never pretty to see." But GM is four years ahead of Ford in the process, Lindland added. "Ford still has some really tough years ahead."

Rivals show growth

The picture is decidedly rosier for Detroit's Japanese competition.

Toyota Motor (TM, news, msgs) announced today that it had seen a 7.7% sales increase in March.

"Toyota is continuing to put the full-court press on all competitors in the market, not only General Motors," Michael Robinet, an analyst at CSM Worldwide, told Bloomberg News today.

Honda Motor (HMC, news, msgs) is also expected to post gains for the month.

Many auto makers have suffered as consumers have turned away from trucks and sport-utility vehicles to more fuel-efficient and environmentally friendly vehicles.

Chrysler's annual meeting is tomorrow

When will Chrysler be sold? And to whom? Those are likely the types of questions DaimlerChrysler shareholders will ask CEO Dieter Zetsche at the company's annual meeting tomorrow.

But don't expect a quick answer, Lindland said. "I think we are going to hear 'no comment' in 14 different languages."

Since Zetsche first announced that "all options" were on the table for the struggling Chrysler unit in February, rumors have been circulating about a sale of the U.S. unit.

In late March, Canadian auto-parts maker Magna International (MGA, news, msgs) was said to be the first bidder for Chrysler. Magna was said to be partnering with an unidentified private-equity player to make a bid of $4.6 billion to $4.7 billion, according to KeyBanc Capital Markets analyst Brett Hoselton.

Since then, Cerberus Capital Management and the Blackstone Group have emerged as two other private-equity players interested in Chrysler. All three bidders were reportedly completing their offers late last week.

Shares of DaimlerChrysler have jumped 18% since Zetsche first announced that a sale of Chrysler was a possibility. Shareholders had been disgruntled about the company's share price since DaimlerBenz merged with Chrysler in 1998.

Ford's weakness hitting family fortune

Ford Motor's struggles have taken their toll on the Ford family, and not just its reputation.

The family's fortune has dropped by $581 million in just over five years, according to Fortune magazine. Since Bill Ford took the reins of the empire in 2001, the stock has plunged 40%, eliminating more than $10.3 billion in the company's market capitalization.

The company hired Alan Mullaly in September to replace Ford as CEO and to help turn things around, but Mullaly has seen little success. In late January, Ford reported its worst loss ever: $12.75 billion for 2006. Mullaly has been leading an effort to restructure the company since he took the helm.

Nearly one-half of Ford's hourly work force has accepted buyout offers or early-retirement packages that the company offered as part of its restructuring plan.

Ford has said it hopes the staff reduction will help the company return to profitability by 2009.