Chet Richards

[Update: Ford Motor Company earned $100 million in the first quarter, compared to a loss of $282 million in the first quarter of 2007.]

Back in January, I reported on a conversation that Ford CEO Alan Mulally had with Kai Rysdahl on Marketplace. It seemed to me that he was not only making good moves, but making them for the right reasons.

Now it appears that Ford will continue to show progress when it releases its quarterly earnings tomorrow. As Mike Spector writes in today’s Wall St. Journal:

Still, Mr. Mulally, 62 years old, has managed to improve the bottom line during the worst auto-sales downturn in more than a decade, while shifting Ford’s vehicle mix away from fuel-thirsty trucks and SUVs. In 2004, Ford relied on large trucks and SUVs for 70% of sales; in March that number was 43%.

One quarter, or even a couple of years (Mulally came to Ford from Boeing in 2006), do not a recovery make, of course. But there are more signs of life. As Spector noted:

But in the past year, Mr. Mulally, a former Boeing Co. executive with no auto experience, has improved year-on-year earnings each quarter. In 2007, Ford startled the industry by reporting $400 million in positive operating cash flow, something General Motors Corp. and Chrysler LLC have been hard-pressed to match.

At the same time, the quality ratings of Ford vehicles spiked (a trend that started before Mr. Mulally arrived) and now approach the lofty levels of Toyota Motor Corp. That chopped $1 billion off Ford’s warranty costs last year.

And made for a lot more loyal customers.

Improving both cost and quality is an indicator of lean concepts taking hold. So far so good.