Yesterday, China's Zheijang Geely Holding Group purchased Volvo cars from Ford (F) for $1.8 billion. The Wall Street Journal, among others, is touting this acquisition as proof that China's economic rise is "reshaping large swaths of global business, as its huge market and increasingly powerful companies play a growing role in industries from cars to natural resources to telecommunications equipment."

Geely is the first Chinese company that will be in charge of a global auto brand. That said, I think we need to give some praise to Ford CEO Alan Mulally.

General Motors Corp. (NYSE: GM) and Ford (NYSE: F) are going in front of Congress today to ask for $25 billion worth of taxpayer money. (It seems they won't be flying in separate private jets.) GM will announce a reopening of its UAW contract and the winding down of its Hummer, Pontiac, Saab and Saturn brands. Ford will try to sell Volvo to the Swedish government. What's lacking from both plans at this stage is enough detail about cost savings to know whether taxpayers will get their money back.

As I posted, there is a $16 billion (in cost savings) six point restructuring plan which GM could have used, but it chose a different path. The six-point plan involved closing or selling the four brands and their related dealerships. GM's plan proposes to slowly wind down these brands and keep the dealers. It has been trying to sell Saab but no takers have emerged.

Moreover, GM workers remain higher paid than workers of its Japanese competitors. For example, UAW workers make an average of $76 an hour, including the cost of retiree benefits. Toyota Motor Co. (NYSE: TM) workers cost, all in, about $18 an hour less. It is unclear how much GM plans to cut from UAW pay by reopening the contract. Absent more details, today's GM restructuring plan does not provide a clear path to profitability.

After surprising investors with a profit when reporting the latest quarter, Ford Motor Co. (NYSE: F) now says it no longer expects to achieve its North American Automotive profitability goal for 2009.

"Rapidly rising commodity prices -- particularly steel prices -- and higher gasoline prices that are accelerating consumers' shift away from large trucks and SUVs together are having a tremendous impact on our sales, our manufacturing operations and our profitability as we look to 2009," said Mark Fields, Ford's President of The Americas.

Overall, he said, the company is expected to break even in 2009, with strong results in Europe and Asia.

"Unless there is a fairly rapid turnaround in U.S. business conditions, which we are not anticipating, it now looks like it will take longer than expected to achieve our North American Automotive profitability goal," Mulally said.

As it announced it wouldn't meet its long-held goal, Ford also said that to combat these "external forces" it would cut production through the remainder of this year of large trucks and SUVs while increasing 2008 North American production of some better selling models. Overall, though, there will be decreased production of vehicles from 16 million cars planned for 2008, to 15 to 15.4 million cars.

Ford Motor Co. (NYSE: F) is cutting production at its Volvo unit, according to The Wall Street Journal. The move, which could affect one-third of workers -- some 700 -- is seen as an attempt to cut the costs and losses at the upscale Swedish brand.

The question everyone is asking is whether this move is done in preparation for a sale. According to "people familiar with the matter" who discussed such things with the Journal, CEO Alan Mulally is interested in putting Volvo, whose sales have been declining, on the block. Of course, to analysts, Mulally sang a different tune last month, saying the priority is improve the Swedish auto maker operations "dramatically."

As Kirk Kerkorian's Tracinda Corp. continues to build its stake int he company, he may also have a thing or two to say on the matter.

For now, Volvo is cutting where it makes larger, less popular vehicles, and it plans to make fewer cars overall. But can this make Volvo more profitable for Ford, or at least more attractive to buyers? There are costs associated with producing a smaller number of vehicles, but with Volvo reporting 22,000 fewer vehicles sold during the first quarter, cutting production makes sense. Another matter Ford has to consider is the massive losses it suffered lately just from the kronor-dollar exchange rate.

Although Ford Motor Co. (NYSE: F) has not really been lighting up the sales board in recent quarters, CEO Alan Mulally seems to be on track to get the automotive giant profitable sometime in 2009. He may not have to worry about one specialized area within the Detroit auto giant, however. Can you guess which division that may be?

Try recreational vehicles. Ford's market share has increased in the motor home segment this year while its automotive market share has shrunk in several popular consumer vehicle segments. Although Ford doesn't brand motor homes under its own name, it makes more motor home chassis than any other U.S. company. Using chassis designed and built here in the U.S., Ford's no slouch when it comes to this niche automotive market. Ford makes the base chassis, which RV manufacturers then customize with a plethora of options (and weight) to market to customers.

Therein lies Ford's continuing market opportunity in this arena. The baby boomer generation is beginning to retire at rates that won't see slowdowns for over a decade. Are these folks going to buy RVs and tour the U.S. (and Mexico and Canada) at rates similar to the previous generation? The law of averages says that market will increase (hence the term "boomers) simply due to the large number of Americans (60+ million) in this age classification. Could Ford's savior partially be . . . motor homes? That's a stretch, but the company needs home runs any way it can get them. This is one of them.

From initial appearances, new Ford Motor Company (NYSE: F) CEO Alan Mulally is making great progress in turning around the fledgling automaker from a series of huge losses (quarters and years) into turning out vehicles customers actually want and are buying in decent numbers. The huge SUV and gas-guzzling full-size car that remained specialties of Ford for so long are being replaced by the Fusion mid-size/compact and smaller crossover SUVs like the Edge, according to recent monthly sales results. Mulally said recently that his "Way Forward" plan on revitalizing Ford is on track, if not slightly ahead of schedule. For Ford investors looking for good Ford news in the face of recent disastrous quarters and fiscal years, this is music to the ears.

Although Ford saw a 12% sales decline from January to May of this year, the automaker has made many right moves to correct the ship and get its product portfolio more competitive to Toyota Motor Corporation (ADR) (NYSE: TM), Honda Motor Co., LTD. (NYSE: HMC) and even Nissan Motor Co., LTD. (NASDAQ: NSANY). Mulally's "Way Forward" plan to get Ford back on track relies partly on product planning, getting unions to cooperate with business needs (always a nightmare), and competing with the newest #1 seller on the planet, Toyota. Neat job if you can get it, but as he said recently, he's making progress.

I'm not sure that changing the name of the Ford Five Hundred luxury sedan back to the venerable "Taurus" name will do anything but give the automaker good press, but who knows. At one point, the Taurus was the most popular sedan nameplate in the country, even selling more than the Toyota Camry (the Taurus did this for years). Mulally says that Ford is on plan with regards to the company's turnaround, and he's probably right about that. Sometime in 2009 Ford should be profitable again, according to Mulally. But, until then, there's quite a bit of hard work left to be done.

Brent Wilsey, a registered investment advisor, operates Wilsey Asset Management. One sector he focuses on is autos. Here's an interview with BloggingStocks.com:

What do you think of the new leadership at Ford?

I hope for the best but fear the worst. Mr. Alan Mulally from Boeing has a very good track record, but at Boeing they had one competitor, Airbus, now he faces the forces of Toyota and Honda just to name a few. Look at how strong the Korean car makers have come on. And, in the years to come, we will see cars from China as well. I'm afraid this will give the stock a short term increase, but after the excitement dies down and investors realize it will take years to turn this company around -- not days -- the stock will probably fall again.

There are rumors that Ford may go private. What's your take?

Ford currently has $153 billion in debt. So, to take this company private would make little sense. After all, with the current value of the shares outstanding at $16 billion, why spend $16 billion to take on $150 billion in debt? The company is currently losing money along with market share.

Of course, there has been a shift in the auto industry over the years. Toyota and Honda have come here to the US to build better cars for less. It also helps that they don't have the heavy labor contracts.