American auto maker Ford Motor (NYSE: F) gave investors a reason to smile this morning when it posted a surprising $1 billion profit for its third quarter.

Going into this morning's earnings release, analysts had expected to see the Dearborn, Michigan-based auto manufacturer to lose 12 cents per share. But Ford had other ideas, posting a profit of 29 cents per share, or $997 million.

China has taken its first major step into the U.S. car market as General Motors announced it had finalized a deal to sell off its Hummer truck brand to Chinese auto manufacturer Sichuan Tengzhong Heavy Industrial Machinery.

Under the deal, GM will continue to make the trucks no later than 2010. While a deal has been reached, it is still going to be up to Chinese regulators to approve the deal and decide if the brand can be profitable and fit into the country's overall national strategy to improve energy efficiency.

It should not come as too big of a surprise, but American auto maker Ford Motor (NYSE: F) announced today that its sales fell by 5.1% in September.

Following this summer's widely popular "cash for clunkers" program, it was some what expected that demand would weaken during September as so many people had just recently purchased new cars to take advantage of the government program.

The government's "cash for clunkers" has been far more popular than anyone thought, prompting General Motors to boost production at several factories to keep up with demand.

While not everyone is so convinced that the "cash for clunkers" program is good for the economy, there is no doubt that the big American car makers are enjoying the benefits. Five days ago I wrote about the decision by Ford Motor Company (NYSE: F) to boost production by 15% above its prior estimates, and today General Motors announced it will raising output and bringing back employees that it had been forced to lay off.

There has been a lot of debate over the past couple of months over General Motors Corporation (NYSE: GM). What would be best for the company? Government bailout money to help avoid bankruptcy, or should we allow the company to go through bankruptcy proceedings?

If you are on the side of the argument that thinks GM should enter bankruptcy, well, you are about to get exactly that. According to Bloomberg, General Motors plans to file for Chapter 11 bankruptcy on June 1.

For years China has been the world's leading manufacturer, and they are hoping to take that momentum into the auto industry.

When you think of foreign cars you would like to own, chances are that it is not a car made in China. The Chinese have fallen behind on gas powered cars, so they made a brilliant decision... just try to be the leader of the next industry evolution. They are looking at hybrid and electric powered cars.

I realize it goes without saying, but times are tough for American auto makers, really tough in fact, and for Ford (NYSE: F), the company does not see things changing any time soon, and is predicting another disastrous month for December sales for the ailing auto industry.

The company announced today that it believes when final December sales figures are released, we are going to see a horrible month, with Ford estimating that industry-wide, December sales will probably be around 35% lower than the same period last year.

When you consider the estimated December numbers you can start to get a feel for just how bad 2008 has been. Consider this: in 2007, industry-wide sales of light vehicles in America totaled 16.2 million. In 2008, that number is expected to drop dramatically down to around 13.2 million light vehicles in reaction to lower consumer spending and tightened credit lending.

There is no question about the troubles that the American auto makers have been dealing with, and things are not looking too bright for their overseas competitors as well. Toyota (NYSE: TM) announced today that November was another tough month for the Japanese auto maker, as the company witnessed the largest monthly decline in sales for the past 8 years.

During the month, Toyota saw its global sales dip by a massive 21.8%, and highlights the bad news that the company shared with the market earlier this week that 2008 would mark the first time in the past 70 years that the company would be reporting an operating loss for the year.

Earlier this year, the Japanese auto makers had appeared to be somewhat insulated from the slowdown that American makers General Motors (NYSE: GM) and Ford (NYSE: F) were dealing with. The main reason why the Japanese makers were able to weather the storm a bit better was their strong reputation for producing better, more fuel efficient vehicles. While this perception kept the Japanese auto makers stronger for the first part of the year, the overall economic slowdown and credit crunch have been taking their toll recently on all auto makers, the Japanese included.

August was yet another tough month for American auto maker Ford Motor Company (NYSE: F) as the company reported today that during the month, U.S. sales were off by a mind boggling 26.5%.

During the month, Ford was able to sell a total of 155,172 light vehicles, which was 3.6% below July's figures of 160,990, which was the worst month for U.S. car sales in the past 16 years.

As expected, truck sales really took a beating last month for the company. With consumers dealing with record high gasoline prices, truck sales have been weak for some time now, and last month the company saw truck off by more than 32%. Its car sales fell by nearly 9%.

Before the market opens tomorrow morning, American auto maker Ford Motor (NYSE: F) will be reporting its second quarter numbers. Wall Street is not looking for a great quarter from the company.

Analysts on average expect the struggling auto maker to post a loss for the quarter of 25 cents per share, and revenues totaling $34.6 billion. The last time that the company reported earnings was back on April 24 when it shocked Wall Street with a 5 cents a share profit versus consensus estimate for a loss of 16 cents for its first quarter.

This quarter has proven to be tough for the company, which recently posted pretty bad June sales figures. In fact, sales for June declined by a devastating 28% compared to the same period last year.

Some more bad news for American car maker Ford Motor (NYSE: F) as the Detroit auto maker announced it would be reducing its salary workforce by upwards of 12%.

The move came about a week after the company announced that it wouldn't be able to meet its goal of returning to profitability next year due to the current economic slowdown. A factor leading to the company's problem has been a shift in consumer preference from trucks to smaller, more fuel efficient vehicles, a move that comes in reaction to the current record high gasoline prices that have spread across America. Ford said last week it was forced to cut SUV production.

Ford has not released any specific details on the job cuts, but the details are expected to be released sometime in July. The company currently has 24,300 salaried workers in the United States, Canada and Mexico.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

Ford Motor (NYSE: F) announced today that it plans to produce fewer cars during the first quarter this year than it did last year.

The company announced yesterday that it now expects to build 685,000 vehicles in North America during the quarter, a drop of 55,000 from the same period last year. That works out to a 7.4% decline.

Ford plans to improve its North American sales results in 2008, but still plans on seeing losses again this year. The company is in the middle of a turn-around plan that it thinks will take it back into profitability next year.

It has definitely been a tough run for the struggling automaker, and it is now predicting that it will have a 14 to 15% market share in the U.S. with its Ford, Lincoln and Mercury brands during the year.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

In 2006, Chrysler (NYSE: DCX) lost $1.5 billion as the company failed to adapt to changing trends in the auto industry, focusing on minivans, pickups, and sport utility vehicles. By way of explanation, Chairman Dieter Zetsche offered this, which is probably one of the dumbest quotes I've seen so far in 2007:

"The crucial factor was the unforeseeable shift in demand to smaller, more fuel-efficient vehicles, which was triggered by increased gas prices in the U.S." (emphasis added)

Wow. What's next? Will people continue to buy dog food that kills their pets? Will Atari explain the declining sales of the Atari 2600 by saying that "the crucial factor was an unforeseeable shift toward higher quality, more enjoyable video games"?

All I can say is that if the chairman of an automobile manufacturer considers the shift toward smaller cars in light of rising gas prices as unforeseeable, the company probably needs new leadership.

On April 5th, Kirk Kerkorian offered $4.58 billion for the company, so maybe change is on the way.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and watch out for more Battle of the Brands posts.

The sad part about this subject is watching these two companies going in almost opposite directions -- at least for now. General Motors General Motors Corp. (NYSE: GM) has a current market capitalization of $18 billion versus the behemoth Toyota Motor Corp. (NYSE: TM) with a massive market capitalization of $236 billion, over 13 times bigger than GM. Yet on the surface one would never guess these numbers as their revenues are fairly close in comparison: GM for 2007, estimates revenues of $173 billion, and Toyota's at $200 billion.

It's what's underneath the hood that distinguishes these companies.

Toyota has just come off a five-year period of growth in its per-share earnings at 26% per year, an astounding accomplishment for such a large company. General Motors has experienced flat to negative earnings per share growth over the same five-year period. Toyota is opening new plants, both in Japan and the U.S., to handle demand, while General Motors is closing plants to save costs and resources.

Toyota has set itself apart as the undisputed world leader with the hybrid auto: half combustible engine, half battery powered. The hybrids are still at a price premium to comparable standard combustible, gasoline-powered models, but they will close that gap over the next two or three years. The hybrids come in luxurious lines of the Camry, the Highlander SUV, and the Lexus RX series, as well as the economical Prius model. GM has yet to enter the hybrid field in a serious way.

U.S. stock markets are posed to open down as Wal-Mart Stores Inc. (NYSE:WMT) released its worst same-store sales figures in 25 years and new data underscored the weakness in the housing market. DaimlerChrysler AG (NYSE:DCX) also is expected to announce big cutbacks at its Chrysler unit.

Wal-Mart, the world's largest retailer, said January sales rose 2.2 percent, following a poor holiday season. The company has reshuffled its management ranks as it looks to regain lost traction against rivals including Target Stores Corp. (NYSE:TGT). JP Morgan Securities analyst Charles Grom told clients Saturday that Wal-Mart will "continue to face an uphill battle versus Target and other moderately priced department store chains," according to the Wall Street Journal (subscription required).

Two Detroit newspapers are reporting that DaimlerChrysler is expected to announce plans to cut 10,000 jobs and close three U.S. factories as it tries to become more competitive, according to the Associated Press. There also will be closer ties between the company's Chrysler and Mercedes Benz units.

Oil prices are expected to rise as a cold snap hits the Northeast. and the dollar was mixed in trading against currencies in Europe. Economists are expecting that a key measure of service industry growth will show that increased consumer spending is boosting economic expansion, according to Bloomberg News. The Institute for Supply Management's index of non-manufacturing business is expected to jump to 57 from a revised 56.7 in December, according to a survey of economists by Bloomberg.

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