Earnings by the Big Three are running at or near record levels, with the bulk of those earnings coming from the light truck side of the market.
Light trucks continue to gain share, delivering extremely high margins in the process.
But recent gasoline price hikes and growing environmental and safety concerns could cloud this segment's long-term future. Because they create an environmental Hobson's Choice that the green-minded William Clay Ford, Jr. isn't comfortable with. In unusually candid comments made during the automaker's annual shareholders meeting, the great-grandson of Henry Ford acknowledged that SUVs guzzle gas, spew toxic emissions and pose a danger to drivers in smaller vehicles. While friends and foes alike debate the merits and motives behind Ford's speech, his comments will clearly compound concerns over the auto industry's most profitable product segment. That's good news for the Big Three, which dominate the light truck segment, and enjoy its high returns.