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Thread: Ford surprises with $1B profit; sees profit in '11

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    Elite Member celeb_2006's Avatar
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    Default Ford surprises with $1B profit; sees profit in '11

    Ford surprises with $1B profit; sees profit in '11 - Yahoo! News
    DEARBORN, Mich. Ford, the only Detroit automaker to dodge direct government aid and bankruptcy court, surprised investors with net income of nearly $1 billion in the third quarter and forecast a "solidly profitable" 2011.
    The automaker said Monday earnings were fueled by U.S. market share gains, cost cuts and the Cash for Clunkers program, which drew flocks of buyers to showrooms this summer. Ford's shares rose 68 cents, or 9.8 percent, to $7.68 in morning trading.
    The latest results signal that Ford's turnaround is on more solid ground. The company lost more than $14.6 billion last year and hasn't posted a full-year profit since 2005. While it made a profit in the second quarter, that was mainly due to debt reductions that cut its interest payments.
    Ford, based in Dearborn, Mich., reported third-quarter net income of $997 million, or 29 cents per share. Its profit forecast for 2011 was a step above previous guidance of break-even or better for the year.
    Ford's key North American car and truck division posted a pretax profit of $357 million, the division's first quarter in the black since early 2005. Ford cited higher pricing, lower material costs and increased market share for the improvement.
    Excluding one-time items, Ford earned 26 cents per share, blowing away analysts' expectations of a loss of 12 cents.
    The earnings came despite an $800 million revenue drop. But Ford said it cut costs by $1 billion during the quarter, accomplished through layoffs in North America and Europe, reduced pension and retiree health care costs and improvements in productivity and product development.
    Chief financial officer Lewis Booth said the company took in $1.3 billion more than it spent in the quarter, an improvement over its $1 billion cash burn in the second quarter.
    "That's a huge deal," Booth said.
    Ford's plan to create demand and get better prices for its products, coupled with cost cuts, gave the company confidence that it will make money in 2011, Booth said.
    But Ford still faces obstacles in its turnaround. Last week, workers overwhelmingly rejected an agreement with the United Auto Workers that would have brought Ford's labor costs in line with rivals General Motors Corp. and Chrysler LLC. Workers objected to clauses limiting their right to strike and freezing entry-level wages, and felt the company was healthy enough and didn't need further concessions.
    The rejected deal also would have changed rules so skilled tradesmen such as electricians and pipefitters work in teams and perform more than one task.
    Rejection of the deal isn't likely to place Ford at an immediate cost disadvantage to its crosstown rivals because savings from the concessions are longer-term, said Gary Chaison, a professor of labor relations at Clark University in Worcester, Mass. Neither the company nor the UAW has released any cost savings numbers.
    The third-quarter profit makes it extremely unlikely that the company will push to head back to the bargaining table before the current UAW contract expires in the fall of 2011, and union leaders also are unlikely to take another deal to the membership, Chaison said.
    "I think the company has no credibility asking for concessions now, and I think the leadership is quite embarrased for making a case for concessions," he said.
    Chaison said Ford could make some noise about moving new vehicle production to Canada, where unionized workers on Sunday approved a package of concessions, but it's more likely that Ford will live with the current contract until 2011.
    The other area where Ford has a cost disadvantage is debt. Ford reported $26.9 billion in debt, up $800 million from the second quarter.

    The company avoided the same fate as rivals Chrysler and GM by mortgaging its factories and even the familiar blue oval logo to borrow $23.5 billion before credit markets froze last year.
    Ford didn't quantify the impact of Cash for Clunkers, which offered buyers rebates to trade in their vehicles. The program helped Ford cut costly incentives and raise production.
    It also won buyers; the fuel-efficient Ford Focus sedan and Ford Escape, a small SUV, were among the top five sellers under clunkers. Ford sales climbed 17 percent in August thanks to the program.
    Ford's revenue fell $800 million for the quarter, to $30.9 billion, due mainly to its financial services arm, Ford Motor Credit, making fewer loans.
    But the division still posted a pretax profit of $677 million, and revenue from auto operations rose slightly to $27.9 billion. Ford also has benefited from consumer goodwill after it declined government bailout money and didn't go into bankruptcy over the summer as GM and Chrysler did. Ford grabbed sales from its rivals, posting the largest increase in market share of any automaker in September. Ford expects an overall gain in U.S. market share in 2009, a feat it hasn't accomplished since 1995.

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    Elite Member Brookie's Avatar
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    YAY! My pension is funded for another couple of years!

    And congratulations and waytago, Ford.

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    Elite Member lurkur's Avatar
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    Vomit. No one cares about the people, just the profit. I like when they blame union workers for wanting decent money for their labor-intensive and sometimes risky or unhealthful jobs, but the execs bounce bonus after bonus off each others' asses in some high-rise penthouse office or exotic locale. They could create smaller fuel-efficient cars sized like the Smart Car with longer ranges, better for the environment, less pollution for people to gag on, and it would fill a vastly growing market--people willing to commute ever further for jobs, and can't freaking afford a full sized vehicle, nor the associated fuel costs. It'd put engineers and laborers to work and make the roadways less crowded and polluted. It's nice that they get to wave around a "green" SUV (oxymoron?) and a fat profit (at buyers' and taxpayers' expense... shhhh), but they need to get real already.

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    Gold Member JerriBlank's Avatar
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    The earnings came despite an $800 million revenue drop. But Ford said it cut costs by $1 billion during the quarter, accomplished through layoffs in North America and Europe, reduced pension and retiree health care costs and improvements in productivity and product development.
    I'm sure these people are so very happy for Ford.

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    Why do I get the feeling that the recession and budding recovery are just another excuse to ass-rape the American worker?

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    Elite Member LynnieD's Avatar
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    I dont give a shit---I'm happy to hear some fucking POSITIVE NEWS for once. Its all gloom and doom. And I totally feel for people that are in that.....I DO!!!
    But, at least this is something to go on!

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    Elite Member B.C.'s Avatar
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    Quote Originally Posted by Brookie View Post
    YAY! My pension is funded for another couple of years!

    And congratulations and waytago, Ford.

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    Elite Member Chilly Willy's Avatar
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    Congrats. Improving the earning by firing people = two thumbs up.
    Hello mother fucker! when you ask a question read also the answer instead of asking another question on an answer who already contain the answer of your next question!
    -Bugdoll-



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    Elite Member darksithbunny's Avatar
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    I believe it. Every time I go to the dealer to look at the car I am interested in buying, the lot guy goes, "We just sold em!"

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    Elite Member RevellingInSane's Avatar
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    Firing people and negotiating for concessions is horrible for the workers, but if Ford totally tanked, how many more would be out of jobs? If it can stay on this course of increasing revenue and offering increasingly better cars, it has a chance to not only dig itself out of this hole, but grow, which would create more jobs.

    The 2010 lines are much more impressive than even the written specs pointed to. There are only two hybrids offered right now, but hopefully they add more soon. The release of the new Fiesta next year may be good for sales as well. They screwed up and it is going to take time to rectify years of misguided decisions.



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