Ford is slowly pulling out of a prolonged slump.
Ford Motor Company [NYSE: F] today reported net income of $997 million, or 29 cents per share, in the third quarter.
The Dearborn based automaker attributed the improvement to new products, structural cost reductions and improved results at Ford Credit.
This is a $1.2 billion improvement compared with the same period last year.
Excluding special items, Ford posted pre-tax operating profits totaling $1.1 billion, an improvement of $3.9 billion from a year ago. This marks the company’s first operating profit since the first quarter of 2008. On an after-tax basis, excluding special items, Ford posted an operating profit of $873 million in the third quarter, or 26 cents per share, compared with a loss of $3 billion, or $1.32 per share, a year ago.
Ford’s North American operations posted a pre-tax operating profit of $357 million, its first quarterly profit since the first quarter of 2005. Ford South America, Ford Europe and Ford Asia Pacific Africa also posted pre-tax operating profits in the third quarter.
“Our third quarter results clearly show that Ford is making tremendous progress despite the prolonged slump in the global economy,” said Ford President and CEO Alan Mulally.
“While we still face a challenging road ahead, our One Ford transformation plan is working and our underlying business continues to grow stronger.”
Clearly, one large challenge Ford faces is a newly militant United Auto Workers Union, whose brothers and sisters have rejected proposed contract givebacks in spite of the recommendation of UAW leaders. The Ford strategy of separating itself as different from bankrupt General Motors and Chrysler has given workers the opportunity to pursue a different contract. The large salaries and bonuses paid to senior executives are particularly nettlesome to workers, as anyone who has spent any time on a factory floor knows.
Ford’s third quarter revenue was $30.9 billion, down $800 million from the same period a year ago. Automotive revenue is up $100 million from a year ago. This improvement was offset by a decrease in Ford Credit’s revenue reflecting a decline in receivables from lower levels of financing.
Ford reduced its automotive structural costs by $1 billion in the quarter, largely from lower manufacturing and engineering costs, which included benefits from improved productivity, personnel reduction actions primarily in North America and Europe, and progress on implementing its common global platforms and product development processes.
Ford finished the third quarter with $23.8 billion in automotive gross cash, compared with $21 billion at the end of the second quarter of 2009. Automotive operating-related cash flow was $1.3 billion positive during the third quarter of 2009, an improvement of $2.3 billion from the second quarter 2009. Automotive operating-related cash flow was $3.4 billion negative during the first nine months.
“The Ford team delivered another solid quarter of results with strong contributions from all our business regions,” said Lewis Booth, Ford executive vice president and chief financial officer. “Positive cash flow, a stronger balance sheet and a third quarter operating profit are evidence that Ford is meeting the global economic challenges.”
Ford said it remains on track to achieve or exceed all of its 2009 financial targets and almost all of its operational metrics. Ford said it would also continue to pursue actions to improve its balance sheet.
Ford expects full-year 2009 U.S. industry sales will be about 10.6 million units, consistent with the guidance previously communicated by the company. In Europe, Ford now expects that full-year industry sales will be about 15.7 million units, which is higher than it previously stated.
Ford expects fourth quarter 2009 production to be up compared with year-ago levels and third quarter 2009 production. This increase is to return to planned dealer stock levels and match production with market demand for Ford products.
Now what makes anyone to believe that Fords will get any concessions out of the blue collar worker while the CEO, Allen Mullaley is on TV telling everyone Ford’s is doing great and he is making $13.5 million a year. President Mark Fields flys home to Florida every weekend on one of many corporate jets and all 8th level supervisors and above are getting free cars to drive home at company expense. All this plus more while management is crying “poverty”. Give us a break! Even the people who don’t work for Fords in anyway can see this isn’t going to work out for management. What is wrong with “Equality of Sacrifice” ?????
Ken Zino’s Note:
The following statement is attributable to Joe Hinrichs, group vice president, Global Manufacturing and Labor Affairs, Ford Motor Company.
“We appreciate the UAW leadership for working with us to reach a tentative agreement on further modifications to our national labor agreement. Ford is disappointed that the additional changes were not ratified.
“In March, the UAW-Ford membership ratified changes to the 2007 UAW-Ford national labor agreement and the Voluntary Employee Beneficiary Association health care trust that went most of the way in moving Ford to competitive parity with foreign-owned automakers.
“The additional modifications we sought recently were designed to honor pattern bargaining and provide Ford with similar additional efficiencies as those ratified this year for our domestic competitors.
“All of us at Ford are absolutely committed to continuing to make progress on our transformation plan, and we will take the necessary steps to be competitive with the best in the business.
“Moving forward, we will work with the UAW to discuss the next steps to ensure Ford remains competitive so we can continue to make product commitments and invest in our manufacturing facilities here in the United States.”
“Moving Forward” with the Ford Motor Company and the new contract if they ever get one will have to include some “Equality of Sacrifice” with all members of management. The CEO is making $17.5 million cool ones, The President flys home every chance he gets and all 8th level supervisors are getting free cars to drive home. When management addresses this issue, then their will be a new contract….no until! Don’t cry “poverty” while all this is going on!
I was thinking about buying one of the Fusion hybrids. I liked the idea of an American made car that was competitive against the Honda and Toyota hybrids. Then I discovered that the Fusions are made in Mexico. No sale. I guess I’ll have to wait for Honda or Toyota to start hybrid production in the U.S. I’ll keep driving my Ohio made Honda Element until then.