Carmaker Ford made $357m pre-tax profit in north America – Ford profits in Europe rise to $193m from $69m
Ford said on Monday that it had returned to profit in north America for the first time in over four years, a milestone for the carmaker, which has lost billions of dollars in one of the toughest periods in its history.
The carmaker reported group-wide earnings of $1.1bn for the third quarter and raised its forecasts, suggesting the company would be "solidly profitable" in 2011, instead of merely breaking even as previously
predicted. The company lost more than $14.6bn last year.
The United States has officially emerged from recession but the improvement at Ford was of special significance, indicating that the business might finally have turned the corner. Alan Mulally, chief executive, said the results showed the company was making "tremendous progress".
The carmaker, which lost $2.8bn in the same quarter last year, said the better performance was driven by gains in market share, reduced costs and the "cash-for-clunkers" programmes run by a number of governments to stimulate sales of new cars. The north American car and truck division posted a pre-tax profit of $357m, compared with a loss of $2.6bn a year ago, its first quarter in the black since the beginning of 2005. Profits in Europe rose to $193m from $69m.
The company also said it had moved into positive cash flow of $1.3bn during the quarter, having burned through $4.7bn in the first half. "That's a huge deal," said the chief financial officer, Lewis Booth. Ford shares were 9% higher in early trade.
Ford has managed to survive without a government bailout, unlike its rivals General Motors and Chrysler. But the company still faces challenges, including an ongoing dispute with the United Auto Workers union over pay and conditions.
In the near term, Ford said sales are expected to suffer in Europe, Germany in particular, as the government incentive schemes come to an end.
The company also noted that recovery in the US and the UK economies was expected to be slow.
Copyright: Guardian News & Media 2009
