Ford posts $1 billion profit in 3rd quarter

[Ohio XB]

http://news.yahoo.com/s/ap/20091102/.../us_earns_ford

Ford surprises with $1B profit; sees profit in '11
Associated Press


By TOM KRISHER and DEE-ANN DURBIN, AP Auto Writers Tom Krisher And Dee-ann Durbin, Ap Auto Writers – 46 mins ago
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.

(This version CORRECTS 5th graf that Ford's North American car and truck division posted the first pretax profit since the first quarter of 2005 sted company's first pretax profit since first quarter of 2005)





That's why they wanted us to vote "Yes" for the latest modifications to the contract by yesterday, because this news was coming out today. Even the US market posted a profit, and operating cost reductions in the 3rd quarter alone of $1 billion.


Steve

[GTJASE]

Good to see a turnaround, be intrestesting to see what the company posts at the end of the year though.

[Ohio XB]

I agree. Of course they won't be "in the money" but it will be another incremental improvement over the year before that should be pretty good news.


Steve

[GTJASE]

I suppose if they can survive this down turn and continue to pay the loans off in the process they'll end up in a pretty decent situation seeing as the other 2 are just about broke.

[russellw]

It's to the credit of the senior management team that they bit some of the harder bullets before the GFC really hit and were thus well progressed in dealing with the historical issues that were dragging all three of the traditional manufacturers down.

They aren't out of the woods by any means but they are certainly better positioned that either GM (who have ceased to be a public company in any sense of the term) or Chrysler (although the French tie is interesting for history buffs) and as long as they continue to make the hard decisions and build good product then we should see blue oval product well into the foreseeable future.

Cheers
Russ

[Fordman]

Yeah i agree, and great news, it's better than loss's i always see when i read these news articles.

[TUF_302]

Any profit is welcome, GM should be red faced that one of there biggest competitors is making profit in the same year they went bust!

[xbgs351]

Just 15 more year like this one to pay off last years debt.....

[Ohio XB]

Ford made this profit while paying on their loans is the impression I am under.

On CNBC news an analyst said that if Ford can make money in this sized auto market and this economy, then when the auto market recovers it will be making serious profits. Makes sense to me.

I will complain about Mulally now getting greedy with labor cuts of all kinds (personnel, wages, etc,) but I will also give him due credit for turning this company around. Without him I believe we would be gone.

Right now we are the most competitive of the American companies (productivity, quality, costs) and we are right there with the transplants, though an RDA report shows Ford as #1 in initial quality of all full-line auto manufacturers in the US, and now that the Fusion has been out long enough to qualify, Ford's long range quality has also been given highest ranks.


Steve

[Nikked]

This is the best news possible.

"Ford into the future!"

[SSD-85]

Whilst the good news may be short lived. It is still good news nonetheless. Hopefully we can see Ford Aus. follow suit. Given the article I read a month ago about Ford Aus. being caught off guard by a sudden jump in the demand for Falcons, having a back order by about 8 months, I'd say the message is finally hitting home here too...

[DC357]

I bet a lot of that profit came from parts, like bonnet cables :

[Tobey]

Originally Posted by DC357

I bet a lot of that profit came from parts, like bonnet cables :

Gotta make money some how...

[vztrt]

Ford outlook changed to posititve.

http://www.reuters.com/article/marke...0091102?rpc=44

[Iggypoppin']

Originally Posted by xbgs351

Just 15 more year like this one to pay off last years debt.....

i read that ford had already repaid quite a chunk of those loans, i don't think ohioxb said it but he might have.

i'd prefer ford have done that than go down the same path as chysler and GM. at least if you give ford money they can pay it back.

[Ohio XB]

Yes, Ford had informed me (not like they call me at home though ) that they had paid a substantial amount back on their $23.8 billion in loans. It seems to me that I remember hearing either Mark Fields or Alan Mulally say that they have paid back $10 billion of it, but don't quote me on that. I remember being pleasantly surprised at the amount though.

Ford has taken action with their loans that saves them $500 million a year just in interest alone. Add this to the more than $5 billion in cost cuts over the past 4 or so years and Ford has become quite frugal. Wait, since Ford said they saved $1 billion in operating costs in the 3rd quarter that would make $6 billion in operating cost savings.


Nice to hear about the uptick in Falcon sales.

I too am cautiously optimistic. This is great news and knowing things from the inside I can be confident of continued good news, even if it isn't THIS good. However, you never know how the economy, or customer habits, are going to go.

Ford will always have some debt. All auto manufacturers do. However, when Ford has these loans paid off, and their amount of debt is back to a business norm, Ford is going to be a money making machine.

Now I am just waiting to see how the public responds when J.D. Power announces results of their surveys that confirm the RDA surveys (they almost always do) that Ford has the highest initial quality. How long will it take for people to say "Damn.....I guess it's time to check out a Ford."



The latest modifications to the UAW contract were overwhelmingly voted down. There were three things that were the biggest concerns.

One was not being able to strike over wage and benefit "improvements", as it was worded, though it did not say improvements as deemed by which side of the negotiations, Union or Company. A lot was left open for interpretation. It could have meant improvements that the company would demand, which of course means lower wages and benefits, which would be an improvement to their business model. There are many retirees that DID go out on strike decades ago and sacrificed financially to assure we have this right to protect our wages and benefits. We couldn't tell them they did that in vane.

The UAW has not struck Ford as a whole (excepting one or two localized wildcat strikes) since the late 1970's. The company and the Union have a good relationship. Why are they suddenly concerned about us striking? What have they got in mind?

Another was to freeze the new hire's wages at the starting wage of about $14.50 an hour until 2015. This means that all those employees currently earning this amount, and all those that would be hired up to 2015 would stay at that amount of pay. Currently there is a cap where up to 20% of the workforce in a plant earns the "starting pay", and then when a senior employee retires, or dies, a starting pay employee can move up to that wage level. If we voted for this they would not be able to move up until 2015. As Ford's business improves between now and then new people will need to be hired and the percentage of people working on the line, making the cheap wage, would easily increase to over 20%. That's a lot of workers feeling that they shouldn't have to work as hard as the senior employee next to him that is making almost twice as much. This creates animosity.

As a point of fact, EVERYONE'S wages have been frozen since 2005. We voted and approved this then, and again in the 2007 contract negotiations. That freeze will be up in 2011 when this contract expires. It will be open for negotiation but I don't know if the Union will ask for an hourly pay increase. If I had to guess I would say no, they will not, but that would most likely be the last time. They might ask for the bonuses we gave up though (some holiday bonus, holiday pay, performance bonus).

The third thing was combining skilled trades classifications so that there would only be "Mechanical" and "Electrical" classifications. This would blur lines of demarcation and create anarchy over who would perform which tasks, which has an affect on how many tradesmen of a given trade would be needed. I have to admit that I don't know enough of how well this would work, or not, but I can already see the arguments and animosity that would arrise out of this practice. For example, even though I am a Toolmaker I know how to weld. We also have welders that would take exception to me welding. This is a simple example of an arm wrestling match. No matter the rules (one classification, "Mechanical"), there's the pride.


To tempt the members to vote for the modifications the company offered a $1,000 signing bonus and re-iterations of committments that were made in 2007 and in March 2009, even while we were being told the company was reneging on a contractual promise to build a new body shop at our plant. Yeah, they promised in the contract to build us a new body shop (ours is 18 years old with an original life expectancy of 5 years) and we were now being told this is not going to happen, even though it is in writing.

$1,000 and promises to keep promises, while they tell us they are breaking one today, doesn't hold a lot of weight.



Steve

[auxr]

Well done , at last a positive outlook that surely casts a ray of sunshine into the doom & gloom of the past twelve months. thanks Ohio XB for the updates - Falcon sales are on the increase, hopefully the trickle effect has started and will continue also for FOA. :

[Joe5619]

Very good new.. Lets hope Ford Aus contributed to this profit for the quarter.

Originally Posted by Scotty85

Whilst the good news may be short lived. It is still good news nonetheless. Hopefully we can see Ford Aus. follow suit. Given the article I read a month ago about Ford Aus. being caught off guard by a sudden jump in the demand for Falcons, having a back order by about 8 months, I'd say the message is finally hitting home here too...

Are you sure about the 8 month back order on Falcons.. Not sure that is right IMO.

[Ohio XB]

I posted what I did about the contract modifications because the press is making it out to be that because the modifications were voted down, now Ford is at a disadvantage to GM and Chrysler. Ford and the UAW started working on making Ford competitive in 2005 and a number of times since then, including the "transformational" (Ford's term) contract of 2007, and it has now been opened 3 times to modify it.

Here is a post I made at another message board. The poster I was replying to brought up some concerns that a lot of people have so I took the opportunity to address them:

************************

Joe G, you bring up some good points. No, I am not celebrating the end of bad times at Ford, just celebrating some good that IS happening. You bring up a lot of points that a LOT of American are thinking. I'll address each.

How much of that is recurring? Cash for clunkers cleaned out a lot of inventory. Sales of Volvo etc helped profits.

Recurring: Ford is selling vehicles for more money. People are adding more options and choosing to pay about $2,000 more for vehicles compared to last year. Incentives are also down.

Cash for Clunkers: Alan Mulally said on CNBC that even without C4C they would have made money. Sure, it helped, but it was not the only reason.

Volvo: Though there has been a lot of talk Ford has NOT sold Volvo yet, so there is no money from that. Yes, Ford is going to sell Volvo, but it hasn't happened yet, and cannot be factored into 3rd quarter earnings.

I don't see long term profits staying for quite some time.

Neither do I. I believe it will be shakey for the next year and a half. Ford has changed their outlook from "Profitable or break even in 2011" to "Solidly profitable in 2011." We'll see. The company IS in a great position though.

Plus - $1B profit on almost $31B in revenue is not exactly a huge profit margin.

That's exactly how you and I would think, but this is not unusual. Look at this report from 2007 where Ford was hailed for making profit. They made only $750 million on $44.2 billion. So, Ford is making more money on less income. These kinds of profit margins are similar at all auto manufacturers.

http://www.autoblog.com/2007/07/26/e...-of-750-milli/


PRESS RELEASE:

FORD REPORTS A NET PROFIT OF $750 MILLION

DEARBORN, Mich., July 26, 2007 - Ford Motor Company [NYSE: F] today reported a net profit of 31 cents per share, or $750 million, for the second quarter of 2007. This compares with a net loss of 17 cents per share, or $317 million, in the second quarter of 2006.

Ford's second-quarter revenue was $44.2 billion, up from $41.9 billion a year ago. The increase primarily reflected currency exchange, mix and net pricing improvements, partially offset by lower volume.

Plus, how many TENS of billions have they lost over the last few years?

A crapload, but remember, a loss is making one dollar less than the year before in the same period. For example, I made almost 20% more money last year than this year. That's almost a 20% loss.........but I still had money coming in, just not as much.

Also, Ford announced that they cut operating costs in the 3rd quarter by $1 billion. That brings the total operating cost cuts to $4.6 billion just this year.

Plus, how much debt do they have due to the restructuring and continuation of the modernization that they were behind on?

We were given this info a couple weeks ago and I was instructed that it was confidential. However, part of the $23.8 billion loans have been used for that, plus Ford finally received dispursement of funds from the Department of Energy, that was approved over a year ago, for modernization for more fuel efficient vehicles; R&D and manufacturing processes.

"The company's debt remains a concern. It rose by $800 million from the second quarter to $26.9 billion. And it will grow again as Ford contributes to the United Auto Workers-run health care plan for retirees. GM and Chrysler were able to shed much of their debt in bankruptcy court."

The "UAW-run healthcare plan" is NOT run by the UAW. There is an independent third party that adminstrates the plan.

The VEBA, which is the healthcare plan, was requested by FORD. Ford Motor Company approached the UAW to set up a VEBA plan to handle healthcare for the retirees as it would help Ford's books. It was the COMPANY'S idea and desire. As such, they also worked with the UAW on how to initially fund the program and Ford knew how it would go. They agreed to the final language and terms, an initiative they undertook. Now they just need to follow through.

GM and Chysler went through bankruptcy. I have no idea how their VEBA's are being funded now. Mark Fields, Vice-Pres of the Americas, has said we have a competitive advantage over GM and Chrysler because the Government does not have a hand in business decisions at our company like at GM and Chysler.

$1B is a nice number... but you can't have 2 of the other domestic automakers with a clear labor $ advantage, on top of the advantage the imports have.

GM will come out with their numbers shortly. They sold more vehicles than Ford. Let's see what they look like.

The UAW chose to deal with Ford in March on concessions before the Gov laid down the law at GM and Chrysler. As such, Ford had already gained a better, competitive position before GM and Chrysler did. In the latest modifications to the Ford agreement, that was just overwhelmingly turned down by the UAW, there were NO monetary concessions. This would not have saved the company a dollar in labor costs if it had been approved. Let me correct that. Because of the consolidation of Skilled Trades into only "Electrical" and "Mechanical" classifications there would have been a few less workers at each plant. Basically, just more lay-offs, which are already ongoing.

We started repositioning Ford to be more competitive in 2005 when we reopened the contract to create "competitive operating agreements" at the local level at all Ford plants. The 2007 contract was defined by Ford as "transformational" because of the sweeping concessions and changes to work rules that were made. Since then that contract has been changed for more concessions twice. October's modification would have been the third time. The UAW has historically never opened a signed contract for renegotiation, but has at Ford 4 times now since 2005.

What I am saying is that the changes at GM and Chrysler are merely to "catch them up" to the changes that have occured at Ford starting 4 years ago. Right now Ford is more productive, with higher quality, and at a lower cost than GM and Chrysler, and are even with, or better, in competitiveness than the transplants, on an individual basis. The general public is not fully aware of all the changes that have occured at Ford, nor for how long.

Trust me - I wouldn't want to take any concessions either, but if a worker can't see the long term effect of a higher than industry labor rate Ford won't hold this winning position for long.

When the VEBA kicks in January 1, 2010 we will be right there with the "industry labor rate". Don't believe the press that wants you to hate the American companies.

Here are the highlights from Ford's report...

http://media.ford.com/article_displa...ticle_id=31244

Reported net income of $997 million, or 29 cents per share, an improvement of $1.2 billion from the third quarter of 2008. Pre-tax operating profit totaled $1.1 billion, an improvement of $3.9 billion from a year ago. It is Ford’s first pre-tax operating profit since the first quarter of 2008

Ford North America posted a pre-tax operating profit of $357 million, its first profitable quarter since the first quarter of 2005

Reduced Automotive structural costs by $1 billion, bringing the total reduction to $4.6 billion through the first nine months of 2009, and exceeding the full-year target of $4 billion

A strong product lineup drove market share gains in North America, South America and Europe as well as continued improvements in transaction prices and margins

Ended the quarter with $23.8 billion of Automotive gross cash, up $2.8 billion from the end of second quarter 2009++

Achieved positive Automotive operating-related cash flow of $1.3 billion for the third quarter, a $2.3 billion improvement over the second quarter

Ford Credit reported a pre-tax operating profit of $677 million, a $516 million improvement from a year ago

Ford now expects to be solidly profitable in 2011, excluding special items, with positive operating-related cash flow



Thanks for making your post. It gets out a lot of what a lot of people are thinking.

Steve

[Bossxr8]

Originally Posted by Scotty85

. Given the article I read a month ago about Ford Aus. being caught off guard by a sudden jump in the demand for Falcons, having a back order by about 8 months, I'd say the message is finally hitting home here too...

8 weeks, not months. Territory is getting pretty far behind too, enough to prompt some future OT to clear the backorders.

[FPV8U]

Things finally picking up, good on them for putting in the hard work and getting the job done.

[Sprint XR8]

Ford Sells $2.3 Billion of Convertible Notes to Reduce Debt

Nov. 4 (Bloomberg) -- Ford Motor Co., the only major U.S. automaker to avoid bankruptcy, sold $2.5 billion of convertible notes, 25 percent more than planned, in the largest offering of the debt this year.

Convertible bonds have returned 36.7 percent this year, rebounding from a 33 percent loss in 2008, the worst performance for the securities since at least 1988, according to Merrill Lynch & Co.’s All Convertibles index.

Ford is taking advantage of the improving market for convertibles to reduce debt, said Bill Feingold, co-founder of Hillside Advisors LLC, which advises clients on investing in the securities. The company will pay the same conversion premium on the notes as in its last offering of similar debt almost three years ago, according to data compiled by Bloomberg.

“If you can raise money now in almost identical terms to what you raised three years ago, you should probably be doing it,” Feingold, who is based in Valhalla, New York, said yesterday in a telephone interview. “They’re raising money when they can, not when they have to, and to me that’s a sign of a well-run company.”

Ford will pay a 4.25 percent coupon on the senior notes due in 2016, the Dearborn, Michigan-based automaker said in a statement posted on its Web site. The notes, which cannot be called for the first five years, may be converted to common stock or cash at maturity. The conversion premium is 25 percent higher than the closing price of Ford shares yesterday.

Bigger Greenshoe

The automaker initially planned to sell $2 billion of convertible notes. The total offering size may reach $2.875 billion if underwriters exercise a so-called over-allotment option, or greenshoe, according to the statement. Ford said the greenshoe was increased to $375 million from $300 million.

“This was a successful transaction and the results exceeded our expectations,” Lewis Booth, Ford’s executive vice president and chief financial officer, said in the statement.

In the December 2006 offering, Ford issued $4.5 billion of 4.25 percent bonds with a 25 percent conversion premium, Bloomberg data show. The notes, which mature in 2036 and can be called in 2016, rallied to 103.25 cents on the dollar as of yesterday from 26 cents on Jan. 2, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Positive Cash Flow

Ford, which lost $30 billion from 2006 through 2008, said Nov. 2 it had positive cash flow of $1.3 billion in the third quarter, its first positive cash-flow quarter since 2007. The third quarter’s $1.1 billion pre-tax profit was the first since the initial quarter of 2008, Ford said.

Ford shares fell 14 cents, or 1.85 percent, to $7.44 yesterday in New York Stock Exchange composite trading. They closed last year at $2.29.

The automaker will also offer as much as $1 billion in common shares through broker-dealers in December.

When a company raises equity through a convertible, “people tend to focus on the dilution it causes,” Feingold said. “This is going to give the company, however, much more time, if you want to bet on the upside, before they have to go back and figure out where some more money’s going to come from.”

Ford arranged $23.4 billion of debt in late 2006, including a five-year, $11.5 billion bank line, giving it more cash than rivals General Motors Co. or Chrysler Group LLC. To obtain the financing, Ford had to put up all major assets including its blue oval logo as collateral.

Credit Line

Ford said this week it’s raising as much as $3.3 billion, while paying down a portion of a $10.7 billion line of credit to strengthen its balance sheet. The company is seeking to repay 25 percent of the revolver and push out the maturity of the remaining $8 billion liability by two years to 2013.
http://www.bloomberg.com/apps/news?p...d=aLUHQDKe3vC0

[SSD-85]

Originally Posted by Bossxr8

8 weeks, not months. Territory is getting pretty far behind too, enough to prompt some future OT to clear the backorders.

Either way, still better than lot upon lot of unsold Fords like we have seen in the past.... :

[DJM83]

Originally Posted by xbgs351

Just 15 more year like this one to pay off last years debt.....

Forever the optimist arent you :togo:

[vztrt]

http://www.freep.com/article/2009110...-bright-future

Ford chief sees a bright future

BY BRENT SNAVELY

A much smaller Ford Motor Co. -- with 45% fewer workers and more than a dozen fewer factories than in 2005 -- is heading into the last stretch of 2009 with more money, optimism and fuel-efficient passenger cars than it has had for years.

"In 2011, we are pretty confident that, with our product line and our cost structure and a gradual recovery around the world, that we will be solidly profitable," Ford Motor Co. President and Chief Executive Officer Alan Mulally told the Free Press on Monday after Ford announced a net profit of nearly $1 billion for the July-September period.

Why not sooner? "We just need a little bit more time to see if the economic recovery takes place," Mulally said.
How did Ford do it?

• It cut incentives and convinced customers to buy higher-priced cars and trucks, resulting in a $1.9 billion net pricing increase.

• It gained 2.2 percentage points of market share in the crucial U.S. market, as well as in other key markets such as Europe, by promoting itself as America's independent and different automaker.

• It cut engineering, manufacturing, advertising and other costs by $1 billion.

For the first time since the first quarter of 2005, Ford's long-ailing North American division has reported a pretax operating profit.

A result of improved net pricing, lower material costs, cost reductions and improved market share, the division that comprises the United States, Canada and Mexico posted a pretax operating profit of $357 million in the third quarter. In all, Ford said its Ford, Lincoln and Mercury brands gained 2.1 percentage points of U.S. retail market share.

Most of Ford's other divisions also were profitable during the July-September period:


South America: Pretax profit of $247 million. That's a decline from a stronger profit of $480 million during the third quarter a year ago.


Europe: Pretax profit of $193 million. That's an improvement from a profit of $69 million during the same period a year ago.


Asia Pacific and Africa: Pretax profit of $27 million. That's an improvement from a profit of $4 million a year ago.

Volvo: Pretax operating loss of $135 million. It's an improvement from last year's pretax loss of $458 million.


Other Automotive: This unit consists primarily of interest and financing-related costs, reported a pretax loss of $243 million.


Financial Services: Pretax operating profit of $661 million, compared with a profit of $159 million a year ago.

Biggest challenges?

Ford owes more debt than its domestic competitors, has a labor agreement with the UAW that the Dearborn automaker says isn't competitive and remains at the mercy of a global economy.
Ford looks to pay off some debts early

Hours after surprising Wall Street with a profit of nearly $1 billion for the third quarter, Ford Motor Co. announced plans late Monday to refinance a portion of its debt and pay it off in 2013 rather than in 2011 -- a move that will give the automaker some breathing room in repaying its loans.

"The early response from our lenders to this approach has been very positive, with some of our major banks already agreeing to extend about $6 billion," Lewis Booth, Ford's chief financial officer and executive vice president, said in a Monday afternoon e-mail to employees that capped a day full of good news for Ford.

After Ford released its third-quarter financial results, the automaker's stock increased 58 cents, or 8.3%, to close at $7.58 per share, and two credit-rating agencies boosted Ford's credit rating or outlook.

"The evidence we see indicates that Ford is on track in its plans to reestablish a sustainable and competitive business model," Bruce Clark, a senior vice president at Moody's Investors Service, said in a report Monday.
Ford still cautious

When the year began, analysts thought Ford would struggle to survive the year without asking for emergency federal loans, like General Motors and Chrysler Group LLC did.

Now, some anticipate that Ford will turn an annual profit earlier than the company's projections.

Ford President and Chief Executive Officer Alan Mulally forecasted Monday that Ford would be "solidly profitable" by 2011, but J.P. Morgan automotive analyst Himanshu Patel said that might happen sooner.

"Ford ... did not pull forward this forecast to 2010, somewhat surprising given the profitable quarter," Patel said in a research note Monday.

Mulally said Ford is being conservative and isn't certain about how the economic recovery in the United States and the rest of the world will shape up or how quickly.

"We have record-high unemployment, we have consumer confidence bouncing around" in the Unites States, Mulally said.
Losses tied to gains

Despite Mulally's cautionary tone, Ford reported a third-quarter profit for every one of its divisions, except for Volvo, and took in more cash than it spent for the first time since mid-2007. It also delivered a profit in its long-troubled North American division for the first time since the first quarter of 2005.

Ford's gains are the result of a lot of painful actions in recent years. It has closed more than 18 plants since 2003 and slashed 45% of its workforce in its long-ailing North American division since 2005.

Ford also negotiated cost-cutting contracts with the UAW four times in the last five years. On Sunday, the Canadian Auto Workers ratified another cost-saving deal.

In all, Ford said it has reduced automotive structural costs by $4.6 billion during the first nine months of the year.

"We expect structural cost to be relatively stable now that we have largely completed significant restructuring actions within our manufacturing facilities and personnel reduction actions," Booth said.

Ford also has seen a strong customer response to its new cars and trucks, such as the Ford F-150 pickup and Ford Fusion midsized car.

Although Ford's global revenue declined $800 million, to $30.9 billion in the third quarter, the automaker has been gaining market share in the United States and other critical markets.

Ford acknowledged that the government cash-for-clunkers program boosted its sales in the United States and Europe, but Mulally said Ford would have earned a profit even without those programs.

"We have been increasing our share in this down market every month for the last 10 months," Mulally said in an interview with CNBC. "So we are on a pretty steady trajectory of growth now."

Options help boost pricing

Another key reason for Ford's improved financial performance was a $1.9-billion improvement in net pricing around the world, compared with the same period last year. Most of that, $1.4 billion, was achieved in North America.

Ford said its net pricing improved because it has been able to cut discounts on vehicles and convince customers to buy more options and accessories in the United States and Europe. That includes options such as Ford's in-vehicle wireless communications and entertainment technology, Sync.

"We have a complete family" of cars and trucks, Mulally said. "We don't have to discount vehicles because we are making them in the amount the people really do want."

Profit and labor

Ford workers said they knew the automaker was on the way to financial health, which is part of the reason they rejected the latest proposal to modify their labor contract.

The deal was defeated by more than 70% of the 41,000 members who voted.

"We know they are making a profit," said Palemon Posey, 46, of Detroit, who voted against the proposed UAW contract.

Mulally said Ford would continue to work with the UAW to find other ways to reduce costs.

"The UAW," he said, "has clearly indicted that they do not expect Ford to be disadvantaged."

[Ohio XB]

From the above article....

... has a labor agreement with the UAW that the Dearborn automaker says isn't competitive...

Just to show you how Ford would like to have it both ways, here is an article from March of this year, right after the UAW approved the latest round of concessions...


http://www.egmcartech.com/2009/03/30...-the-downturn/

As Rick Wagoner is being ousted as CEO of General Motors by Obama and as Chrysler faces a “Fiat or bust” policy, Ford CEO Alan Mulally is hanging out in his 12th floor corner office at Ford’s Dearborn headquarters with a big grin on his face.

Mulally says that Ford is now competitive. ”Ford has won all of the concessions it needs from labor and investors to weather the industry’s crisis — even if car and truck sales continue to decline,” Mulally told Detroit News. “The downturn is a temporary thing. We just have to make it through it.”


In December 2008, Ford joined General Motors and Chrysler in Washington to ask for a $9 billion credit line if auto sales continue to hit rock bottom by May or June. However, Ford has since cut its labor costs, bondholders have offered to swap debt for equity in the company and extreme cost-cutting measures have been put into action.

Mulally says that Ford has taken all the necessary step to respond to the global economic downturn even if March sales aren’t looking so good.

- By: Kap Shah

Source: Detroit News

Now, in yesterday's article, they want to say the agreement is not competitive, even after winning "...all the concession it needs...," which Alan Mulally stated himself.

These are the kinds of things in the press that workers have to struggle with. I will have this latest quote, that Ford has an umcompetitive agreement to work under, thrown at me by a number of people. How soon Ford has forgot, even while it makes money in this economy.

I don't "want more" right now, I just don't want to have less. We already agreed to everything it takes.



Steve

[Trek]

And just yesterday, in the finance section of the newspaper (Geelong Advertiser) there was a massive article, with a POSITIVE title about the exact same news. Can only hope it was the same in others around the country.

Can't ask for me, can ya?

[janddbone]

The financial reports are fairly clear...

Cash is at about $20 billion
Debt is at about $27 billlion
Total debt to be payed in the next year - less than $2 billion...

[mik]

27 billion is still a lot of moola to pay back.

[phillyc]

Originally Posted by mik

27 billion is still a lot of moola to pay back.

Yes it is. But at the rate of $1B a qtr, it isn't.

I'd like to be paying off my mortgage at an eqivalent rate and be free in 6yrs 9mths!

As interest costs come down with reduced principle, the payoff and profits get bigger and faster still.

This does all hang on the economy remaining at least as good as it is, and hopefully improving!