Ford Posts 3Q09 Profit
Ford Motor Companies, the only major American automobile company to adequately prepare for a future where fewer cars are manufactured, and the only one not to receive signficant government handouts in the past year, posted a proft last quarter.
Ford Motor Co (NYSE:F – News) posted a quarterly profit on Monday, defying Wall Street forecasts for a loss as it cut costs and gained market share, leading it to raise its 2011 outlook to “solidly profitable” from break-even.
Ford’s shares surged over 9 percent as the surprising profit and increased outlook overshadowed an expected announcement later Monday that the United Auto Workers union has rejected a tentative cost-cutting deal with the automaker.
The results provided more evidence that Ford has distanced itself from U.S. rivals General Motors Co (GM.UL) and Chrysler, which have struggled to complete restructurings after emerging from government-funded bankruptcies earlier in 2009.
Ford seized North American market share from GM and Chrysler when they halted most production to prepare and execute their bankruptcy cases.
No doubt some of this profit was fueled by the time-shifted purchases produced by Cash For Clunkers. Nevertheless, I am happy to see this, as I was worried that government financial backing of GM and Chrysler might end up with the Feds giving them an advantage over Ford. I’m pleased to see that that hasn’t happened. (Frankly, government interference in the operations of GM and Chrysler to date has been surprisingly restrained, all things considered.)
Frankly, of the Big 3 automakers, Ford is the only company that I considered buying a car from in the past decade. They make good cars and they’re much better managed than the other two. I’m curious to see if they can sustain a profit into the first half of 2010, though.
I only encounter American cars when renting. Every time I do I’m reminded why I send my car dollars to Germany and Japan. But I’ve rented Mustangs a couple of times and liked them enough to consider buying one. (You know, if I can convince my wife that I need a convertible.) And the mid-sized Ford SUV isn’t bad, either. Not as good as my RAV, but not awful.
This is good news for me, as I invested quite a bit of capital in Ford when their stock price was below $1.60 a share. I wish I had bought it when it as at a dollar. I was a little concerned about government giving GM and Chrysler an advantage and concidered selling and just taking the profit to invest elsewhere but this news means Ford stock will continue to appreciate.
Ford confronted some of the problems that GM has never been able to bring itself to face some time ago. However, believe me, Alex, when I tell you that Ford has issues of its own.
Ford’s position is something on the order of the world’s tallest midget. A distinction of sorts but hardly a marvel.
I have loved each of the Fords that I have owned and anticipate at least giving Ford my first and last look for purchases in the future based on my previous experiences.
…like anyone really cares, of course.
Dave, in what respect is Ford Motor Company a midget? Dispite what you think are problems, they seem to be producing a product that sells. Where their products compete in racing they win. Robert Hight will probably win the Fuel Funny Car title in NHRA with a Ford engine. Ford just produced an engine for NASCAR and they win in world rally racing. They have held on to Mazda while off loading Volvo, Jaguar, Astin Martin, and Rover. Ford has only ever had to dump one brand (Edsel) unlike GM with Saturn, Oldsmoble and Pontiac. Bet you drive a Chevy.
No, as a matter of fact we have a Ford and a Toyota.
In terms of running an efficient, effective company. I talk to Ford people nearly every day and have done over a period of 25 years. The level of bureaucracy and penny ante garbage that goes on is mind-boggling. That they’re better than GM is damning with faint praise.
So how long before someone suggests that Ford needs to “share” its “excess” profits with GM and Chryslter “for the good of the industry”?