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Ford Posts $1B Q3 Profit

Surprise swing to black driven by cost cuts, Cash for Clunkers

By the Associated Press

Posted Nov 2, 2009 6:41 AM CST

(AP) – Ford earned $1 billion in the third quarter, fueled by US market share gains, cost cuts, and the government's Cash for Clunkers rebates. The automaker, reporting net income of $997 million, or 29 cents per share. says it now expects to be "solidly profitable" in 2011. The company lost more than $14.6 billion in 2008 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's North American car and truck division—its key business—posted a pretax profit of $357 million, its first quarter in the black since early 2005. Ford cited higher pricing, lower material costs, and increased market share for the improvement. 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 GM and Chrysler.

In an Oct. 26, 2009 file photo The US flag and those of other countries fly outside Ford headquarters in Dearborn, Mich.
In an Oct. 26, 2009 file photo The US flag and those of other countries fly outside Ford headquarters in Dearborn, Mich.   (Carlos Osorio)
In this photo made with a fisheye lens on Oct. 29, 2009, one of the performance Mustangs is displayed on a raiser in the lot of a Ford dealership in Wexford, Pa.
In this photo made with a fisheye lens on Oct. 29, 2009, one of the performance Mustangs is displayed on a raiser in the lot of a Ford dealership in Wexford, Pa.   (Keith Srakocic)
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COMMENTS
Showing 3 of 16 comments
davjc09
Nov 2, 2009 10:00 AM CST
I'm not feeling sorry for Ford. More on the lines of happy they managed to survive despite the precipitous fall of the US auto industry. They didn't beg the government for a bailout. They made profits despite a drop in revenue. However, they aren't out of the woods yet. (Much like the recession is technically over, but we're not exactly booming either). It's nothing to get overly excited about yet. As far as the unions go, they will get more once Ford obtains substained growth, like a full year's net profit for instance.
Doctor-Zaius
Nov 2, 2009 8:34 AM CST
And of course they would all show it willingly? Please.
Doctor-Zaius
Nov 2, 2009 8:33 AM CST
Ford, GM and Chrysler all had loads of debt. Ford renegotiated it's debt prior to the credit crunch. It wasn't a stroke of genius, it was just time to do it. GM and Chrysler got caught with debts coming due with no way to refinance them. Ford's current good fortune has very little to do with the management of Ford and everything to do with dumb luck.

Copyright 2012 Newser, LLC. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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