Ford announces Q3 profit

It's been one of the great unknowns of the Global Financial Crisis. With new life breathed into GM and Chrysler by the US government, has the other leg of the 'Big Three' been left a gasp?

Ever since GM and Chrysler secured financial support following their respective Chapter 11 bankruptcy proceedings, rumours have circulated that Ford would be left short of the cash necessary to develop competitive new product.

GM and Chrysler's debts cleared left the way for those two corporations (and with further assistance from Fiat in the case of the 'Pentastar' brand) to devise leading edge designs, while Ford battled on into the short-term future, developing new models on shoestring budgets.

The announcement yesterday that Ford's North American base has turned a profit for the third quarter of this year is good news for the iconic brand. According to the company's press release, the net income of US $997 million represented a US $1.2 billion improvement over the same period last year (third quarter of 2008). The previous occasion Ford posted a profit was the first quarter of 2008 -- 18 months ago.

While the path ahead remains rocky, Ford expects to be "solidly profitable" in 2011. Highlights for the quarter included Fiesta (pictured) taking second spot for sales in Europe and record growth for the brand in China.

"Our third quarter results clearly show that Ford is making tremendous progress despite the prolonged slump in the global economy," Ford President and CEO Alan Mulally was quoted as saying in the press release. 

"Our solid product lineup is leading the way in all markets. While we still face a challenging road ahead, our One Ford transformation plan is working and our underlying business continues to grow stronger."

During the recent introduction of the Fiesta ECOnetic to the Australian media, the Carsales Network had asked Ford's local President, Marin Burela, for his views on the rumours that Ford would suffer without a 'level playing field' for vehicle development.

"We're ahead of plan, globally, in terms of where we wanted to be," he said by way of summarising Ford's financial position.

"We actually take enormous pride in the fact that we did not ask for any form of government... bailout money.

"It's interesting, because one of the other things that has really differentiated us from GM, Chrysler and the rest of the competitive group is that in itself. People have really warmed to that. Our market share has grown in the US and things have been really working well for us.

"Clearly, we continue to have a very close watch on what's happening... even our competitors, when it comes to how they're responding and behaving in the marketplace; is there an advantage there... because of the fact that they restructured through the support of government funding, taxpayers' money?

"There's been clear evidence -- factual evidence -- that yes, we do have borrowings that are out there, but we're also managing those.

"Our product cycles are really starting to now come to a fore, all the products are starting to come out -- and as soon as you start getting them out, you start generating returns on then very, very quickly.

"We have continued to restructure our business globally, in terms of plant restructuring throughout different parts of the world to ensure that we're suitably sized for the volume that is required.

"As the economy starts to turn globally, I think we are well placed to take that to our advantage."

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