Ford back in the black

Ford's financial situation has improved considerably since the US auto market collapsed in the latter stages of 2008. Thanks in large part to a significant increase in US market share, the Blue Oval has recorded impressive gains.

Financial market analysts were expecting a first quarter profit of around US$1 billion, but FoMoCo has just reported a US$2.08 billion profit, on the back of a massive 2.7 per cent gain in US market share -- it's largest quarterly gain since 1977.

After recording considerable losses this time last year, Ford CEO Alan Mulally had this to say about the financial turnaround: "The Ford team around the world achieved another very solid quarter, and we are delivering profitable growth. Our plan is working, and the basic engine that drives our business results -- products, market share, revenue and cost structure - is performing stronger each quarter, even as the economy and vehicle demand remain relatively soft."

Interestingly, Ford of Europe's profit made up only a small part of the gains -- just US$107 million -- despite being Europe's number one brand with a 9.4 per cent share of the market.

Lewis Booth, Ford's CFO, had this to say: "We are seeing the benefits of our One Ford plan around the world. All of our business operations -- North America, South America, Europe, Asia Pacific Africa and Ford Credit -- were not only profitable, but also showed substantially improved results over a year ago."

Online publication Edmunds.com has posited Ford moving into the number-two position for sales. Ford's brand image has been bolstered by its self-reliance, unlike GM and Chrysler, both of which have drawn upon government funding to overcome bankruptcy. It has been Ford's ability to avoid Chapter 11 proceedings that has helped its sales performance in North America. The Blue Oval brand is expected to leap-frog Toyota into second place. The Japanese company, with an American manufacturing presence, has seen its number one ranking slide in the aftermath of sensational accounts from Toyota owners concerning alleged unintended acceleration scares. These reports have forced Toyota to recall millions of vehicles throughout North America and the rest of the world (although not in Australia). Between the financial weakness of GM and Chrysler, and the suddenly damaged reputation for engineering and build quality of Toyota, Ford is in the box seat to pick up substantial market share and revise its financial forecast upwards.

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