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Ford returns to profit
02 November 2009
Ford has announced it has returned to profit, after successful cost cutting measures, increased market share and the US ‘Cash for Clunkers’ scheme.
The firm posted a $1billion (£612million) profit in the third quarter of 2009 and it said it would be “solidly profitable” by 2011.
Ford was the only one of the Detroit Three not to enter Chapter 11 bankruptcy protection earlier this year. Its North American arm was profitable for the first time since the first quarter of 2005, which was the main reason behind Ford’s overall return to profit.
Lewis Booth, Ford’s chief financial officer, told the Financial Times: “The biggest improvements that we made were made at the beginning of the year. We’re still saying we’ll be solidly profitable in 2011 with positive cash flow.”
Ford’s cost cutting hopes could be hit, however, by unions voting against planned reforms. Ford has proposed to ban strikes until 2015, combine job classifications and freeze the pay of new workers.
GM and Chrysler have agreed similar deals with their workforces and Ford argue that it needs a similar deal to prevent it being left behind its competitors with higher costs.
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