Ford's $1 billion profit signals turnaround Options

[robertlane]

Ford's $1 billion profit signals turnaround
Surprising performance shows Mulally's plan is working

In Ford Motor Co.'s surprisingly strong third-quarter numbers, namely a $1 billion profit, there are all sorts of people who could claim vindication.

It starts at the top.

The simple fact is that Ford wouldn't be poised for a break-out -- and the Ford family probably wouldn't still control the company founded 106 years ago -- had Executive Chairman Bill Ford Jr. and the board of directors failed to recruit CEO Alan Mulally three years ago. He's driving an elegantly simple turnaround plan that is delivering profits in each of the automaker's operating regions despite a deep global auto recession.

That is vindication.

Yes, Mulally and his core team (almost all of them Ford lifers) can claim signs of a legitimate turnaround, including the first operating profit in North America since 2005. Yes, Ford's United Auto Workers members can trumpet the black numbers at the Blue Oval as proof of their wisdom in torpedoing another set of concessions.

But it's the guy whose name is on the building and the outside directors who pushed him to woo an outsider to Dearborn from Boeing Co. that set in motion an industrial transformation now furnishing more compelling evidence in answer to a simple question: Can Ford compete?

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[V8 Ford]

Didn't Ford also post a Q3 profit last year before losses in Q4 due to R&D resulted in a net loss on the fiscal year? This is still a big jump over the quarterly profit from last year in worse market conditions, so well done Ford.

[RichardJensen]

Mulally took a 30% pay cut?

We all must've missed that one.

[Marginal Economi...]

Mulally took a 30% pay cut?

We all must've missed that one.

Mulally's pay cut

[theoldwizard]

Least anyone forget

Salaried employees also lost 401(k) matching (that is a 6% pay cut), bonuses and merit increases for this year and next, and saw their health care cost sharing creep up into the 30-plus percent range.

Also remember, salaried COLA ended long ago !

As for profit, well another 25 billion or so and they will be out of the hole !

This post has been edited by theoldwizard: Nov 3 2009, 05:04 AM

[428mach1]

I don't think its time to celebrate yet and back slapping-- Ford is not out of the woods yet -- The loss in market share is a direct loss of sight in the eighty's - Ford looked like a force , but the quality push soon ended and the lemons soon appeared again-- give it a few years and lets see if we can win back the customers that left because of the poor product selection and quality. Ford needs to take a lesson from the Japanese -- and be respectfully quite and do their business

[RichardJensen]

Ford market share in the late 90s was roughly the same as it was in the 60s: