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Ford's $1 billion profit signals turnaround


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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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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 !

Edited by theoldwizard
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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

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  • 2 months later...

toyotafordummies.jpg

 

 

Yeah, my (managerial) accounting professor today spent a good 10 minutes talking about Toyota and how it issued the huge recall and wasn't selling 8 vehicles. He also asked the class of about 100 how many thought Toyota would recover from it/handle it well - maybe 10 people raised their hands. Keep in mind this is a college campus where most of them probably drive Toyotas....

Edited by rmc523
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Yeah, my (managerial) accounting professor today spent a good 10 minutes talking about Toyota and how it issued the huge recall and wasn't selling 8 vehicles. He also asked the class of about 100 how many thought Toyota would recover from it/handle it well - maybe 10 people raised their hands. Keep in mind this is a college campus where most of them probably drive Toyotas....

 

From my experience, if you asked a class of 100 if the sky is blue, about 10 would raise their hands.

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now if only greedy uaw workers don,t spoil the whole thing. only a matter of time matter of time...

 

 

3 rounds of concessions for blue and the white collar are getting their bonuses and perks back, and you have the nerve to call us greedy?

 

You do realise that labor when assembling the vehicle only accounts for 6 to 7% of the vehicle cost, right? That includes pay, benefits, health care. Ford is turning around with the help of the UAW.

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Can someone please explain why Ford is down so much on a 100 plus Dow up day? Could there be rumblings of another dilutive share offering?

 

 

Just a thought.....

 

I would surmise that the analyst community was less than enamored (read: embarrassed) by the variance in actual performance vs. industry consensus estimates – witness the lack of congratulations by these same folks in the Q&A session of the conference call. The vast deviation from the consensus estimates may suggest a limited understanding of the business to their respective clientele (and brokerages that employ them). So, after an internal brow beating, they sell the stock and re-enter at a lower cost base. In the short term, there is equilibrium among the parties.

 

After the dust settles, the smarter ones will actually sit down and try to understand the dynamics of the business a bit better, update the antiquated models and key variables. hint: study cost structure, concept of how to achieve net favorable pricing and the coming attraction of: global leverage.

 

And while I may have personally enjoyed listening to the analyst community grasping for basic understanding, long term investors in the Company may be better served if the F Management Team provided guidance that would permit travel closer to this solar system. We all win that way.

 

Go Ford!

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We need to keep our aim on what Ford actually achieves not what analysts think they should. It's not hard to amaze these people, they have not kept track of Ford's restructuring and progress.

 

Also, if Ford does well, then Ford's blue and white collar workers deserve a cut too. With all the savage cuts the UAW took to work with Ford and save jobs, I can't believe people still here think the union is some adversarial force of evil holding back Ford - It just stupid talk.

Edited by jpd80
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We need to keep our aim on what Ford actually achieves not what analysts think they should. It's not hard to amaze these people, they have not kept track of Ford's restructuring and progress.

 

Also, if Ford does well, then Ford's blue and white collar workers deserve a cut too. With all the savage cuts the UAW took to work with Ford and save jobs, I can't believe people still here think the union is some adversarial force of evil holding back Ford - It just stupid talk.

 

 

You're kidding right?

 

The day after ford can hire it's blue collar workforce for what it takes to fill the jobs is the day the blue collar work force should get any cut of the profits.

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You're kidding right?

 

The day after ford can hire it's blue collar workforce for what it takes to fill the jobs is the day the blue collar work force should get any cut of the profits.

You need to keep up.

There's already a $450 profit share check on its way to Ford employees.

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Not having Jaguar/Land Rover on your books helps a lot.

 

TATA paid $2.3 billions to Ford for the junk.

 

TATA have had to invest over $1 billion of their own money in J/LR in R&D, J/LR still have over $1.9 billion of debt they owe.

 

Big Al done well getting rid of them, gotta say l never knew he a took 30% pay cut and relinquished all bonus payments for 2009 and 2010.

 

"They broke the mould" when they made Big Al, he is very special and that there is not another CEO out there like him. But he would be first to admit he could not have done it without the backing and support of everybody working together at Ford for the good of Ford when a lot of tough decisions had to be made.

 

Could kick myself for not buying Ford sharesbanghead.gif

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