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Bailout-less Ford turns a profit

This should speak volumes:

The Ford Motor Company reported net income of $2.7 billion in 2009, its first full-year profit since 2005. The automaker lost $14.7 billion in 2008. Executives said they now expect the company to remain profitable -- at least on a pre-tax basis -- in 2010 and 2011.

Although Ford's revenues were down for the year, to $118.3 billion from $138.1 billion, it nearly doubled its cash reserves to $25.5 billion at year-end, reflecting the company's success at controlling costs and improving margins. However, Ford's debt remains a hefty $34.3 billion.

Business has been on the upswing around the globe. Ford was profitable in every region, including North America, and worldwide revenues in the fourth quarter rose to $35.4 billion, from $29.0 billion a year earlier.

...

Inside Line says: Ford's turnaround is even more remarkable considering that it didn't file bankruptcy, as did its crosstown rivals, nor did it require a massive taxpayer-funded bailout.

The question here is obvious... what can those car companies who needed bailouts from we taxpayers learn from Ford?

MarketWatch gives us clues:

Kip Penniman, fixed-income analyst for KDP Advisor, said the report was better than he had expected -- particularly with regard to Ford's operating cash flow.

"We continue to be impressed with CEO Mulally's aggressive efforts to restructure Ford, reduce costs, and drive product improvements," he said. "We believe the investment community will turn its attention to Ford's efforts to right-size its balance sheet.

Interesting...  no mention of government handouts.

Crossposted(*).


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Comments (19)

"We continue to be impresse... (Below threshold)
DaveD:

"We continue to be impressed with CEO Mulally's aggressive efforts to restructure Ford, reduce costs, and drive product improvements,....."

Hmmmmmmmmmmmmmmm. Is it being suggested that quality of leadership, particularly in tough times, makes the difference between success and failure???

Obviously government inspec... (Below threshold)
GarandFan:

Obviously government inspectors are going to have to pour over Ford's books. They're making Obamamotors look bad. Can't have that. People might get the impression that Obama doesn't know what he's doing. What could go wrong with appointing government overseers who've never worked a day in the auto industry? They might not be qualified, but then, neither was Barry. And just look at the dynamite job he's doing!

We continue to be impres... (Below threshold)

We continue to be impressed with CEO Mulally's aggressive efforts to restructure Ford, reduce costs, and drive product improvements

Unlike their competitor's problem...

We continue to be burdened with UAW's aggressive efforts to take over GM, increase costs, and drive retirement plan improvements.

It does speak volumes, yes,... (Below threshold)
Tsar Nicholas II:

It does speak volumes, yes, but unfortunately the zombies on the left side of the political spectrum are deaf, dumb and blind.

Since both GM and Ford are ... (Below threshold)
Steve Green:

Since both GM and Ford are equally heavily unionized and Ford can turn a profit this blows huge holes in the argument often mounted by the right that the unions killed GM.

GM management killed GM.

Those same corporate Managers and Directors who by and large vote Republican.

Oops, inconvenient truth alarms are sounding at Wizbang Central....

Imagine if the other automa... (Below threshold)

Imagine if the other automakers ignored the bailout and actually hustled to perfect their craft?

Ford had better watch out. ... (Below threshold)
Stan25:

Ford had better watch out. The Obamaites will bee gunning for them next. Can't have a major corporation showing a profit. That is not kosher according to the Commies that populate the White House now days. Before you know it, O will sic the UAW on them and call for a strike. Ford might even get a special tax levied against them, and God help them if they pay out a sizable bonus to any executive or board member.

Our buddy Steve writes:<br ... (Below threshold)
DaveD:

Our buddy Steve writes:
"Since both GM and Ford are equally heavily unionized and Ford can turn a profit this blows huge holes in the argument often mounted by the right that the unions killed GM."

Steve, you can always be counted on to put snarkiness ahead of facts.

Please read this item. It is short so it will only take you about 30 minutes:

http://blog.ockhamresearch.com/index.php/2009/03/ford-and-unions-working-together/

The UAW workers made concessions with Ford Motor management to stay competitive. Now whether the UAW leadership told Ford workers to go ahead and they decided no way with GM and Chrysler I don't know. But this information does indeed suggest that the unions did have a hand in the demise of the auto industry and Ford dodged the Obama bullet because its UAW labor force was willing to compromise.

DavidD, quit confusing Stev... (Below threshold)
GarandFan:

DavidD, quit confusing Stevie with facts. He'll have to go back over to DK and whine that he got shot down again. And couldn't they come up with better arguments that support their wonderful, all knowing, all seeing Obamassiah.

Since both GM and ... (Below threshold)
Since both GM and Ford are equally heavily unionized and Ford can turn a profit this blows huge holes in the argument often mounted by the right that the unions killed GM.

GM management killed GM.

Those same corporate Managers and Directors who by and large vote Republican.

Oops, inconvenient truth alarms are sounding at Wizbang Central....

Steve, I worked at GM for 2.5 years. You are correct to a point. Unions did not kill GM on their own. GM's management and corporate culture is the absolute worst I've seen in any company in any industry in some 20 years of work, most of it consulting. But, and it's a big but, the unions deserve a good share of the blame as well, for driving up costs, driving down quality and generally "working" in ways that would get them fired anywhere else.

But I had to laugh at the idea of GM managers and directors voting Republican. You have clearly never been to Michigan, and clearly never talked to GM's officers. There might be a few Republicans among them; I think I might have met one. Most of them are very, very, very liberal, actually. Probably not unsurprising, considering how bureaucratic GM is.

DaveD wrote:<blockquo... (Below threshold)
iwogisdead:

DaveD wrote:

The UAW workers made concessions with Ford Motor management to stay competitive.

Exactly, DaveD, good post.

Here's some more:

http://usnews.rankingsandreviews.com/cars-trucks/daily-news/090310-Ford-Union-Reach-Deal/

Some highlights:

"Ford has reached a deal with the United Auto Workers union that will see wages frozen, year-end bonuses eliminated, and changes to retiree benefits both sides hope will help Ford survive. The pact may be just the first time the union agrees to concessions to help an automaker out of the crisis rocking the auto industry . ."

Steve Green (He Who Refuses to Respond to Posts He Doesn't Like) posts drivel which has nothing to do with the real world. The Union backed off to help Ford, and, guess what (!), Ford made a profit.

Steve Green is a dumbass. Not even the Ford profits can change that fact. Steve Green should go away.

Jeff, you beat me to it. W... (Below threshold)
epador:

Jeff, you beat me to it. While I never worked at GM, I lived in MI for 15+ years, had neighbors and patients in GM management, and really had to laugh at SG's representation of them as Republican. Not even as Republican as Olympia Snowe and Arlan Specter, I'd say.

The UAW had to face reality... (Below threshold)
GarandFan:

The UAW had to face reality at Ford. Ford wasn't on the government dole. So they made concessions or Ford went under and the workers joined "Funemployment". Given the economy it wasn't like those workers were going to waltz right over to the competition and get a job. GM and Chrysler are on the dole. The UAW figures it can shakedown the US taxpayer at will as long as Barry's running the show. That will change when GM and Chrysler come hat in hand back to Congress for MORE MONEY.

"Steve Green should go away... (Below threshold)

"Steve Green should go away."

wizbang should look into the Tocqueville Project. http://tocque.com/help.html

" The Tocque helps make your blog reading more productive and enjoyable. It even allows you to interact more easily with other commenters. You can do the following:"

* Save comments you want to revisit easily later in the My Clips Tab
* See the most popular comments in the Top Tab
* Keep track of comments you post in the My Posts Tab
* Hide individual comments, as well as all the comments of people whose posts you can't stand, both listed in the Trolls Tab
* Watch what other users have clipped and posted in tabs you create.
* Exchange messages with other tocquers, listed in the Messages Tab
* Easily post a reply to a specific comment.

Note that the troll is not banned from the site, just from the view of those who judge the trolls comments to be a waste of time. Commenters may at any time reactivate the comments of someone previously hidden. And any visitor who hasn't activated a 'ban' on the trolls comments will see the trolls comments.

Belmont Club blog recently started providing the Tocque function.

"The question here is obvio... (Below threshold)
jpm100:

"The question here is obvious... what can those car companies who needed bailouts from we taxpayers learn from Ford?"

Its better to almost lose your company when the rest of the economy is still good.

Ford almost took a dump in 2006. They were able to leverage some of the same reckless credit that eventually did in the credit market by 2008. So they had cash on hand to handle the losses induced buy a car market that shrunk almost 50%

If GM had the some problems they had in 2008 back in 2006, they could have easily done the same thing.

Other than lucky timing, there's one other difference. Ford was going down in a good economy. GM had to see vehicle sales slashed in half to get in trouble.

"GM had to see vehicle sale... (Below threshold)
GarandFan:

"GM had to see vehicle sales slashed in half to get in trouble."

GM also took a bath via GMAC - and their home mortgage division. Which, BTW, just got another infusion of taxpayer dollars.

"GM also took a bath via GM... (Below threshold)
jpm100:

"GM also took a bath via GMAC - and their home mortgage division. Which, BTW, just got another infusion of taxpayer dollars"

GMAC hasn't been GM's for a few years. It was owned by Cerberus who owned Chrysler. And Cerberus took GMAC in that direction. In fact that's part of what hosed GM so quickly that GMAC cut off credit because of their financial troubles.

Divesting itself from controlling interest in GMAC was part of the wonderful wallstreet popular wisdom.

Ford retained control over its financial arm and got TALF assistance to keep that flowing (although they didn't get a bailout). And that $11 billion low interest long term DoE loan will help stave off those $20+ billion high interest short term private loans which start coming due soon (although they didn't get a bailout).

"Bailout-less Ford turns a ... (Below threshold)
914:

"Bailout-less Ford turns a profit"

They must have sent Siezer their protection money early and often!!

What is Ronald Reagan the n... (Below threshold)
914:

What is Ronald Reagan the new CEO?




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