Ford reaps profits from cost cutting

BY THE ASSOCIATED PRESS Comments 0
Published: November 3, 2009

DEARBORN, Mich. — One of the troubled Detroit Three automakers, Ford, is making money again and looking for better times in no more than two years.

In this photo made with a fisheye lens last week the Mustang logo is shown on the back of a car on a Ford dealership in Wexford, Pa. AP Photo

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Emerging from a three-year makeover with popular cars and trucks, Ford said Monday it earned nearly $1 billion in the third quarter and will be solidly profitable by 2011, a more optimistic forecast than earlier.

While heavy debt and lean times for American car shoppers threaten the comeback, the report puts Ford in a far better position than competitors General Motors or Chrysler, which are still finding their bearings after emerging from bankruptcy.

Ford’s cars are winning popular and critical acclaim, like the Fusion midsize sedan and more gas-efficient Focus compact.

And years of painful cost-cutting, which have halved its work force, have looked prophetic since the recession struck, hurting demand.

Even in North America, the company’s biggest market, Ford turned a profit after losing money there for four years.

GM and Chrysler, meanwhile, are still trying to cut jobs and win back customers, many of whom are steering toward their healthier rival.

Three years ago, Ford was considered in the worst shape of the Detroit Three after posting what was at the time the worst annual loss in its history.

The big quarterly profit is the fruit of changes Ford has been making for several years.

When the economy faltered last year and took auto sales down with it, Ford had the cash to weather the storm.

But Ford faces an uncertain future.

Mulally wouldn’t forecast a profit for 2010 because the company is concerned about low consumer confidence paired with high unemployment, which could hold down demand.