Tuesday, April 27, 2010
$2.1 Billion Profit for Ford in Quarter
This article states how the Ford Motor company had its best quarterly performance in six years (2.1 billion dollars). Ford has managed to increase sales of new products drastically and at the same time closing plants and getting rid of a lot workers. The last time Ford earned profits near $2 billion were in 2004. Based on the profits in the first quarter, Ford expects to have "solid profits and cash flow." the profit was equal to 50 cents a share compared to a loss of 60 cents a year ago.
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4 comments:
I think it is important to consider how much of the change in profit can be attributed to the problems with Toyota, as the article mentions. Also, this article seems to coincide with many other articles referring to increases in consumption in the month of March. It will be interesting to see if these increases are a sign of an overall recovery or is it just a fluke?
I think that the problems Toyota has faced with recalls should be a lesson to the U.S. companies that they have to do it right the first time if they want to accomplish specific business strategies such as six sigma, etc.
The article says that the reason why Ford is the only Detroit-based automaker not to file bankruptcy is due to its investment actions before the recession, and even those actions still put the automaker in jeopardy. Although Ford is in an upswing right now, it is still $34.3 billion in debt - more than its cash value. Continuing its upswing in order to pay off Ford's enormous debt will definitely be a top priority in the next quarters.
Ford's profits are certainly overshadowed by their enormous debt and especially coupled with Toyota's problems suggests that Ford has been granted a great opportunity to decrease their debt. Their enormous debt certainly shows how far behind they used to be against the competition however with Toyota's historical success in producing cars, it's interesting to see how much longer Ford will be able to milk their sucess.
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