The latest and strongest sign of the automaker's comeback comes as it pays down debt and adds to U.S. market share
It's now fair to declare Ford Motor (F) an unqualified turnaround story.
The company reported a $997 million third-quarter profit on Nov. 2, adding profits to gains in market share and improvements in quality since CEO Alan Mulally took over in September 2006. The nearly $1 billion profit is a $1.2 billion turnaround from the third quarter of last year. The company also generated $1 billion in cash and paid down $2 billion in debt.
"Ford is making tremendous progress," Mulally said on a conference call. "Our transformation is working."
Strong earnings are a big victory for Ford and Mulally. The company has been far stronger than rivals General Motors and Chrysler (FIA.MI), gaining market share this year. But looking healthier than GM and Chrysler, both of which were in bankruptcy earlier this year, was hardly a great feat.
Ford still has a big debt load, something that GM and Chrysler were able to greatly reduce in bankruptcy. The company dropped long-term debt to $23 billion. But adding short-term debt and obligations to the UAW's retiree health-care trust, Ford's debt is estimated at $38 billion. It's a disadvantage, but Barclays Capital analyst Brian Johnson says Ford should have enough cash to meet its needs. [...]
Ford is succeeding, but it has to compete with failed companies who are unfairly being subsidized with taxpayer's dollars. Why is the government using our tax dollars to reward failure, and to compete against successful privately owned companies?
No comments:
Post a Comment