Ford returns to profit after four years – having dodged bankruptcy

Published on Thursday 28 January 2010 20:42

FORD has banked 2009 profits of $2.7 billion (£1.7bn), the US car maker's first annual profit in four years, writes Scott Reid.

The group – the only one of the so-called Detroit Three not to reorganise under a government-supported industry rescue plan – also expects a profit this year amid market share gains and a slow sales recovery.

Ford attributed the full-year profit in part to cost-cutting – some 9,000 jobs were shed last year from an 89,000-strong workforce – gains from debt-reduction efforts and robust results from its financing arm.

Analysts said the firm was also enjoying goodwill for avoiding bankruptcy. Rivals General Motors and Chrysler both received billions of dollars in state aid and entered into bankruptcy protection last summer.

Ford repeated its forecast that 2011 would be "solidly profitable," but chief financial officer Lewis Booth cautioned that the company still had to take steps to address its "uncompetitive balance sheet" and was watching for more signs that the economic recovery would continue.

"The single most important thing is to see the economic recovery continue," he said. "We are worried about how fragile that may be."

For the fourth quarter, Ford posted a profit of $868m compared with a year-earlier loss of $6bn. Meanwhile, Ford has halted production of some Transit vans built by a joint venture in China because they contain pedals built by the same company behind the accelerators in Toyota's sweeping recall.

Only about 1,600 of the Transit vans have been produced to date.

Ford chief executive Alan Mulally said he believed the China production problem was an isolated incident.