Ford announced today that the automaker posted a $100 million profit for Q1 2008, which is a $382 million increase over the same period last year. Most of the profit can be attributed to strong sales in Europe and South America, which helped offset the declining US market.
Ford posted a pre-tax gain of $739 million in Europe and $257 million in South America. Unfortunately North America posted a pre-tax loss of $45 million, but on the up side it was an improvement over the same period last year where Ford lost $613 million.
“The improvement reflected cost reductions of $1.2 billion, including lower structural and product costs,” Ford said in a statement. “These improvements were partly offset by unfavorable volume and mix, and net pricing.”
With strong sales in Europe and South America, Ford's remaining challenge is to improve its US operations and return it to profitability by 2009.
Full Story: Motor Authority
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Comments (12)
That's an easy answer. Make Ford Europe = Ford US.
Posted by John Kimble | April 24, 2008 8:34 AM
Posted on April 24, 2008 08:34
and maybe, maybe, they sold Jaguar and Landrover....
Posted by waldorf and statler | April 24, 2008 8:34 AM
Posted on April 24, 2008 08:34
I wasn't even aware it was possible for an American car company to turn a profit....isn't this the first time this has happened since 1960?
I do find it amusing (thought not surprising) that most of these profits came from Europe...hmm, maybe that has something to do with the fact that their European division actually produces quality cars instead of bland crap.
Posted by Totenglocke | April 24, 2008 9:40 AM
Posted on April 24, 2008 09:40
@waldorf: didn't they LOSE money from selling JagLR? The selling price for JagLR is a lot less than what they paid... which means that the FoE picture is actually better than it appears?
Posted by jonathan bair | April 24, 2008 11:06 AM
Posted on April 24, 2008 11:06
Go Ford!!
Posted by FRD | April 24, 2008 11:22 AM
Posted on April 24, 2008 11:22
They did lose money one the Jag / LR deal overall, but they still got a bunch of cash to bolster their numbers for this quarter.
Posted by gm0n3y | April 24, 2008 12:46 PM
Posted on April 24, 2008 12:46
"Most of the profit can be attributed to strong sales in Europe and South America, which helped offset the declining US market."
Ford SHOULD learn something from that fact.
Time will tell.
Posted by kw | April 24, 2008 1:08 PM
Posted on April 24, 2008 13:08
No, any cash they received goes onto the balance sheet. The sale of the divisions would actually show up as a loss on sale of assets and actually REDUCE the net income (and EPS) by the amount of loss, net of any tax implcations.
Posted by darkcreole | April 24, 2008 1:20 PM
Posted on April 24, 2008 13:20
Dropping Land Rover and Jag was a huge boost towards getting rid of Fords debt. The next step is to make all Ford cars globalized to save even more money and incorporate new technologies across the board. CEO Alan Mullally is the best thing that’s happened to Ford in years. He is the very reason why Ford is turning a profit. Unlike prior CEO’s of Ford this guy truly knows how turn companies around, he did it with Boeing and now he is doing it with Ford.
Posted by SteelCity1981 | April 24, 2008 3:04 PM
Posted on April 24, 2008 15:04
Good for Ford!
@ Darkcreole
It's good to know I'm not the only accountant that reads TR. : o )
Posted by Cheap Car Lover | April 24, 2008 3:07 PM
Posted on April 24, 2008 15:07
It's true that Ford sold LR and Jag for less than they purchased them, however, you need to look at what types of deals Ford has in terms of supplying parts for other auto manufacturers at this point as well.
And this isn't including the fact that Ford pillaged the technology of both companies and is finally really starting to integrate that technology into all their brands. I wouldn't be surprised to see a Mazda built on a Volvo platform (it'll happen next year or in 2010, btw) and use a bunch of technology from Jag for the engines (their variable valve timing systems came from Jag, I believe)
And surprisingly, It was actually Ford Jr who started the whole program that Mulally is running with. He fired the previous CEO, started a bunch of changes, and hired Mulally to continue improving the company and the brand.
T
Posted by Teldar | April 30, 2008 2:02 PM
Posted on April 30, 2008 14:02
@Teldar:
Actually the Mazda 3 is on the same platform as the Volvo S40. The Ford Edge uses componentry from the Volvo x90.The "new" taurus/500 uses many Volvo parts. It is already happening but I see that as a positive thing for Ford. Use the safety expertise from Volvo, the driving dynamics from both Mazda and Volvo and some engine tech from Jaguar, and Ford is well on its way to produce world class cars.
Posted by longdxcommuter | April 30, 2008 3:40 PM
Posted on April 30, 2008 15:40