Ford Swings To Big 2009 Profit

This just in: the Ford Motor Company has announced that the automaker turned a profit in 2009, registering a $2.7 billion gains thanks in part to significant debt reduction moves and other changes. That is important to note because Ford, like so many other automakers, sold fewer models last year.

Ford’s gain reverses steep losses sustained for the previous three years. Moreover, Ford made money while its two American rivals—General Motors and Chrysler—were overhauled thanks to federal government orchestrated bankruptcies and billions of dollars in loans and grants. Ford avoided government assistance and saw its share of the all important US sales market increase despite fewer cars sold.

Saving Money

Belt tightening played a significant role in helping Ford make a profit last year. But the automaker also rode on the back of several success stories in the form of new models and technologies including, but not limited to the Ford Fusion and Fusion Hybrid, EcoBoost, Lincoln MKT, new Mustang, SYNC, all new Ford Taurus, and numerous product changes and upgrades.

Following the announcement of its profit, Ford management said that it should post a strong profit in 2010 without the benefit of accounting gains. This year Ford will be advancing its One Ford initiative where as many as six European models will find their way to the North American market.

New Models

In 2009, Ford began to import the first of these models, the Ford Transit Connect van. Late this spring the Ford Fiesta will be introduced, its “B” or subcompact segment model. By early next year an all new “C” or compact segment Ford Focus will hit the market followed by a European inspired Ford Escape, new minivan, and one other product.

Ford will also welcome a significantly updated Lincoln MKX later this year. Other models slated to be changed within the next 12-18 months include the Ford Explorer which will transition from an SUV to a crossover.

Big Debt

Ford is still carrying a significant debt load–$34.3 billion to be exact—while they’re also sitting on $25.5 billion in cash. Soon after Ford CEO Alan Mulally came onboard in 2006, the automaker hocked most of its assets to finance product development. That move paid off because when the stock market collapsed in 2008, Ford had the money they needed to press on while GM and Chrysler ran out of cash.

Ford’s gain comes as its chief Japanese rival struggles with a historic recall and product shut down. Toyota is expected to announce its second straight year of significant losses when their fiscal year ends on March 31, a stark contrast to the fortunes of the Blue Oval.

Source: Ford Motor Company