Ford makes a surprise billion dollar profit but CEOs should not be quick to run out and buy Ferraris

November 2, 5:33 PMExotic Car ExaminerKae Davis

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Ford might have shown a billion dollars in earnings, but they have turned labor disputes upside down

www.wreckedexotics.com

Ford is the only large scale American car manufacturer that is not on the government dole. In a surprise announcement, they have actually reported a, "net income of nearly $1 billion in the third quarter and forecast a "solidly profitable" 2011" according to press releases and the Associated Press announcements Nov. 2, 2009.

Photo left: Ford GT wrecked shows itself to be a little bit country, but in this case way more rock and roll. [Wrecked Exotics]

"The automaker said Monday earnings were fueled by U.S. market share gains, cost cuts and the Cash for Clunkers program, which drew flocks of buyers to showrooms this summer. Ford's shares rose 53 cents, or 7.6 percent, to $7.53 in afternoon trading..." writes AP.

According to Detroit news reports, "The latest results signal that Ford's turnaround is on more solid ground. The company lost more than $14.6 billion last year and hasn't posted a full-year profit since 2005. While it made a profit in the second quarter, that was mainly due to debt reductions that cut its interest payments."

Now, however, they have shown themselves to be operating in the plus.

Does that mean the CEOs of Ford are making better cars [more appealing to the general public] or are they simply engaging in smarter marketing and across the board cutting costs?

Spokesperson Mike Rowe, favorite show host of guys and gals who watch the Discovery Channel cable television show "Dirty Jobs" has done a lot to promote the Americana angle of Ford with regard to mass market appeal, common sense, and Ford's legendary durability -- especially regarding their trucks.

AP says, "Ford's key North American car and truck division posted a pretax profit of $357 million, the division's first quarter in the black since early 2005. Ford cited higher pricing, lower material costs and increased market share for the improvement."

Looking ahead to the 2011 year, Ford executives say,

Ford's plan to create demand and get better prices for its products, coupled with cost cuts, gave the company confidence that it will make money in 2011, Booth said.

Insiders are not 110% convinced, however, that the company heads are in the clear yet.

Thanks to Ford's difficulties hashing out compromise terms with their labor unions, they speculate,

... Ford still faces obstacles in its turnaround.

Why the doubting Thomas concerns?

On Monday, the United Auto Workers union said its members overwhelmingly rejected a deal that would have brought Ford's labor costs in line with rivals General Motors Corp. and Chrysler LLC.

Seventy percent of production workers and 75 percent of skilled tradesmen such as electricians and pipefitters voted against it. The union said it would not return to the bargaining table.

In addition,

The third-quarter profit makes it extremely unlikely that the company will push to head back to the bargaining table before the current UAW contract expires in the fall of 2011, and union leaders also are unlikely to take another deal to the membership, Chaison said.

There are also talks of Ford moving it's production facilities to Canada -- something that could easily ruin their [up until now] steadfast American image.

As such, CEOs who should be proud of their efforts to turn the corporation around in 2009 should be extremely humble about disclosing profit earnings.

Case in point -- now that the happy news has been told to help build confidence in the brand name and to build new interest in stock shares for potential investors, short sighted blue collar workers are disgruntled and feel as if they are being slighted by white collar managers.

Gary Chaison, a professor of labor relations at Clark University in Worcester, Massachusetts, "I think the company has no credibility asking for concessions now, and I think the leadership is quite embarrassed for making a case for concessions."

That means no Ferraris for you yet, CEO boys... but when the capitalist mentality workers finish gouging out their just desserts and pound of flesh from Ford's profits, if there is anything left in it for you in the way of bonuses for ensuring the company did not go belly up and the workers all have a place to keep their desk, we'll be ready to sell you those Ferraris and other favorite exotic cars. You bet.

Our socialized medicine is on the road and track -- and we're proud to hear of American capitalists working to achieve professional success.