Ford Finally Turns a Profit
American car giant Ford has finally made an annual profit in 2009 after 4 years of constant decline. Figures have reported a $2.7bn (£1.7bn) profit for the year, which is a vast improvement on the previous year when they reported a $15bn loss. Ford have also said that they expect 2010 to be another positive profitable year.
The final quarter of 2009 showed a substantial $868m profit, which gives a good indicator as to how well the year has gone when compared to 2008s report of a $6bn loss. The improvement has been part due to the company cutting costs and reducing debt levels.
The number of people in the US employed by Ford fell by 9000 through the year due to buyouts and layoffs, after the need for cost cutting was clearly highlighted by a large fall in overall revenue for the year. The figure of $118.3bn was $19.8bn down on 2008s figures.
Challenges Ahead
Analysts have also said that Ford are benefitting from goodwill for avoiding bankruptcy, unlike their big ‘Detroit Three’ rivals General Motors and Chrysler. Both GM and Chrysler took billions of dollars worth of state aid and went into bankruptcy protection last summer.
“While we still face significant challenges ahead, 2009 was a pivotal year for Ford and the strongest proof yet that our One Ford plan is working and that we are forging a path toward profitable growth," said Ford president and chief executive Alan Mulally.
The automotive market in general struggled throughout 2009 due to a fall in sales during the downturn. This resulted in many governments introducing scrappage schemes that gave motorists with old cars a cash incentive to trade it in for a newer model.
A scheme such as this known as the ‘cash for clunkers’ scheme was brought into the US which also served to aid in Fords sales.Posted at 02:27PM Jan 29, 2010 by Kris Wigfield in The Economy | Comments[0]
