Ford CEO Alan Mullaly Turns a $2.7 Billion Profit Sooner than Expected
When the blue oval’s current CEO, Alan Mulally arrived at the Ford Motor Company in 2006, he was faced with the task of turning around one of the world’s largest car builders in the face of uncertain fiscal times and since then has been hard at work to improve production, cut waste, sell off valuable assets and bring the entire Ford family closer together. Mulally’s best case projections saw the American automaker getting back in the black sometime in the year 2011, however after a tumultuous 2009, he can be proud that the FoMoCo has turned its first annual net profit in the past four years and is looking promising for at least two more to come.
The good news was evident on Wall Street this morning with Ford’s stock rising by 1.9%, or $0.25 a share, up to $11.80. The good news for investors came after the automaker’s books showed that they took in a total of $118.3 Billion in 2009, and after paying off all of their operating costs, turned a $2.7 Billion profit. These results are outstanding considering that the year before the blue oval’s bean counters reported a loss of $14.7 Billion, that’s right, billion with a B.
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However Ford CEO Alan Mullaly isn’t spending too much time on cloud nine, saying that "Consumer spending growth in the U.S. and Europe is likely to remain below trend in 2010,” while “The economy remains soft in many areas of the world." Aside from an uncertain marketplace, Ford’s single largest concern is their sizable amount of debt, a number that totaled $34.3 billion at the end of 2009, almost twice as large as the next biggest fish in the pond, General Motors, although unlike bowtie boys, they didn’t have to file for Bankruptcy protection with the U.S. Government.
The largest part of the automaker’s success can be attributed to their in house lending arm, Ford Motor Credit. Bringing in $1.3 Billion worth of bacon compared to a $1.5 Billion loss just one year earlier, it is anticipated to remain profitable throughout 2010, however not quite as much as in 2009. Things are also looking up around the world for the Ford Motor Company. Their South American profits registered in at $369 Million and Europe contributed another $305 Million to the cause, both before being taxed. Even the lesser Asian, Pacific and African combined markets accounted for a $19 Million profit as opposed to an equally large loss in 2008.
While the sale of both the well established English luxury car builders Jaguar and Land Rover to the Indian based Tata Motors in 2008 aided the blue oval’s efforts, Ford hopes to net even further from the future sale of the safety conscious Swedish subsidiary Volvo, the only one of Ford’s subdivisions that was not turning a profit, the Chinese Geely Holding Group.
Tomorrow is certainly looking brighter for the Ford Motor Company with their new focus on selling smaller vehicles on a global scale, the Dearborn based automaker has reportedly increased their projected first quarter production up to 570,000 units compared to their earlier estimate of only 550,000 vehicles.
Source: Wall Street Journal