http://media.ford.com/images/10031/4Qfinancial_release09.pdf
This is for the many of you who have shared a class with me over the past several years where we've had some lively discussions about Ford and the automobile industry: OMG! If you had told me 10 years ago that Toyota would be having multi-year negative profitability and simultaneous disastrous quality problems in 2010, I would have responded that that is not possible.
If, at that same time, you had told me that Ford had "survived" to 2010 without being "bought" by Toyota (or some other company) or going out of business, I would have responded that that is not possible.
It would appear that I'm living in an alternative universe because Ford's 2009 Annual Profit Report came out today and Ford's Full Year Net Income was: $2.7 Billion! (Today's press release is attached). That is Ford's first annual net profit since 2005!
When Bill Ford had the brilliance and humility to hire Alan Mulally (as CEO) from Boeing in 2006, I thought it was too late. When Mulally mortgaged the entire company (including the "Logo"!) a few months later for the tidy sum of $26 Billion, I thought it was a desperate act!
Ford increased its market share in 2009 after watching it slide for 10 years.
Ford is building vehicles that people want to buy: the 2010 Fusion Hybrid and Ford Transit Connect were named North American Car and Truck of the Year, respectively. The Ford Fusion was named Motor Trend's 2010 Car of the Year.
Mulally places the highest priority on communicating with employees and customers (listening to the customer - what a concept!).
Toyota took 60 years to get to a world market share of 10%. Toyota decided in 2002 to strive for a 15% world market share which would put them at # 1 in total units produced. In 8 years, they have grown too fast and wasted 60 years of progress.
At the end of the worst recession since WW II, Ford has made a comeback worthy of its iconic history!
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Definitely an interesting turn of events. Also just saw in the news that Honda is recalling about 650,000 cars due to a fire danger from a switch defect.
ReplyDeleteFord's turn around seems too quick to me. These were preliminary financials, I'll be interested to see the final statements, but from what I can tell most of the profit is due to "gains on debt-reduction actions". I think 2010 will be a sign whether Ford is around for good or not.
I guess this means you will have to revise some of your slides now.
Connor - All your points are good (as they usually are!). But, I think the important point here is that Ford could show "something" positive financially (regardless of the accounting rules) when Toyota, GM, and Fiat Chrysler could not. Even more important, Ford's market share went UP in 2009 a full percentage point, which, as you know, has a huge effect on the bottom line. On 2010, Mulally has already stated that Ford will be profit positive for the year - that's a year ahead of the original forecast which was no positive profitability until 2011. On slides, I have a headache!
ReplyDeleteWell its good to see they are trimming the fat. America will still buy Ford and let us hope they don't have a recall as well!
ReplyDeleteI actually test driven a few of the Fords, mainly the Fusion. It does have some pretty nice features.. love the rear camera/sensing system.
I'm hopefully for Ford, we can't have all of our American auto manufacturers looking like idiots.
Minh - Ford used the same accelerator system in 1600 small buses made by it's China joint venture last year. Those units have been recalled even though no problem was encountered.
ReplyDeleteOn the Fusion, one of the most interesting things about the Fusion Hybrid is that it is a standard sized car with the "comforts" that size vehicle can have, and yet it gets 41 mpg "city"!