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How did Ford turn a profit?

Marketplace Staff Nov 2, 2009
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How did Ford turn a profit?

Marketplace Staff Nov 2, 2009
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TEXT OF STORY

Bill Radke: Ford just said it turned a profit. Let’s start with this morning’s surprise announcement from Ford. We’re joined by auto analyst Mike Wall at CSM Worldwide. He joins us live from Grand Rapids, Mich. Good morning, Mike.

Mike Wall: Good morning.

Radke: The experts were predicting a loss for Ford in the third quarter. How do you explain the billion-dollar profit?

Wall: Well there are a few things going on there. One, we’ve had some recovery in vehicle sales and production. In part spurred by the Cash for Clunkers program. And there was a significant amount of cost productions and facility-efficiency improvements that Ford’s been pushing across all of their plants.

Radke: Well let’s talk about its position with its rivals. GM and Chrysler got bailouts, Ford did not. How big a selling point is that for consumers?

Wall: It’s been sort of a subtle settling point that Ford’s been sort of touching on, just the fact that they’re sort of the independent American car company out there. And I think it has resonated with some of the consumers out there.

Radke: At the same time, Mike, Ford’s American factory workers just said no to some contract concessions. How divided is this labor relationship going to be for them?

Wall: It’s been sort of a dance out there for them in terms of navigating the waters of posting profitability and yet trying to get some sort of joint agreement that puts them on part with GM and Chrysler. That is a challenge. I think Ford is making some significant improvements on their efficiency side, so they’ll still be able to continue to do well going forward on that front.

Radke: Mike Wall at the market forecaster CSM Worldwide. Thank you.

Wall: Thank you.

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