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Ford charges ahead, with sales picking up

When a U.S. automaker posts a profit of $997M USD, it's sure to turn heads in the investment community in this economic climate.  After all, automakers these days just aren't turning profits.  Thus it's exciting news for Ford, the only member of the Big Three to refuse nationalization, to turn a profit in its fiscal third quarter.

In Q1 and Q2, Ford lost $4.7B USD as the recession continued to churn.  Fortunately, though, Ford had positioned itself well, mortgaging many of its assets and cutting costs before the worst of the recession hit.  Because of this, it had enough of a cash cushion to stay independent and avoid bankruptcy and a government takeover.

Now Ford has posted a positive cash flow of $1.3B USD -- the most since Q2 2007.  Net profit, as mentioned were up to $997M USD, up from a $161M USD loss from the year before.  Better yet, it says more good times are in store for Q4 2009 and that it will be "solidly profitable" by 2011.  Chief Financial Officer Lewis Booth cheered the news, stating, "[The positive cash flow is] a huge deal.  Our third-quarter results clearly show that Ford is making tremendous progress despite the prolonged slump in the global economy."

Erich Merkle, an analyst comments, "Ford proved they can be profitable at much lower sales levels. A lot of it came from cost-cutting but also from market share gains.  Now, as the market starts to turn and sales volumes start to recover, Ford should be solidly in the black next year -- certainly ahead of schedule."

Overall Ford's revenue was down just slightly, dipping $800M USD to $30.9B USD, but this was easily compensated for, thanks to cost cutting.  One promising metric is that every one of Ford's major regions -- North America, South America, Europe and Asia Pacific -- reported a pre-tax operating profit.

A key factor in Ford's return to success is its industry-leading SYNC in-car electronics system, made with the help of Microsoft.  Tying together such diverse components such as MP3 audio, turn by turn navigation, news, weather, and more, the system is increasing the value of Ford's vehicles.  Another crucial technology is Ford's EcoBoost engines, which use turbocharging and direct injection to produce better fuel economy and power with a smaller engine.  Ford is slowly rolling the tech out over its entire lineup.

Sales of Ford's high-tech green offerings were also up.  Sales of Ford hybrids in the first three quarters totaled 26,016, up 73 percent from the previous year.  Ford is just barely trailing Honda, which sold 29,958 hybrid in nine months (up 8 percent).  At its current growth rate, Ford should soon leap Honda and challenge Toyota for the hybrid sales crown.  It still has a ways to go before hoping to match Toyota, the world's largest automaker, in hybrid sales (Toyota sold 144,000 hybrids in nine months).

Ford is looking forward to releasing electric vehicles next year.  Next year the automaker will launch its 2010 Ford Transit Connect BEV to U.S. and Canadian markets.  The electric vehicle has a targeted 80 miles-per-charge range, provided by batteries from Johnson Controls-Saft.  It is designed and produced through a partnership with Azure Dynamics, which provides the Force Drive battery electric drive train.  The vehicle is targeted towards businesses.

Then in 2011, Ford will release a plug-in electric version of its Ford Focus hybrid.  A prototype retrofitted EV focus has already been making the rounds on the Jay Leno Show in the "Jay's Green Car Challenge" spot.  Rounding off Ford's upcoming tech is a new electric vehicle and hybrid platform, due out in 2012.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer

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