The Ford Motor Company posted a third-quarter profit of almost $1 billion US. The U.S. automaker said Monday it expects to be "solidly profitable" in 2011. Meanwhile, General Motors announced its first monthly increase in US sales in almost two years. The news is triggereing hopes that the U.S. auto industry will recover.
Ford reported a net income of almost $1 billion in the third quarter - its first operating profit since early 2008. It was the only major U.S. automaker not to file for bankruptcy this year.
Ford's Chief Executive Alan Mulally says the company expects to be "solidly profitable" in 2011. "Clearly the move from break-even or better to solid profitability - it means that we'll be making money on all of our vehicle operations," he said.
Ford benefitted from a government program that offered car buyers rebates if they traded in their older vehicles for more fuel-efficient models.
"Cash for Clunkers" helped Ford cut costly incentives and raise production.
Among the U.S. "Big Three" automakers, Ford alone declined to take billions of dollars in government loans. GM and Chrysler received bailouts and are still struggling after emerging from bankruptcy.
"The public, you know, views Ford a lot more favorably now than they ever have for not taking the government bailout money," Mike Anderson, who owns a Ford dealership said.
Ford began cutting costs and slashing jobs several years ago. It has also come up with new models that are popular with consumers.
A recent [Consumer Reports] survey ranked 90 percent of Ford's models as "above average or better" in terms of quality.
Jeremy Anwyl is chairman of the online car buying website Edmunds. "When you look at where Ford was two or three years ago, versus where they are today, they have absolutely turned the corner," Anwyl says, "and the signs for them moving into next year, I think, are positive."
But Ford's troubles are far from over. The company is carrying more than $23 billion in debt and is not predicting a profit for 2010.
Members of the United Auto Workers who work at Ford overwhelmingly rejected a proposed agreement for more concessions to the company.
The plan would have brought Ford's labor costs in line with those of General Motors and Chrysler.