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Old 04-24-2008, 12:40 PM   #1 (permalink)
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Ford, making money? It must be a mistake...

I guess not...

DETROIT — The Ford Motor Company said on Thursday that it earned $100 million in the first quarter, after a loss in the same quarter a year ago, a surprising improvement amid a slump in the United States market that has cut sales of lucrative trucks and sport utility vehicles.

The company also warned of the possibility of more cuts in its work force.

Ford’s automotive operations earned a pre-tax profit of $669 million, compared with a loss of $895 million a year ago, though the company continued its lengthy streak of money-losing quarters in North America.

The company reaffirmed its commitment to becoming profitable by next year in North America, a crucial tenet of its restructuring plan known as the Way Forward, even as high gasoline prices and a sour housing market sap demand for big vehicles.

To reach its goal, Ford’s chief executive, Alan R. Mulally, said the automaker may need to eliminate more shifts at truck assembly plants and offer more buyouts. If not enough workers leave voluntarily, he said, layoffs are possible.

“The underlying business is improving and we are cautiously optimistic that, despite the external difficulty, our plan is working,” Mr. Mulally, who joined the automaker in September 2006 after previous turnaround efforts failed to gain traction, said on a conference call with reporters and analysts. “Clearly it’s a more challenging environment than when we laid out the plan.”

The first-quarter profit, equal to 5 cents a share, is up from a loss of $282 million, or 15 cents a share, in the period a year ago.

Shares of Ford rose more than 10 percent, their biggest gain in nearly two years, to $8.11.

Analysts had expected Ford to again report a loss in the quarter. Ford said it still expected a loss for the year, but less than the $2.7 billion it lost in 2007.

Since the automaker lost $12.6 billion in 2006, it has cut about a third of its hourly work force through buyout and early retirement offers. Another 4,200 workers accepted a second round of buyouts offered earlier this year, fewer than the company had hoped.

As a result, Mr. Mulally said Ford plans to offer more buyouts, but on a “plant-by-plant and vehicle-by-vehicle” basis, unlike the previous deals that were available to everyone.

“At this time we don’t have any more plans for a company-wide buyout,” he said.

While previous job cuts were aimed at making the company smaller, this time around Ford is trying to persuade workers to leave so that it can hire replacements at significantly lower wages, under the contract it signed with the United Automobile Workers union last fall. The agreement lets Ford pay new workers as little as $14 an hour, about half the current rate, with fewer benefits. As much as a fifth of the company’s work force can be on the so-called second-tier pay scale.

Ford said costs associated with personnel actions, a reduction in the size of its United States dealer network and other special items reduced earnings in the first quarter by $416 million, or 15 cents a share.

Revenue for the quarter, excluding special items, was $39.4 billion, down from $43 billion in the January-to-March period a year ago.

Ford said it excluded revenue from its British luxury brands, Jaguar and Land Rover, which it has agreed to sell to Tata Motors of India and that total revenue would have been slightly up from last year if those brands were included.

Ford will gain a net $1.7 billion from the sale of Jaguar and Land Rover, which was announced in March and is expected to close in the second quarter.

North America was the only geographic region in which Ford did not earn a first-quarter profit. The company, which fell to the third-largest seller of vehicles in the United States last year after being passed by Toyota, lost $45 million in North America, a considerable improvement from the year-ago loss of $613 million.

Ford said $1.2 billion in structural and product costs in North America were partly offset by slower sales of more profitable vehicles like pickups and S.U.V.’s. Sales of its full-size pickups fell 13 percent in the first quarter.

“The restructuring in North America is taking hold,” Mr. Mulally said, “and we will continue to take actions to stay on our plan, and our product pipeline is full.”

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