DEARBORN - Ford President of The Americas Joe Hinrichs opened the Americas Business Review Thursday afternoon at the WHQ auditorium by recognizing the company’s overall $2.6 billion pre-tax profit for the third quarter.
“It’s an exciting day,” he said. “We should really be proud of how the business is moving forward.”
When Hinrichs reported that Ford North America reported a $2.3 billion pre-tax profit, marking the 17th consecutive profitable quarter in North America, the leadership team gathered for the meeting responded with a round of applause.
“Seventeen in a row – it wasn’t long ago when that seemed like a dream. And six out of seven consecutive quarters with pre-tax profits above $2 billion,” he said. “I never want us to take this for granted. It’s a big deal.”
Ford’s U.S. market share for the third quarter rose from a year ago and retail sales were up 15 percent.
Hinrichs highlighted the strength of F-Series trucks, which sold more than 60,000 units each of the last five months; Fiesta sales, which were up 60 percent; Fusion sales, which were up 14 percent; and best-ever third quarter sales for the Lincoln MKZ.
Ford South America showed strong profitability in the third quarter, increasing its market share by 1.1 points versus last year.
“That’s a lot,” said Hinrichs. “It’s largely based on the Fiesta being added in production and also the strength of the Ranger and the EcoSport, which lead their segments.”
Ford of Canada also experienced strong profitability.
“Canada is the second most profitable market in the world for us so we never want to lose that appreciation for our Canadian friends,” said Hinrichs.
Though profitability was down in Ford of Mexico in the third quarter versus last year, the region did see market share growth.
“The team has done a good job for the full year continuing to whittle down the losses from last year to this year,” said Hinrichs. “So we are making progress in Mexico, albeit in a difficult sales environment.”
Hinrichs emphasized the importance of quality as it pertains to all of The Americas.
“Bending the curve to get positive momentum is always the biggest challenge,” he said. “Once you get that momentum going the flywheel keeps moving, but we don’t have that yet on the quality front.”
Matt VanDyke, director, Global Lincoln Marketing, Sales and Service, provided an update on the Lincoln Motor Company.
VanDyke said sales of the Lincoln MKZ are up significantly but “not where we want them to be.”
“We have to continue to work on conquesting, and we’re going to do that by continuing to adjust our marketing and advertising in order to drive new customers into the showrooms,” he said.
VanDyke showed the group the most recent Lincoln ad, Luxury Uncovered, which launched earlier this month.
“We’ve seen some great initial results from the campaign, some really good online activity and shopping results from that,” he said. “You’ll see us really continue to focus on telling the compelling product story on a very consistent, ongoing basis.”
VanDyke also emphasized the importance of quality, saying that it is paramount to Lincoln’s success.
VanDyke also talked about how important the China market will be for Lincoln, as it is projected to be the single largest luxury market in the world by 2015. He said research shows that favorable opinion for Lincoln in China is higher than Lexus, but there is still much work to do.
“We’re seen as a prestigious brand in China but people are still not familiar with us so we’re really going to have to work hard to tell the Lincoln story in that large market,” he said, noting that Lincoln’s performance in China is linked to The Americas’ success since all of the product in China will come from North America.
Jim Tetreault, vice president, North America Manufacturing, discussed the work that has been done to increase production capacity in North America.
Tetrault said that in 2011, Ford had about 2.7 million vehicle wholesales in the U.S. This year, that number increases to 3.1 million. “We’ve had to increase our production quite a bit, by 600,000 units in the last 18 months,” he said.
Tetrault said that the company’s 11 plants in North America are producing an average of 50 percent more vehicles compared to a decade ago.
Tetrault also discussed the significance of flexible capacity, the ability to produce more than a single model in the body shop.
“This year we’ll have three-quarters of our plants capable of producing multiple models and within two years the only plants that won’t be capable of producing multiple models will be our truck plants and that’s simply a matter of scale and process,” he said. “Trucks are very unique and very high volume for us so truck plants will remain unique.”
Hinrichs concluded the third quarter Americas Business Review by recognizing that the company’s successful financial performance in The Americas is the result of teamwork.
“We can’t do it without our suppliers providing parts. We can’t do it without dealers selling the vehicles and all of the different skill teams in our business contributing,” he said. “Each one of you is making a difference, and it’s all paying off.”