DEARBORN -- Ford’s North American team was urged to take a few hours to celebrate some good news before getting back to the business of delivering the ONE Ford plan.
Mark Fields, president, The Americas, was greeted by a standing ovation by the packed auditorium at Ford World Headquarters and applause punctuated the session more than 15 times as results were reviewed from a quarter in which the North American unit registered a pre-tax profit of $357 million, compared to a loss of $2.6 billion a year ago.
“Take some time and savor this,” said Fields. “Today is a pretty big milestone.”
Indeed it was, as the North America unit turned its first quarterly profit since the first quarter of 2005.
Those results helped Ford surprise Wall Street on Monday as the automaker earned a pre-tax operating profit of $1.1 billion for the third quarter, an improvement of $3.9 billion from a year ago.
“We talked a lot in the past about cash burn and this quarter, we can talk about ‘cash earn.’ We’re starting to put money back into the coffers,” said Fields.
He was joined on-stage by senior leaders who further explained the quarterly results for the Americas.
John Felice, general manager, Ford Lincoln Mercury Marketing, said the company’s U.S. market share had increased 2.2 percentage points during the quarter compared to last year as the Ford, Lincoln and Mercury brands all posted sales gains.
Vehicle net pricing was also up $1,800 over 2008 and Ford brand equity was at an all-time record high, said Felice.
Paul Stokes, executive director, Purchasing, said Ford has achieved $802 million in material cost reductions this year but cautioned that the supplier base remained fragile in a weakened economy.
Joe Hinrichs, group vice president, Manufacturing, said that the rejection announced Monday of contract modifications by United Auto Workers locals in the U.S. would not hinder Ford in the near term.
“We only have a big disadvantage if changes are not made in the 2011 contract,” he said.
Hinrichs pointed out that the Canadian Auto Workers had just overwhelmingly approved contract modifications. Employees have also made 10 percent efficiency gains in each of the last two years, he noted.
Next, Derrick Kuzak, group vice president, Product Development, detailed the product launches coming in 2011, including Super Duty, Fiesta, Explorer and Focus.
“We’re confident with this plan and that this team will deliver continuing product excellence,” said Kuzak.
Providing insights into current and future U.S. sales results was George Pipas, manager, Sales Analysis.
He noted that small car sales have increased to 21.6 percent of the market and that 49 percent of the buyers under 30 years of age purchase in this segment.
“That’s a huge opportunity for Ford Motor Company,” said Pipas, who also forecast that the mid-sized Ford Fusion would set a full-year sales record in the next two months.
The Americas leadership team also took audience questions on employee benefits, hourly cost savings, Ford’s improving balance sheet, the global supply base and reaction to Ford’s latest series of 15-second TV ads which feature actual customers touting what they like about their vehicles.
As the meeting ended, Fields told the audience that now was the time to concentrate on a bigger transformation – taking Ford from crisis mode to world-class automotive leadership.