Ford resurgent

THE ISSUE

Ford Motor Co. last week announced a third-quarter profit of almost $1 billion, which was achieved through restructuring - without the aid of federal bailout money.

When Ford Motor Co. announced in late 2008 it would not apply for federal bailout money as the recession deepened, more than a few eyebrows raised on Wall Street and in Washington. Some thought the decision was arrogant, but the tally sheet for the third quarter of the year proves otherwise.

Ford reported a profit of almost $1 billion, its first profitable quarter in more than four years. Though the auto maker's sales were down 11 percent from July 2008, company officials are cautiously optimistic that restructuring and a focus on new vehicles will prove a winning formula.

By comparison, General Motors reported a sales decline of 33 percent from July 2008, and Chrysler a decline of 42 percent for the same period. Both companies accepted bailout money from Congress of about $15 billion, and are under direct supervision of the new "car czar."

Ford established private lines of credit in 2006, and began a restructuring program that year that focuses on offering vehicles that not only anticipate or meet many of the mandated federal regulations for fuel efficiency, but appeal to the buying public. Ford also closed 17 factories and cut 50,000 jobs - mostly through buyouts - and is maintaining production capacity at a level that meets demand. Ford also sold off some of its recent acquisitions, including the British automakers Jaguar, Aston Martin and Land Rover - all luxury vehicles that don't generate increased sales volume.

Many in Congress, as well as the public, have criticized the bailouts in the auto and financial sectors, fearing mounting debt and continued job layoffs that threaten the nation's economic viability. But Ford is the one big corporation that seems to have anticipated trouble and taken steps to set its house in order.

That's not to say that the auto market is in full recovery and that Ford won't need federal assistance if things worsen, but there are lessons to be learned from the company that should be shared with others.