Ford’s 3Q profits help to boost region
Workers assemble vehicles on the production line at Ford's Chicago Assembly Plant. The southeast side factory produces the Taurus and Lincoln MKS models.
(Photograph courtesy of The Times.)
After years of taking hits from customers and analysts, Ford dealership owner John Hennessy said it’s good to see the Blue Oval return to the black.
Hennessy, owner of River Oaks Ford in Calumet City, called it a “pleasant surprise” to hear the news Monday that Ford turned an operating profit last quarter for the first time since early 2008. He said the company with the trademark blue nameplate has worked hard to reduce costs and find a new direction.
It also helps that October sales at the dealership are improved compared to a year ago, and employees and customers are excited about the Fusion sedan and the locally produced Taurus vehicles.
“Right now, it’s nice to be on top of the wave,” Hennessy said. “Ford has done a great job on focusing the dollars they have on launching phenomenal new products.”
Ford Motor Co.’s profit in the three months ending Sept. 30 was $997 million, compared to a $161 million loss in the third quarter of last year.
A debt reduction helped the Dearborn, Mich.,-based automaker turn a $2.3 billion second quarter profit this year, though the company sustained a $424 million operating loss. The third quarter marked the first time the company recorded an operating profit since the first quarter of 2008.
When workers at the two Chicago area Ford plants are working full shifts or overtime to produce vehicles, it helps raise local income and spending, Hennessy said. And when there’s interest in and fast-paced sales of the vehicles, it helps keep the 75 people who work at his dealership busy.
Charles Bradford, partner of New York-based Affiliated Research Group, said steel companies such as ArcelorMittal, U.S. Steel and AK Steel have benefited from Ford and other automakers ramping up production and selling more cars.
The Cash for Clunkers federal sales stimulation program, which offered buyers discounts on new vehicles for several months, temporarily spurred demand, but Bradford said it also caused automakers to buy more steel to rapidly expand production and restock inventory. All three U.S. automakers increased steel shipments in the third quarter.
Bradford said steelmakers are projecting an increase in shipments in the fourth quarter even though the auto industry hasn’t completely shaken off the recession. Ford said it expects fourth quarter production to be up compared with levels from a year ago and third quarter 2009 production.
For the first time this year, United Auto Workers Local 588 President Bill Jackson said the Ford stamping plant at Chicago Heights is at full employment, with no union members laid off and production is at its highest level in a long time.
It appears better days are afoot, but Jackson and UAW Local 551 President Carlo Bishop said employees at their locals voted down proposed modifications to the current bargaining agreement by a 3-1 margin. Bishop said most members had problems with waiving their right to strike. And, after agreeing to concessions earlier in the year, they also were upset Ford had asked for another round of givebacks.
Bishop, who represents more than 1,100 employees of the Chicago Assembly Plant, said employees voted in March to give up their Christmas bonus, a 3 percent performance bonus and cost-of-living pay adjustments. The southeast side plant produces the Ford Taurus and the Lincoln MKS.
Voting on the new round of contract modifications ended late last week.
“They (employees) have made the statement they’ve made enough concessions,” said Jackson, who leads about 750 employees at the Chicago Heights stamping plant
Joe Hinrichs, group vice president of global manufacturing and labor affairs at Ford, said Monday in a statement the company was disappointed the changes weren’t ratified. He said they would improve Ford’s cost parity with other automakers.
The current four-year contract, which covers about 41,000 UAW members, expires in 2011.
Despite not achieving cost parity with the amendments, David Whiston, an analyst for research firm Morningstar, said the company still is in a better position to succeed than its domestic rivals.
Ford’s profitable third quarter helped buoy the stock markets Monday, with the Dow Jones industrial average, Nasdaq composite index and the Standard and Poor’s 500 index all posting gains.
