Henry Ford, who helped establish Detroit as the engine of America's motor industry, sits in a new Model T outside his Detroit plant soon after the car was introduced in 1908. Ford Motor Co reported a nearly 20-percent jump in second-quarter profit on Wednesday, the same day Detroit's bankruptcy hearing began.
On the day a court began hearing the Detroit bankruptcy case, Ford, the company that helped forge the city as America's motor industry capital, reported an almost 20-percent jump in profit.
The automaker's unexpectedly strong earnings for the second quarter of the year, handily beat industry analysts’ forecasts and delivered a measure of good news for a Motor City hammered by a long recession and, now, bankruptcy.
Ford reported a net profit of $1.2 billion, an 18.5 percent increase over the April – June quarter in 2012. On a per-share basis, Ford earned 30 cents, a 4-cent increase from a year earlier. When one-time charges are excluded, Ford earned 45 cents a share compared to the 37-cent consensus forecast, according to FactSet.
(See also: VW, Ford and GM "delight" customers, according to JD Power; Toyota Lags New APEAL study)
“Our strong second quarter with improved results in every region around the world is another proof point that our One Ford plan is continuing to deliver and is building momentum,” Alan Mulally, Ford president and CEO said in a statement with Wednesday's earnings release.
But while Ford narrowed its losses in Europe and began catching up on rivals in China, the carmaker hit it out of the park in North America, generating pre-tax profits of $2.3 billion -- its home market scoring records for both the second quarter and for the first half of 2013.
(See also: Sales Slipping, Toyota Cuts Prices, Boosts Incentives on Camry)
Mulally noted during a later teleconference that Ford achieved record sales of its battery-based products during the quarter – much of that growth coming at the expense of rival Toyota. But the real winner was Ford’s F-Series truck line-up which has been gaining strong momentum as the U.S. housing market bounces back, despite rising fuel prices.
Ford’s strong second-quarter performance led the maker to announce on Tuesday that it will boost its plans to hire new engineers and other professionals to 3,000 this year. It originally intended to bring onboard another 2,200 white-collar workers.
(See: Ford Wants to Boost White-Collar Hiring - But Faces Engineer Shortage)
That’s particularly good news for a Detroit region that owed much of its 20th Century affluence to Henry Ford and the auto production lines he established in the city to attract workers from all over the world to well-paying jobs.
Detroit has suffered some of the sharpest unemployment in the country during the Great Recession. In fact, Dan Akerson, Chairman and CEO of General Motors, told USA Today this week that the “macro-economics” of the auto industry’s worst downturn in decades takes much of the blame for Detroit’s filing for Chapter 9 protection, the largest metropolitan bankruptcy filing in U.S. history.
GM and Chrysler, as well as Ford, have been hiring aggressively over the last two years, but employment in the metro Detroit region still lags pre-recession levels. Nonetheless, the industry’s comeback, underscored by Ford’s second-quarter earnings report will help buoy the region and could offer a glimpse at a brighter future for the Motor City itself.
First published July 24 2013, 9:19 AM