Ford Motor Co.’s unexpected $2.3 billion second-quarter profit could signal the end of the worst downturn in recent automotive history for at least one of Detroit’s automakers, but Ford’s recovery still depends on the broader economy.
Finally, some genuinely positive news to report. Old Henry Ford (pictured) is no doubt smiling up in heaven right now! I’ve been telling people for the past year that Ford would emerge as the best of the Big 3, but no one (except those people who work for Ford) believed me. Now maybe they’ll listen. The formula for the carmaker’s success isn’t molecular physics—they started to make high-quality, reasonably priced, fuel-efficient cars that can compete against the imports. And the best thing is that they didn’t take any bailout money to do it.
Though Ford’s profit was due largely to one-time gains, consistent improvements in its underlying financials are sparking optimism among investors, analysts and union leaders that has not been seen for some time.
Ford shares gained 60 cents Thursday on the results, closing up 9.4 percent at $6.98 after a day of heavy trading that helped push the Dow over 9,000.
That’s a vote of confidence in Ford’s future, said Sean McAlinden, chief economist at the Center for Automotive Research. “This is a stock that, when this economy recovers, is going to $20,” he said. “I’d say we’ve got a hot auto company here in Michigan again.”
McAlinden predicted that Ford will replace General Motors Co. as the nation’s largest automaker. By next year, he said, more UAW members will work at Ford than at GM for the first time in history.
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