Ford hit profit for the third year in a row 0

Ford’s staffs are set for a bonus after helping the company make profit for the third year in a row. The profit margin itself was the largest for 13 years.

Staff bonus

Thanks to strong sales in North America, Ford’s losses did not make much of an impact. In effect 41,600 hourly staff throughout America will all get $6,200 as a bonus which is an increase from $5,000 the previous year.

The hourly worker bonus is the second largest in history of it’s type. 1999 saw an average of $8,000 being paid out on average.

Accounting trick

The company’s 2011 profit was $20.2 billion thanks to an accounting manoeuvre, with the figure standing at $12.4 billion beforehand. That meant that it was a car company’s second highest total in history. The complicated procedure signalled that Ford expected to continue to make profits.

Recovery of losses

Back in 2006 right down to 2008 right in the middle of the worldwide car market debt crisis, Ford lost a staggering $30.1 billion. Ford’s profit ever since then stands at $29.5 billion. In what is an absolutely remarkable turnaround, Ford has almost recovered all losses.

The accounting gain means that, on paper, Ford has recovered nearly all of the $30.1 billion it lost from 2006 through 2008. In the three years since, the company’s profit totalled $29.5 billion as mentioned before.

Alan R Mulally

Ford CEO Alan R Mulally is mainly the man to praise for the recent turnaround. Ever since joining back in 2006, he has mortgaged assets to bring in more cash. Thanks to 11 consecutive quarters whereby the company made profit, Ford were allow to keep deferred tax assets.

North America saw a pretax operating profit throughout North America last year of $6.2 billion. The European and Asia Pacific Africa sales saw a loss of $119 million. Losing out in the fourth quarter meant that that Ford’s performance clearly needs to improve in Europe. Losses stood at $190 million from $51 million in 2010.

Ford hope that their sales continue to increase and their operation runs more efficiently following the strategy of One Ford.