Ford posts record profit margins

http://www.guardian.co.uk/business/2012/oct/30/ford-profits-defy-wall-street

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Ford has posted a third-quarter profit that trounced Wall Street forecasts, driven by higher vehicle prices and record profit margins of 12% in North America. The second-biggest US carmaker's strength in North America offset the effects of the sharp industry downturn in Europe – where Ford expects to lose at least $3bn (£1.9bn) over the next two years – as well as its lagging position in growth markets, such as China.

Last week the carmaker shed 6,200 jobs across the European continent with the closure of three sites including its Transit van factory in Southampton. Executives also left open the possibility of further actions if a recovery in Europe fails to materialise.

Ford's strong showing in North America reflects the benefits of chief executive Alan Mulally's "One Ford" strategy to build more cars and trucks on five global platforms by the middle of the decade, from the current nine platforms. Chief financial officer Bob Shanks said that this plan will serve as a blueprint for Ford's restructuring of Europe, although he added that there are limits on how much Ford can draw from its past experiences.

Ford of Europe is "much, much leaner" than the US operations were in 2006, Shanks said, adding: "Europe isn't North America. It clearly has excess capacity – which we're addressing – but if you look in other areas, it's very lean. We actually want and need to invest in other areas in the business to grow the top line."