MercoPress. South Atlantic News Agency

Ford back on track makes one billion USD profit in third quarter

Booming sales in China and increased share of US market, plus draconian cost slashing helped the turn around

Ford, one of the big three of the US auto industry has announced profits of almost one billion US dollars between July and September thanks to increased market share and a successful cost-cutting program.

Pre-tax profit for the quarter came in at 997 million, compared with a loss of 161 million a year earlier. Revenue was 30.9 billion, down 800 million on a year ago.

The US carmaker said it was making “tremendous progress despite the slump in the global economy”. Ford's shares soared 7.6% following the announcement.

The firm also said it expected to be “solidly profitable” during 2011.

Ford cut costs by one billion during the quarter, bringing the total reduction for the year-to-date to 4.6 billion. This exceeds the target of 4 billion that the carmaker set itself for the whole of 2009.

Ford said these reductions came from lower manufacturing costs due to improved productivity and staff cuts. The carmaker also reported increased market share in the US and in Europe, and a 63% jump in sales in China.

“Our solid product line-up is leading the way in all markets,” said Ford boss Alan Mulally. “While we still face a challenging road ahead, our One Ford transformation plan is working and our underlying business plan continues to grow stronger.”

Unlike its rivals, General Motors and Chrysler, Ford has managed without a US government bail-out.

However, it has not escaped unscathed from the financial crisis and economic downturn.

The company has cut tens of thousands of jobs and closed factories to reduce costs.

It is also considering the sale of its Swedish brand Volvo to raise cash, after already selling off its luxury European brands Jaguar and Aston Martin and Land Rover’s to India’s Tata.

Last week, Ford announced that a consortium led by China's Zhejiang Geely was its preferred bidder for Volvo.