KEY POINTS:
Ford, the world's No 3 car maker, was unexpectedly back in profit in the first three months of the year, confounding doubters who believed the weak US market would cause its turnaround plan to stall.
In fact, the company had wrung more cost savings from the sprawling business
than previously expected, and bottom-line earnings came in at $100m where Wall Street had been forecasting another quarterly loss.
Even the US business, which has been hamstrung by the high costs of pensions and health care for retired workers, was closer to break-even than expected, and investors n for perhaps the first time n appeared to believe the chief executive, Alan Mulally, when he again promised to return that business to profit in 2009.
He said that 4,200 more redundancies in the past three months took the total number of North American jobs shed since late 2005 to 40,000, and he said there would be more targeted job losses to come.
Remaining employees would be put on reduced time if there was reduced demand for new cars.
"Plant by plant and vehicle by vehicle, we will size that production capacity to that demand," Mr Mulally said.
To that end, Ford cut the number of cars it plans to produce this year, in line with its reduced expectations for the industry as a whole.
US consumers are likely to buy between 15.3 million and 15.6 million vehicles this year, it predicted, and Ford is likely to win about 14 per cent of that.
Falling house prices, rising petrol prices and job worries are making Americans less willing to splash out on a new car.
In the next three months, Ford will produce 710,000 vehicles in North America, 101,000 fewer than last year.
Analysts cheered a particularly good sales performance overseas.
Its European business - excluding Jaguar and Land Rover, which it is selling -posted a 19 per cent rise in revenue, compared to the 8 per cent fall in North America.
Its businesses in South American and Asia were also stronger.
Mr Mulally was hired from Boeing's commercial aeroplane division to lead Ford in 2006, when Bill Ford - grandson of the company's legendary founder, Henry - decided he was not the best chief executive for the business during a difficult restructuring.
Investors reacted warmly to the results, sending Ford shares up more than 10 per cent by lunchtime in New York.
- THE INDEPENDENT
