A surprise $2.3 billion second-quarter net profit by the Detroit-based Ford Motor Co. has substantiated the automaker’s position as the healthiest of the US automakers, showing that the company continues to grab market share from its competitors, General Motors and Chrysler.
The net profit figures, which were better than the analysts had projected, resulted mainly from gains that Ford reaped from restructuring its debt during the quarter. The $10.1 billion in debt reductions undertaken by the company, which cut annual interest payments, were supplemented by its decision to slash 1,000 additional blue-collar jobs with buyout and early retirement offers.
In case the debt-restructuring measures had not been carried out by the company, it would have posted a $424 million loss from its core operations – which still would have been narrower in comparison to the $1.03 billion loss it reported a year back!
Commenting on Ford’s evident signs of stability amid low vehicles sales, analyst Aaron Bragman, at consulting firm IHS Global Insight, said that it was essentially the Ford CEO Alan Mulally’s measures towards restructuring and product improvements that helped it post amazing second-quarter results.
Mulally – who joined Ford after leaving aircraft giant Boeing Co. in 2006 - kept Ford from going the bankruptcy way, by mortgaging its factories and its blue oval logo to borrow $23.5 billion before the credit markets freeze set in!
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