Ford profitable in third quarter: Canadian workers approve new deal

For the first time in almost five years, Ford Motor Company posted a third-quarter profit of nearly $1 billion US. The North American profit of $357 million is the first after a string of  seventeen quarterly losses. The company's share price rose to $7.50 and prompted Moody's to upgrade its rating of Ford from B3 to Caa1. Ford claims that it will be "solidly profitable" by 2011. Ford is the only one of the big three automakers not to declare bankruptcy this year.

Ford's president and CEO Alan Mulally said that the company is confident that "we have the right plan and are taking the right actions" to make Ford "lean" and profitable. Mr. Mulally reminded investors, and the public, that Ford is different from the others and "not taking any taxpayer money."

The company's attempts to reposition itself as "different" seem to be paying off in other ways. Consumer Reports recently declared Ford's products to have "world-class reliability" on a par with Toyota and Honda for quality.

Meanwhile the United Automobile Workers union rejected a deal that would have helped the company cut labour costs even further, matching concessions approved at Chrysler and GM earlier in the year. That deal would have frozen wages for new workers until 2015 and barred strike action for higher pay or benefits. It is not clear at this time how the autoworkers' rejection of further concessions will affect product commitments and job security already negotiated.

In Canada, Ford's 7000 workers approved by 83% a deal that freezes wages until 2012 and sees the closing of an assembly plant in St. Thomas, Ontario. The workers had little choice: Ford had threatened to pull out of Canada altogether if labour costs could not be got under control. The new deal keeps 10 percent of Ford's North American production in Canada and includes a commitment to build two more vehicles, and invest $2 billion in its Oakville and Windsor, Ontario plants.