FILE - In this Jan. 26, 2010 file photo, Ford Motor Co. President and Chief Executive Officer Alan Mulally, talks about Ford's progress during the economic recession, during a news conference at the Washington Auto Show in Washington. Ford Motor Co. said Thursday, Jan. 28, it made $2.7 billion in 2009, its first annual profit in four years.(AP Photo/J. Scott Applewhite, file) (AP)

Surprise! A U.S. automaker makes money

Avoiding humiliating handouts is good for business. Ford turns a profit for 2009


Andrew Leonard
January 28, 2010 8:13PM (UTC)

Funny thing: Avoiding bankruptcy and government bailouts turns out to be good for business. Ford Motor Co. reported its first full-year annual profit since 2005 today. The turnaround is striking: The company made $2.7 billion in 2009 after losing $14.8 billion in 2008.

Some portion of that success can be attributed to good management. CEO Alan Mullaly, a newcomer to the auto industry who parachuted in from Boeing in 2006, should get credit for keeping a tighter grip on corporate finances and moving adroitly to remix the automaker's product line.

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But simply remaining standing while GM and Chrysler crashed and burned can not be underestimated as a marketing tool. There is no scarlet "B" (for bankruptcy or bailout, take your pick) branded on Ford's chassis, which surely played a role in consumer auto-buying decisions in 2009. The misfortunes of its competitors gave the company a huge advantage.

Of course, there's a chicken-and-egg issue at play also. If Ford hadn't been managed better than GM, it wouldn't have been in a position to benefit from GM's woes in the first place. But now there are signs that Ford is really growing into its role as the survivor who flourishes where others founder.

On Wednesday, Toyota announced it was expanding a massive recall of some of its most popular models, due to a problem with accelerator pedals manufactured by a parts supplier headquartered in Elkhart, Indiana. Ford's response: An offer of a $1000 rebate for Toyota owners looking to trade in their cars. (GM is offering incentives too, but it's kidn of hard to see them with that scarlet B getting in the way.)


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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