Thursday, July 23, 2009
The pride of the US auto industry demonstrated why it was the only major US automaker to avoid a government-sponsored bankruptcy. Ford posted net income of $2.3 billion or 69 cents a share for the second quarter. This was a huge improvement over the $8.67 billion it punted last year in the same period. The company still managed to burn through $1 billion in cash for the quarter, which was less than analysts' expectations. Of course, Ford's profit came largely from a $3.4 billion gain it received related to its debt-restructuring in April. Excluding the one-time gain, the company would have narrowed its quarterly loss to $424 million. Revenues were also down from $38.6 billion in last year's period to $27.2 billion. It must be painful sitting around and waiting for the economy to turn while you continue to bleed cash. But Ford is betting that it will survive, without the need for a bankruptcy filing or government aid down the road. If the legendary automaker survives, business school case writers will be scribbling furiously to document the story of Ford's survival of the crash of 2008.