DETROIT -- Ford Motor Co.’s surprise profit in the third quarter “absolutely” would have happened even without the cash-for-clunkers program, CEO Alan Mulally said today.
“It was a good stimulus,” Mulally told Automotive News after Ford announced a $997 million quarterly net profit. “But the real strength of the third quarter is based on the strength of our product line improving.”
CFO Lewis Booth said the federal government’s clunkers rebate program didn’t lead to an increase in Ford’s third-quarter wholesale sales. Instead, Ford ran dealer stocks down.
Most of the production increase to replenish inventory is scheduled for the fourth quarter. Ford plans to build 570,000 vehicles in North America this quarter, up 141,000 compared with a year ago.
The executives wouldn’t say whether Ford expects to post a profit in the fourth quarter, but they do expect a second straight quarter of positive cash flow. After burning through cash for most of the past two years, Ford posted positive automotive operating cash flow of $1.3 billion in the third quarter.
While Ford amended its forecast for 2011 -- saying it now expects to be “solidly profitable,” excluding special items -- company leaders say the market remains too uncertain to predict results for next year.
“The reason that we were cautious on 2010 is that we are assessing, like everybody is, what is the strength of the recovery in the near term,” Mulally said.
Ford is forecasting U.S. vehicle sales, including medium- and heavy-duty trucks, of 10.6 million in 2009 and 14.5 million in 2011. The company is not currently forecasting a number for 2010, having recently backed away from an estimate of 12.5 million.
Mulally said he plans to provide guidance for 2010 in January when year-end 2009 results are announced.
Ford did say U.S. sales may improve in 2010 compared with the recent third-quarter levels. But the industry is facing a “high likelihood” of a sharp decline in European industry sales as scrappage programs expire there. That decline in Europe could more than offset gains in the United States, the company said.