For Ford, a billion-dollar battle is won, not the war

It’s a happy day – singular – in Dearborn today and justifiably so as Ford Motor Co. basks in its report of a boffo $1-billion third-quarter profit.

It is not yet time, however, for a boisterous “happy days (plural) are here again” celebration, as if the dark storm is over and everything is clear sailing ahead. Because it’s not.

First, to accentuate the positive:

• A $1-billion quarterly profit in a still-very-weak global automotive market is a stunning achievement for any auto company. It’s a testament to Ford’s improved product quality and reputation, along with a resolve to keep costs competitive.

• Particularly remarkable was Ford’s ability to boost its share of U.S. car and truck sales to 14.6%, a gain of 2.2 percentage points, at a time when it also was also raising its average transaction price by about $2,700 per vehicle, according to Deutsche Bank analyst Rod Lache.

Historically, Ford and other Detroit automakers often tried to buy market share by slapping huge rebates and other incentives on the vehicles, cutting into profits and tarnishing their brands.

To boost market share while cutting incentives and raising transaction prices is something no Detroit automaker has achieved in many moons. And it explains how Ford achieved an incredible $3-billion turnaround in North American operating profit, from a loss of $2.6 billion in the third quarter of 2008 to a profit of $357 million this year.

OK, enough gushing about Ford’s third-quarter profit.

Here’s one simple reason to temper the celebration: Ford just reported its first quarterly operating profit in North America since early 2005.

Add ‘em up, using all of your fingers and most of your toes. The sobering tally is that Ford lost money selling cars and trucks in its home market for 17 consecutive quarters.

That’s 51 months, or more than 1,530 days of unrelenting red ink here at home.

Remember, businesses in these capitalist United States are supposed to make profits. Profits should be the norm, not an occasion for great surprise and undue exuberance.

So, today is a day to be happy in Dearborn, to celebrate a good quarter and positive momentum. Then it’s time to get back to work. – Freep