May 6, 2011
Ford announce record profits 0
In times of such deep recession with many watching what they spend their money on, it may have come as a big surprise at first to many that Ford’s announced huge profits of a reported £2.6 billion in the first quarter of 2011, their biggest margin since 1998. However demands for greener cars have been significantly increased recently. Petrol prices are continually on the rise frustrating many motorists. In order to save money on running costs many decided to go for the greener option, with Ford taking full advantage of this.
Ford outlined that the success was mainly in North America but stated that European business has shown great signs of improvement. Whilst the Japanese earthquake had a severely bad effect on business for Japanese other car manufactures, Ford claimed there was minimal damage caused to their business operations. In fact it has been claimed by some experts that Ford could indeed gain more business at the Japanese’s manufactures expense.
Alan Mulally the Ford president praised Ford’s achievements saying “Our team delivered a great quarter, with solid growth and improvements in all regions. We continue to accelerate our One Ford plan around the world, delivering on our commitments to serve our global customers with a full family of best-in-class vehicles and deliver profitable growth for all, despite uncertain economic conditions.”
The news may appear positive to many, but experts claim Ford’s reported debts somewhat overshadow its recent achievements. Ford appear to be in serious debt according to various sources and there were talks of a government bailout recently. The company’s debts have been eased by the profits but many are still concerned by the huge volume of it. Ford steered clear of going down the bankruptcy route but now have more debt compared to their rival companies. Chrysler and General Motors went into bankruptcy which didn’t make them liable for tens of billions dollars worth of debt.
With many factors to consider it could be difficult to anticipate whether Ford can sustain this record breaking success for the rest of the year and beyond. Research and development, which is a fundamental sector of any car company, would certainly have its maximum capabilities restricted with debts holding back the potential funds that could be poured into that department. Japanese car manufactures may soon also show signs of recovery which could in turn slow down business for Ford.
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