Ford Reports Profit of $2.7 Billion

If there was ever a sign of hope for the U.S. auto industry, Ford Motor Company delivered a big one. They're making money.

Once-beleaguered Ford posted a $2.7 billion in profit for 2009. Not bad when you consider that most look back on 2009 as another pitiful year for the auto industry. The fact that Ford was able to downsize and make a profit during one of the most troubling times in the industry bodes well for the future, analysts say.

In a conference call, Ford executives say they also expect to post a profit for 2010, bringing optimism to the table for the first time in years. In the United States alone, sales of Ford vehicles rose some 13 percent when compared to the same period from a year prior. And Ford accounted for 15.3 percent of the total U.S. auto market, which also was a marked improvement.

Holders of Ford stock earned 86 cents a share, a marked improvement of the 2008 figures: losses of $6.50 a share (or $14.8 billion). The automaker closed 2009 with its first profit since 2005.

Analysts of the auto industry look at Ford's fiscal health as a sign of optimism for the U.S. auto industry. Of course, it isn't hurting that some of Ford's biggest competition is hurting, notably Toyota. Faulty gas pedals in Toyotas have been blamed for several deaths, and the Japanese automaker had to announce a massive recall and went as far as halting sales on eight of its most popular models until it can fix the problem. Contrast that with Ford, which is openly boasting about hiring new workers (an estimated 2,200 by 2012).

Shareholders aren't the only folks who are happy about Ford's good news. Employees are reaping rewards as well. Ford has a profit-sharing program, one that wasn't getting much use in recent years. But thanks to the current collective bargaining agreement with members of the United Auto Workers Union, hourly employees are expected to get approximately $450.

If there was any bad news in Ford's annual report, it was that revenue did fall in 2009. Ford cut costs everywhere, from shuttering plants to laying off employees and cutting expenses wherever possible. But the cuts worked, as Ford managed to turn its lean auto-building machine into a profitable one. Ford still has a very high amount of debt, estimated at some $34.3 billion. But Ford also reports it has $25.5 billion in cash on hand. So it appears the restructuring of the company is paying off.