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Ford posts decade-best $2.1B profit in Q1 2013

As predicted, Ford has reported that its first quarter of 2013 was a resounding success overall, with a pretax profit of $2.1 billion ($0.41 per share), and a net income of $1.6 billion ($0.40 per share). In fact, Ford made a pretax profit of some $2.4 billion in its home North American market, with that total number being pulled down by losses in South America and Europe. That gaudy North American profit is the strongest result by the automaker since 2000.
Ford's companywide profit for Q1 was down $147 million from one year ago, while the net income number marked an increase of $215 million year over year. Overall, this is Ford's 15th-consecutive profitable quarter.
The bad news from the European market was even worst in Q1 2013 than it was last year. Pretax losses of $462 million - on revenue of $6.7 billion - represented a year-over-year change of -$313 million. In South American, the company reported a loss of $218 million, down from a slim profit of $54 million in Q1 2012. The news was better for Ford Asia Pacific Africa, where a $6 million pretax profit in 2013 showed a year-over-year gain of some $101 million when compared to losses in 2012. Scroll down to read Ford's full press release.

Ford recalls more than 550,000 trucks and SUVs for various safety issues

Ford announced safety recalls for its current F-150 pickup along with several Ford and Lincoln crossovers early Wednesday. The recalls cover more than 550,000 vehicles and address various safety defects, ranging from a fire hazard to potential loss of braking power.  The most far-reaching of the recalls covers approximately 550,000 examples of the 2015-2018 Ford Edge and 2016-2018 Lincoln MKX, which may have been assembled with defective front brake jounce hoses (also commonly referred to as "flex lines"). These hoses run from fixed points on the chassis to the individual front brake calipers. Defective hoses could potentially rupture, allowing brake fluid to leak and resulting in a loss of braking function. Ford will replace the components in question with revised parts.  The next-largest recall is for roughly 3,000 2020 Lincoln Corsair crossovers. The affected models may have been assembled without proper clearance between their rear suspension springs and toe link brackets. The components could potentially make contact, wearing down the protective coating on the rear coil springs, allowing corrosion to occur over time. This corrosion could eventually lead to a failure of the spring. If this happens while the vehicle is being driven, it could result in a sudden change to the vehicle's handling characteristics, and the spring fragments could potentially cause further damage to the car or surrounding traffic.  Ford says owners will be notified that their Corsairs need to be inspected; if there is not adequate clearance between the rear suspension components, Ford's service technicians will remove material from the toe link bracket to allow for operation without contact.  The final (and by far the smallest) recall is for the 2020 F-150. Some units may have left the factory with the incorrect retention nut on the hot lead to the starter motor. Ford says it can cause increased heat generation or electrical arcing, which could potentially result in a fire. Ford says this issue is limited to just a few hundred examples sold in the United States. Dealers will inspect the vehicles and replace the nut if necessary.       

Ford profits soar as problems mount

Ford is doing well. It can't make enough examples of its new Fusion, it can barely make enough of the aging F-150, it's getting good brand rankings, people like its turnaround story, it's selling oodles of product and its quarterly profit numbers end in the word "billion." As other high-flying examples have demonstrated over the past few years, though, big numbers can come with problems that aren't exactly small.
Automotive News has published a good "nutshell" report of Ford's progress and problems. The Dearborn automaker's optimistic "general label rule" determination of gas mileage for the C-Max Hybrid has led to lawsuits, hybrid software updates, a downward revision of C-Max fuel economy and millions in rebates. AN notes the C-Max was the "worst-scoring model in this year's J.D. Power Initial Quality Study," but Ford will probably be happy that it managed not to be mentioned further in the study's results after last year's mediocre showing. Its MyTouch and SYNC systems, the bugbears sabotaging Ford's J.D. Power results, have also led to lawsuits, software updates, more software updates and a center console rethink. On top of that, the 1.6-liter EcoBoost in the 2013 Ford Escape that Ford called a "hero" was soon catching fire for three different reasons. And let's not even get into the troubled launch of the Lincoln MKZ.
The Automotive News piece notes that industry observers have been surprised at Ford's stumbles because everything has been looking so good. Nevertheless, there is still the issue of those billions in profits - the company is doing plenty of things, plural, right. Ford says it is tackling its problems, hiring engineers and instituting new quality control processes as part of its effort to find solutions. The test will be to see if in a year from now we begin the discussion of these issues with "Remember when Ford...", or "Problems continue at The Blue Oval."