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Ford posts $1 billion profit

Photo by Charlie Riedel

Photo by Charlie Riedel

DEARBORN, Mich. -- One of the troubled Detroit Three automakers, Ford, is making money again and looking for better times in no more than two years.

Emerging from a three-year makeover with popular cars and trucks, Ford said Monday it earned nearly $1 billion in the third quarter and will be solidly profitable by 2011, a more optimistic forecast than earlier.

While heavy debt and lean times for American car shoppers threaten the comeback, the report puts Ford in a far better position than General Motors or Chrysler, which are still finding their bearings after emerging from bankruptcy.

Ford's cars are winning popular and critical acclaim, like the Fusion midsize sedan and more gas-efficient Focus compact. And years of painful cost-cutting, which have halved its work force, have looked prophetic since the recession struck, hurting demand.

Even in North America, the company's biggest market, Ford turned a profit after losing money there for four years.

GM and Chrysler, meanwhile, are still trying to cut jobs and win back customers, many of whom are steering toward their healthier rival.

Three years ago, Ford was considered in the worst shape of the Detroit Three after posting what was at the time the worst annual loss in its history. The big quarterly profit is the fruit of changes Ford has been making for several years.

At the end of 2005, then-CEO Bill Ford Jr. and two other Ford executives developed a plan to shut down factories, slash the work force and speed the development of cars and trucks.

A year later, Bill Ford left the CEO job and installed Alan Mulally, a former Boeing executive, who further honed the plan and made a key decision -- mortgaging assets like its blue oval logo to raise $23.4 billion.

When the economy faltered last year and took auto sales down with it, Ford had the cash to weather the storm.

''GM and Chrysler still have quite a bit of restructuring to do and simply don't have the product competitiveness across their lineup that Ford does,'' said Mark Oline, auto industry analyst for Fitch Ratings.

Ford has gained a full percentage point of U.S. market share so far this year, the equivalent of selling about 100,000 cars and trucks. GM and Chrysler combined have lost 4.5 percentage points, mostly to foreign competitors like South Korea's Hyundai.

Ford didn't have one vehicle that was a silver bullet, like the Ford Taurus was in the early 1990s, said Erich Merkle, president of the industry consulting firm autoconomy.com in Grand Rapids, Mich.

Instead, it relied on several strong vehicles spread across its lineup, including the Fusion, a restyled Focus and the Escape, a small SUV.

''In today's market, you can't tie success to one or two vehicles, given the fragmentation of the marketplace,'' he said. ''You need to have a multi-hit strategy.''