By on July 28, 2015

2015 Ford F-150

Ford announced that it made a $1.9 billion net-adjusted profit in the second quarter of 2015, marking the largest gain for the automaker since 2000, according to Automotive News.

The profit represents a 44-percent gain over last year despite dipping global sales and a stronger U.S. dollar hampering exports. Ford said it was selling cars for more money and offering fewer incentives, despite recent reports of F-150 incentives topping nearly $11,000 in some places.

Ford said revenues in North America surged 10 percent, which helped the company beat Wall Street’s expectations.

The 10-percent gain in revenue in North America is despite Ford’s slower-than-average sales compared to the overall industry average. Automotive News reported that the automaker achieved a 1.7-percent increase in sales for the second quarter compared to the industry average of 3.3 percent.

A slowdown in production of the F-150 is partially to blame for the sales shortfall. Building the redesigned F-150 at both of Ford’s plants has gone slower than normal, the automaker said, and inventory levels should return to normal in September.

The automaker said it increased its global market share one-tenth of a percent to 7.6 percent. Twelve of its 16 planned global launches have happened already this year, and Ford said the rest were on track. The company said it was still on track for an end-of-year, pre-tax profit of between $8.5 billion and $9.5 billion.

Ford posted a net loss in South American, European, Middle Eastern and African markets, but posted a $33 million gain in the Asia Pacific region, a 20-percent improvement over last year.

Ford Credit posed a $506 million pre-tax profit for the second quarter, a 17-percent gain.

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52 Comments on “Ford Posts $1.9B Second Quarter Profit, Largest Since 2000...”


  • avatar
    Pch101

    How is this possible?

    I’ve read in the comments section that Ford is on the verge of failure thanks to the chicken aluminum tax, or something like that. Surely, those who post here can’t be wrong about such things.

    • 0 avatar
      dartman

      One word: Illuminati. Do not question the knowledge of the Grand Order of the Hooplehead – TTAC Chapter

      • 0 avatar
        28-Cars-Later

        Who controls the British crown?
        Who keeps the metric system down?
        We do, we do
        Who keeps Atlantis off the maps?
        Who keeps the Martians under wraps?
        We do, we do…

    • 0 avatar
      DinosaurWine

      Paging Big Al From Oz.

    • 0 avatar
      VCplayer

      Ford crying all the way to the bank.

    • 0 avatar
      Big Al from Oz

      Pch101 and the other Chicken Tax Apoligists/Socialists,
      Yes the chicken tax does play a significant role in the profits Ford has made from the NON ALUMINIUM trucks. Without a chicken tax Ford would of introduced the Ranger and most likely imported. Ford will still make a profit with imported pickups, except the there would be less UAW guys on the floor making pickups.

      Let’s see a breakdown of the monies within Ford’s pickup stable.

      If you read the fine print Ford really stated the “F SERIES”, contrary to the opinion of the new 2015 aluminium F-150.

      The average transaction price for a pickup for Ford is just over $42k, GMC has a higher transaction price at $44k. Chev is a little lower and Ram is just under $40k.

      To me it seems Ford is still in a quandary with it’s new 2015 aluminium F-150.

      If you can comprehend information and have the capacity to interpret data you will see not much profit has come from the new 2015 aluminium F-150.

      Many analyst seem to concur with my view as well.

      Will Ford tell the truth?? No fncking way.

      If Ford mentioned the truth (along with the other pickup manufacturers) you would see a complete breakdown of profits, numbers, etc on each individual pickup segment.

      This ain’t goin’ to happin.

      Ford marketing again. How much profit did they make??? Will the numbers change down the track??

      You guys are quite naïve to believe the Ford line. Do some research, and not from other car and pickup sites.

      I will stand by my assessments of Ford’s position.

      • 0 avatar
        bball40dtw

        Average transaction price for a Ford truck was almost $45K in Q2. As more 2015 F150s were sold, the ATP went up.

        This profit has little to do with the F150 though, as it was in launch mode and incurred higher than normal expenses. It certainly covered it’s costs though.

        • 0 avatar
          Pch101

          Don’t bother, bball. He isn’t going to understand you.

        • 0 avatar
          VolandoBajo

          WTF is this chicken tax prattle?

          And I’m not interested in the usual suspects touting their viewpoints. I am hoping someone with knowledge and facts, such as @bball40dtw, will give me a brief synopsis, or perhaps a link.

          BTW @bballdtw, congratulations on your company’s recent good fortunes. Ford is truly one of the few remaining American manufacturing success stories, and no, I don’t want, need, or care about someone else’s breakdown of how much Ford manufactures in the US vs. elsewhere in the world.

          Ford is still a company HQ’d in the US, with substantial operations here, and its success bodes well for Americans, notwithstanding the fact that some of its manufacturing occurs overseas and at the ends of the NAFTA alliance, instead of in the middle. And I find it hard to believe that they can snow industry stock market analysts very long with smoke and mirrors profit claims. Sway the amount a bit, perhaps, but it seems clear that Ford is doing something right, and a good amount of right at that.

        • 0 avatar
          VolandoBajo

          @bballdtw, congratulations on your company’s recent good fortunes. Ford is truly one of the few remaining American manufacturing success stories, and no, I don’t want, need, or care about someone else’s breakdown of how much Ford manufactures in the US vs. elsewhere in the world.

          But I can see how the chicken tax can help profits, by making larger trucks with larger margins more affordable and desireable than a Ranger, for example, would be, UNLESS the chicken tax was dropped, causing an immediate 20% drop in total cost to the consumer (20 and not 25, because if you impose a 25% tax, that means that the vehicle’s base cost is 80% of the total cost, and the chicken tax is 20% of it.)

          But right now my son wants a Ranger sized pickup for a business he is starting. A full size pickup is overkill.

          So he has to go with either a used truck, or go foreign.

          I can see that such a barrier to entry for smaller trucks helps the sale of big trucks, and their manufacturers, but fail to see how this would help the American truck buying public.

          If it is supposed to help me, please tell me how. It seems like it is nothing but protectionism for the UAW at the expense of free market operation on the truck marketplace.

          If some of you maintain otherwise, please explain. And I don’t need certain idiots name-calling to serve as a response.

          I want a rational explanation. Please.

          It is still a company HQ’d in the US, with substantial operations here, and its success bodes well for Americans, notwithstanding the fact that some of its manufacturing occurs overseas and at the ends of the NAFTA alliance, instead of in the middle.

      • 0 avatar
        DenverMike

        @BAFO – If Ford continues to consolidate all their pickups sales into fullsize only, hey it’s their party. Or their funeral, as you keep hoping. What matter is that big quarterly/yearly figure. But for global imported pickups to impact all the US OEMs, like you ‘think’ they would (without the chicken tax), including OEMs like Toyota, Nissan, Honda, Hyundai, Mazda, VW, Subaru, etc, global pickup sales would have be in the multi millions yearly. The Ranger would sell the most, at most 100,000 a year (mostly to fleet) with the rest going downhill from there. Steeply downhill

      • 0 avatar
        Drzhivago138

        So, we shouldn’t do research from websites dedicated to the very thing we’re researching? Ugh, fine, looks like Zombocom has to be my primary source AGAIN.

  • avatar
    Veee8

    How much longer until Canadian UAW workers accept some profit sharing over wage increases?

    • 0 avatar
      mikey

      The Canadian UAW member , has not existed since 1984 ,when the CAW was created . The CAW folded up shop somewhere around 2013 when it was amalgamated with the paper workers union. , the latest version is called UNIFOR.

      Way back in the 80’s the CAW traded profit sharing, for Cost Of. Living Allowance ( COLA ) COLA was frozen for 5 years for the active employees back in 09. COLA is no longer in the pension . The UAW opted for a form of profit sharing, usually involving a fixed lump sum payment. In the 09. – 10 period the CAW opted for a similar package.

      Just like to make sure everyone has thier facts straight

      • 0 avatar
        Veee8

        CAW/UNIFOR thanks for the correction.

        “In the 09. – 10 period the CAW opted for a similar package”

        I’m reading contradictions to your comment above and can’t find anything more recent.

        Jan 2013 –
        CAW president Ken Lewenza defended Tuesday his union’s long-standing opposition to profit-sharing for his members despite record-setting bonuses of more than US$8,000 that will be awarded to Ford workers in the United States.

        • 0 avatar
          Pch101

          There’s no contradiction. It matches what he said: they have opted for fixed bonus payments instead of variable profit sharing. As it turns out, those fixed payments are much lower during times like these.

  • avatar
    dwford

    Doesn’t excite me, I sold some shares last week. I see Ford’s much higher than the competition labor costs (which are unlikely to be resolved in the next contract), continued F-series switchover issues (the Super Duty’s switch to aluminum next), weakness in the small cars (the recent upgrades to the Fiesta and Focus did nothing for sales), an aging Fusion, a dead Taurus, and the next generation of everything is 2-3 years off. I don’t see how the stock goes up when it has gone down about $3/share at the same time the market reached record highs.

    • 0 avatar
      VolandoBajo

      Ford seems to be engineering a lot of new things for down the line a couple of years. It is not unheard of for the market to anticipate the future as well as reward the present.

      I think that if you read between the lines, you can see that Ford is positioning itself to be able to do a lot of new things beginning in or about the 2018 model year. Meanwhile, it doesn’t have a lot of R&D or tooling costs associated with much of its current lineup.

      Skimming the gravy now, and getting ready to establish a new beachhead.

      Let’s see what happens in three years. But I think being long in Ford is a good move. Go ahead and short it if you want. It will be your funeral, I suspect.

      • 0 avatar
        dwford

        Just took some profits off the table. Ford has been stuck in a $3 trading range for a long time now. Need to find somewhere else for my money to grow faster

  • avatar
    GermanReliabilityMyth

    Don’t worry, the saviors and great equalizers, the NHTSA, are saddled upon their 4 horses and riding to our rescue.

  • avatar
    28-Cars-Later

    So are we to conclude the new F-150 has been wildly profitably for Ford since historically 90% of all profits come from F-series and F-150 is the volume model?

    • 0 avatar
      bball40dtw

      This is more about Ford’s entire US operations being profitable, especially it’s volume vehicles that weren’t brand new. Escape, Fusion, and Explorer are all very profitable in NA.

      The F150 merely paid for it’s start up costs so far this year.

      • 0 avatar
        Pch101

        Well, to a point.

        The R&D would have been expensed during prior periods, so that’s a sunk cost as of now.

        I’m not sure whether tooling is expensed or depreciated. If the latter, then only some of it is showing up as of this quarter.

        • 0 avatar
          bball40dtw

          I’m not sure how it’s broken down now, but Ford’s CFO indicated that the Fseries wasn’t a huge part of the profit because of launch costs and limited supply. He also said that the rest of the year will go from “really good to great”.

        • 0 avatar
          Lou_BC

          R&D is an ongoing expense that is amortized over time. Many seem to thing that it kills a product’s profits until it recuperated. Vehicles are routinely replaced so R&D isn’t episodic.
          Retooling is an added expense but the reality is that tooling does wear out and needs to be replaced whether or not it is stamping aluminum or steel.

          • 0 avatar
            Pch101

            Incorrect. Under US GAAP, R&D is expensed as it is spent. All of the money invested in engineering, design, etc. to get this truck to the point that it is is already done and over with.

            Internally, the amounts will be used whether the project was profitable. But that won’t be in the public accounting.

          • 0 avatar
            Lou_BC

            Pch101 – interesting and thanks.

            Internally though, R&D is an ongoing expense that must have it’s own budget allocation. I’m assuming that with a big change like the aluminum F150 they would allocate more money and resources to the change over.

            If I read you correctly then part of the sales of the last F150 paid for the R&D for the current one.

          • 0 avatar
            DenverMike

            It doesn’t matter how you ‘slice’ it, pay it back or pay it forward, every vehicle has to show a profit when the dust settles. Unless it’s a loss leader, but that’s a different story.

          • 0 avatar
            VolandoBajo

            @Lou_BC But you have to keep in mind that it is a lot cheaper to build replacement tool and die equipment to the same spec, than it is to develop new tool and die equipment for a different process.

          • 0 avatar
            Lou_BC

            VolandoBajo – true

  • avatar
    stuki

    Ford currently has 1000s on the hood of some new f150 models. Not so sure about their “low inventory” explanation for sales shortfalls. More likely a conservative target market adopting a wait and see attitude to all the new, for pickups, tech.

    And, since every single discussion anywhere about pickups turned into brand warfare, were I to buy a halfton right now, I’d get an F150. If for no other reason, then because Ford remain the only make who retains the traditional extended cab. So I’m definitely not “anti Ford.” Just pro smell testing press releases.

    • 0 avatar
      bball40dtw

      The low inventory is real. Ford basically lost a model year of fleet sales. It is tough to find a regular cab truck right now. The biggest discounts are on specific trims (F150 SuperCrew XLT 2.7TT with luxury and sport pacakges). Good luck finding that truck. That being said, Ford does have some cash on the hood of the new F150 because of the deals at GM and RAM. On most F150s right now, it’s up to $3250 in incentives.

      • 0 avatar
        Drzhivago138

        I have yet to see a RCLB fleet ’15 (or any regular cab, for that matter), and the model year is almost over. I did see a SuperCab/8′ bed, and that made up for it because it’s my dream truck config.

        • 0 avatar
          bball40dtw

          SuperCab + 8′ bed is some goodness on the new truck. Much goodness.

          I wonder if the long bed shortage has something to do with Ford being short on rivets. They can barely make enough to keep the line going.

      • 0 avatar
        Pch101

        It would seem that some members of the TTAC audience are unfamiliar with the concept of loss leaders, nor are they aware of the differences between the extreme end of the bell curve and the mean.

    • 0 avatar
      Scoutdude

      Ford does not have 1000s on the hood of any F150. If you actually read that click bait article you’d find that a large portion of that slightly more than $10K “discount” was average dealer discount, IE not Ford money. Another huge chunk of that was “package discount” which is just marketing BS. You have to buy the options as a package and the stick seriously inflated prices on the costs of the items that make up that package that you can’t buy separately if you wanted so that the package looks like a deal to those that don’t have a clue. Then a bunch of the rest of those discounts are the college grad/police/military/owner loyalty/lease/finance discounts that they offer on every vehicle and that most people do not qualify for. Further reading of the fine print reveals that it is only on XLT trim because Ford underestimated just how many people would buy the higher priced versions so they have more of the low end trucks that people aren’t buying. Meanwhile people are paying full sticker less the few that qualify for those 1 out of 100 discounts. By the way the sticker price on those top trims went up significantly on the 2015 F150, more than the cost of production increased from going to aluminum. So yes they may be selling fewer trucks but the increase in profit margin means they are making more money overall at the end of the day.

      So yeah there are big shortages of the top trim models because that is what people are buying.

      • 0 avatar
        bball40dtw

        There is $1750 in incentives and $1500 in bonus cash on many models. However, that isn’t exactly a bunch of cash in the full size truck game.

      • 0 avatar
        stuki

        OK, if you guys say so….

        So what I’m getting, is that Ford essentially focused on producing midrange trucks, to the detriment of low end fleet trucks and high end lux trucks, and carried that bet a bit too far? I know of two F150s sold last month, both XLTs and both at almost 20% off sticker. One was a reg cab 8ft with hd payload, which was basically unobtanium, even at full sticker, some months ago, and the other an extended cab medium bed. Both 4x4s. So, whether the discounts are coming from Ford or the dealer network, you’d think whomever were giving it, didn’t believe they could do better with their scarce good…..

        It is interesting that the guy who bought the reg cab, told me he would have saved literally nothing, if he had bought an XL instead, which was what he originally planned on. And also, that neither buyer were dead set on one exact color and option mix, and were, within reason, willing to take what the dealer would give them the best price on.

        I also find it a bit dissonant that it seems like Ram’s, and GM’s in particular, sales seem to have suffered more during the runup to the launch of the new, “revolutionary” F150, than they do now that it’s finally launched. Now GM is killing it with their previously derided as old, boring trucks. I can’t imagine it’s all on account of people who really wanted an F150, but couldn’t find one in stock, hence settled for 2nd…..

  • avatar
    Dr. Claw

    Hope this means more OneFord.

    • 0 avatar
      VolandoBajo

      I think it is safe to say that Ford will not be joining GM, Chrysler/FCA, Mitsubishi and other manufacturers on the Death Watch list, to say the least.

      You can quibble over how the profitability is figured, how outlays are treated from an accounting point of view, discounts vs. volume available, and all that other stuff all you want, but at the end of the day, Ford is making money, and a good bit of it, even with stiff price-cutting competition, especially in trucks, from the other Big Two.

      FCA is an old maid without much dowry, desperately in search of a new, wealthy husband. And GM is desperately hoping, like a kid caught with his hand in a cookie jar, that its sibling’s recent NHTSA-noted misbehaviors, will take a bit of the spotlight off of it for a while. Though they are not likely to get that lucky for that long.

      Meanwhile, old man Ford, like old man river, just keeps on rolling. It keeps on rolling along.

      A Ford vs. Chevy true story for the B&B. Years ago, a local radio station was doing a live broadcast from a multibrand auto tent sale one weekend. Lots of callins, lots of small giveaways to keep people involved, etc.

      One listener calls in right after the DJ announces that they have lots of hot dogs and cheeseburgers on the grill, and lots of cold sodas in their coolers, all free. “Come on down!”.

      The listener says “What could be more American than eating a cheeseburger from an outdoor grill, while drinking a Coke, and working under the hood of your Chevy on a Saturday morning?”

      And the next caller gets on the air right behind him, and says “Tell the last caller that if he had bought a Ford, he wouldn’t have to spend Saturday mornings under the hood of his car.”

      True story…as I recall, the DJ quickly cut to a pre-recorded commercial break in order to gain some time to regroup. There was a fair amount of cheering in the background when the last caller’s call went out over the loudspeaker at the tent sale.

      Chevy motors were popular in hotrods fifty years ago. That helped them gain a following. But that was then, and this is now…

      Ford rules.

      I have my Nomex on, I DON’T CARE.

      Ford still rules, and probably will for decades.

  • avatar
    Jeff S

    @VolandoBajo–GM is far from dead and the odds of Fiat-Chrysler dying are remote at best. GM and Fiat-Chrysler are much more likely to merge with another manufacturer but neither will die. Ford itself has come very close to dying several times in the past but they managed to come back. Now as for any American based auto manufacturer being Number 1 or 2 in the Global market that may never happen again. It appears VW has that title with Toyota not far behind and Toyota was Number 1 not too long ago and GM was Number 1 as well. US market does not make a global market, if it did VW would not be Number 1 since VW doesn’t do that well in the US market. Much easier to judge things from a local perspective than from a global one. There is a whole other World once you leave the comforts of the US.

    Mitsubishi Motors is just a part of Mitsubishi Corp which owns financial institutions, makes electronics, makes aircraft, makes industrial equipment, and many other things. Whether Mitsubishi Motors stays in the US market no one knows for sure, but Mitsubishi has the resources to stay the course in the US vehicle market. Mitsubishi Motors does reasonably well in the global market. I think you are infused with too much Ford fanboy ism and cannot see the bigger picture.

    • 0 avatar
      VolandoBajo

      Your point about global vs. domestic is correct. And though I did not make it explicit, I was really trying to indicate that those other manufacturers were on the rope, and not necessarily headed for bankruptcy courts.

      It was late, I was careless in mixing my metaphors (what is a meta for, anyway?) — and Ford has had its problems in the past. But at the present, those other manufacturers, including globally especially VW and Toyota, still have “legs”, it is just that those legs have grown rather shaky, especially when viewed from a US perspective.

      As an observation of the scope of the B&B, I realize that there are some of our brethren ( and cistern? Sorry.) from the North, the Great White North, but have not noticed much of a global representation here on TTAC.

      Truly, as you point out, none of these others are literally headed for the corporate mortuary, but I was continuing a meme made popular here in the past…the corporate Death Watch. But in this case, it is more like a distant early warning watch for a number of manufacturers who no longer are in a position to lead, though they still are forces to be somewhat reckoned with.

      So I do not disagree in principle with any of your points, but instead offer up a mea culpa that, in the after midnight hours, my choice of terminology and metaphors was a bit loosely chosen.

      Thanks for your clarification, which I agree better portrays what I believe is Ford as a strong big brother, and the remainder as a bunch that collectively make up the rest of the field.

      You and/or others may feel that that is still characterizing Ford as being in a more dominant position than is reality, but if will excuse another metaphor, of the pack, I really believe that it is Ford, for more than any of the others, that is in the driver’s seat with respect to todays and domestic market, and even though they are not the largest or most diverse globally, even there they are strong enough to be able to both make leadership moves in the market, and respond quickly to any new development that might pose a threat to their market share.

      I will once again point to Damon Runyon’s maxim “the race is not always to the swift, and the battle is not always to the strong, but you will quickly go broke if you consistently bet any other way.” And I believe that the evidence is fairly strong that Ford is, among all of them, one of the swiftest and one of the strongest, if not THE swiftest and strongest.

      I freely admit my strong preference for Ford products, but I believe that those are correct statements independently of my personal preferences.

  • avatar
    Jeff S

    @VolandoBajo–I do think that GM and Fiat-Chrysler as we know them now will either merge or be acquired by another manufacturer. As has been covered on this site that there will be more consolidation in the auto manufacturing industry. It could be that in the near future there will be only one domestic based manufacture that is left. Fiat-Chrysler has been looking for a merger partner and it would not surprise me if they eventually find one. GM with a heavy presence in Asia especially China could be acquired by a Chinese manufacturer or become a Chinese corporation. After reading about mergers in the appliance industry and the lawn equipment industry there are a few large players that control the lion’s share of the market.

    General Electric just sold their appliance division to Electrolux a large Swedish corporation that makes appliances both large and small. Before the merger GE, Whirlpool, and Electrolux had about 85% of the US market with Samsung and LG hardly even registering. Electrolux owns Frigidare which was owned by White Westinghouse which bought Fridgdare from GM (White-Westinghouse was bought by Electrolux). In the lawn equipment industry MTD, Husquvarna, Toro-Lawnboy, and John Deere have most of the market. Husquvarna another Swedish based corporation owns Roper, Weedeater, and a few others and MTD owns Cub Cadet, Yardman, and a few others. John Deere at one time owned Green Machine, Jacobsen, and Homelite.

    VolandoBajo, I am not saying that this merger trend is great, it is what it is. As corporations become more global they become less distinctive. More products are designed for global consumption and manufacturers are under more pressure to contain and share costs. One of the only vehicles that is unique to the US markets is the full size pickups and some of the 2 door pony/muscle cars and even the new Mustang was designed for a global market. We are living in an ever changing World which has become more connected and more global in nature.

    As for the dependability of a certain brand I have had many Fords, GMs, Chryslers, Hondas, and a Mitsubishi and only a handful have been problematic. I presently have a 99 S-10 that I have had for almost 17 years that has been extremely reliable and my wife had a 2000 Taurus for 13 years that was very reliable. I am very particular about maintaining my vehicles and I believe that most of today’s vehicles if properly maintained will provide many years of reliable service. My wife had a 77 Honda Accord for 17 years and I had a 77 Monte Carlo for 18 years both bought new and both well maintained.

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