The Ford Motor Company had a good year. Sales were up 11 percent in 2011 and 10 percent in December alone.
But the road ahead is expected to be crowded, with tougher competition from foreign automakers.
In October, Ford announced a new four-year labor contract with the United Automobile Workers union. The company agreed to add 12,000 jobs and invest $6.2 billion in its United States plants.
In December, Ford said that it would resume paying quarterly dividends to its shareholders for the first time since 2006, as it closed out its third consecutive profitable year.
After closing numerous plants and cutting thousands of jobs as part of its restructuring, Ford has focused on strengthening its balance sheet by paying down debt and improving its liquidity.
The Ford Motor Company, founded in 1903 by Henry Ford, is one of the largest auto makers in the world.
During a time of crisis throughout the auto industry in recent years, Ford emerged as the sole American automaker in a position to survive the steepest sales downturn in decades without a government bailout. That helped the company improve its reputation and win new customers.
Ford passed Toyota as the No. 2 seller in the United States in 2010.
Sales by Ford grew 15.2 percent that year, even though it sold Volvo and closed the Mercury brand.
The company increased market share for the second consecutive year - the first time that has happened since 1993 - and the Fusion became the first Ford sedan to sell more than 200,000 units in a year since 2004. With its new Focus compact car arriving in 2011, Ford will continue its shift to more small cars and away from trucks.
The company had outsold G.M. in February 2010, something that had not happened in more than 50 years, aside from several months in 1998 when G.M. workers were on strike.
Ford's current strength stems from what was a literal bet-the-company decision in 2006 to borrow $23.6 billion, putting even the company's fabled blue logo up as collateral. That money helped Ford move more quickly than General Motors or Chrysler to bring out new lines of more fuel-efficient vehicles, and, more crucially, provided a cash cushion when the car market tanked along with the economy in late 2008. Ford also shifted its strategy to focus on its core brands and has sold off luxury brands, including Jaguar and Land Rover to the Tata Group of India for $2.3 billion in 2009. In March 2010, Ford reached an agreement to sell its Volvo subsidiary to a Chinese conglomerate.
In June 2011, Ford's chief executive, Alan R. Mulally, was expected to unveil an aggressive strategy to increase the company's worldwide sales to 8 million vehicles a year from 5.3 million by mid-decade. That would put the Detroit automaker at the top echelon of world production. In 2010, Toyota, the leader, sold about 8.42 million vehicles.
But Ford will be playing catch-up in Asia, where competitors like Toyota, General Motors and Volkswagen have larger shares and better brand recognition.
History: The Good Years as No. 2
For decades, Henry Ford's company was the world's No. 2 automaker, a strong runner-up to General Motors and a pillar of American corporate stability. In early 2009, it emerged as the sole American automaker in a position to survive the steepest sales downturn in decades without a government bailout.
The company had been through rough patches before the current downturn, recovering in the 1950's from the neglect of its founder's later years, and fighting in the 1970s and early '80s to fend off waves of Japanese imports.
The 1990's were, at first glance, a good time for Ford, as its Taurus was the dominant passenger car of the decade's early years and sales of its high-margin sport-utility vehicles, minivans and trucks rose and rose. In 1999, the first year under its new chairman, William Clay Ford Jr., and new chief executive, Jacques A. Nasser, Ford earned a profit of $7.2 billion. That same year, Ford bought Volvo, adding it to a stable of European brands that included Aston Martin and Jaguar. In 2000, it bought Land Rover and formed the Premier Automotive Group, which it hoped could expand its profits and worldwide sales.
The Troubles Begin
That same year Ford was hit by exploding Firestone tires on its Ford Explorer, which had been the most popular sport utility in the country. For more than a year, Ford traded angry accusations with Firestone over who was at fault for the problem. The situation helped oust Mr. Nasser, who had angered Ford employees with aggressive steps he argued were needed to change the company, and it began a downturn from which Ford was slow to recover.
In 2006 Toyota passed Ford in United States sales. Lower sales and declining margins combined with rising spending on health care and retirees drove all American carmakers into a corner, but perhaps Ford most of all. It reported losing a staggering $12.6 billion. At the start of the year, Ford had announced a restructuring plan involving shedding 30,000 hourly jobs and 14,000 salaried workers, about one-third of its labor force.
Later that year, it raised $23.6 billion in loans by putting many of its most cherished North American assets up as collateral, including the Ford logo. Although the economy was healthy then, Alan R. Mulally, its new chief executive, said the money would give Ford "a cushion to protect for a recession or other unexpected event." At the time, the request was considered an act of desperation. But the $23.6 billion turned out to be Ford's salvation. Because of that money, Ford is in far better shape than General Motors and Chrysler. The loans kept it independent and on a course to survive the worst new-vehicle market in nearly 30 years.
In July 2007, Ford announced that it had earned a profit of $750 million in the second quarter, its first quarterly profit in more than two years. Still, Mr. Mulally, who had been brought in from Boeing in late 2006, warned of "substantial losses" looming for the year's second half, and confirmed that the company was negotiating with possible buyers of Jaguar and Land Rover and was considering selling Volvo as well.
The Losses Mount
As a result of the biggest sales slump in decades, Ford lost $14.6 billion in 2008, making it the worst year in its history. It finished 2008 with $24 billion in cash on hand but $25.8 billion in debt and said it did not need federal aid unless the economy worsened significantly.
Ford and leaders of the United Automobile Workers announced an agreement in Feb., 2009 under which the company could substitute its stock for as much as half of its payments into a retiree health care trust. The U.A.W.'s Ford members accepted the agreement, which also required court approval.
In March 2009 Ford announced that its February sales were 48 percent lower than in February 2008. The company also said it would reduce second-quarter production by 38 percent from the same period in 2008.
Revamping Its Balance Sheet
Ford said it hoped to eliminate as much as $10.4 billion in debt by giving cash and stock to debt holders as part of a revamping of its balance sheet. The moves, announced in March, 2009, were similar to what General Motors and Chrysler were required to do under their multibillion-dollar loans from the federal government. As a result, Ford reduced its overall borrowing by 40 percent.
In a reflection of the financial stress on the auto industry, Ford offered its bondholders far less than the debt was originally worth. But under the terms it proposed, holders of its debt would still fare better than they would if they sold their debt for its current market value.
Analysts said that Ford's debt initiatives, and the earlier agreement it secured with the United Automobile Workers union, reinforced its status as the healthiest of Detroit's automakers. Ford said it would put up $2.2 billion in cash, including $1.8 billion from its lending arm, Ford Motor Credit and 500 million shares of stock to persuade bondholders and other creditors to accept its restructuring offer.
Mercury Models Discontinued
Ford announced in June 2010 that it would discontinue selling Mercury models, ending a 71-year-old brand that once stood for innovation and speed but that later became a "me, too" division.
Mercury came to life during the Depression, when Ford was striving to keep pace with General Motors, which had passed Ford to become the country's top-selling automaker. At its cultural height in the 1950s, Mercury became known for innovative cars like the Turnpike Cruiser, whose features included a power rear window, the "seat-o-matic" adjusting seat, and the "Merc-o-matic" automatic transmission.
Mercury sales peaked at 580,000 in 1978, also a year of record hourly employment for the Detroit auto companies. In 2009, Ford sold fewer than 93,000 Mercury models.
Signs of a Rebound
Ford reported a 6.8 percent sales increase in December 2010, reporting its best monthly rate for the year as the domestic auto industry's long, slow comeback gained traction.
The company's encouraging profits are in large part a result of the new products Ford has been bringing to its dealers' showrooms, including the revamped Taurus sedan whose sales in the United States were 96 percent higher than its predecessor in the first quarter.
Analysts say Ford undoubtedly was helped by Toyota's recall of more than nine million vehicles, causing some shoppers to look at brands they might not have bought or even considered otherwise.
Ford has also seen its image improve since General Motors and Chrysler began borrowing billions of dollars from the federal government.
Although the automaker announced in January 2011 that it earned $6.6 billion in 2010, its largest profit in 11 years, Ford's fourth-quarter results fell short of expectations, breaking from a recent trend of positive earnings surprises.
From October through December, the company earned $190 million, or 5 cents a share, after taking a $960 million charge related to a debt-conversion offer. That compared to earnings of $886 million, or 25 cents a share, in the period a year ago. Its fourth-quarter revenue rose $1.6 billion to $32.5 billion.
The performance for the year meant the company's 40,600 hourly workers will receive profit-sharing checks averaging $5,000. The checks, required under Ford's contract with the United Automobile Workers union, will total more than $200 million and are the biggest Ford has handed out since 2001.
The Ford Family
The company's determination to survive is, in part, a reflection of the tenacity of the Ford family, which has rallied behind its appointed leader, William C. Ford Jr. The current generation - with 13 cousins, including Bill Ford - has brought its children into the fold, and the family's quarterly meetings now attract as many as 35 family members.
In all, five family members work in some capacity or serve on the board at Ford. Besides Bill and Edsel Ford, three fifth-generation Fords are on the payroll.
In January 2009, the value of the family's 70.9 million special-voting shares hit a new low, dwindling to about $140 million, from $2.2 billion a decade earlier. But Ford family members said they could not envision any situation that would cause them to sell out.
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