The Ford Motor Co. nailed a quarterly profit for the first time in two years, it was announced today. (Ford purists will be happy to know that in spite of gains, the automaker continued its red-hot losing streak in its core market of North American SUV/oil enthusiast). Ford, in the throes of a restructuring program that will close 16 plans and slash up to 45,000 jobs, made a net profit of $750 million (31 cents/share), versus last year’s $317 million (17 cents/share) loss. Profits from continuing operations handily beat the Street’s expectations of a loss of 37 cents/share with a 13 cents/share gain.

Profits were posted in all regions excluding North America, which lost $279 million, marking an improvement from last year’s $789 million loss. Ford said that profitability is not in the cards for North America until 2009, if ever.

Lest we take this as some sort of sign that the tide is turning for Ford’s Fjords, cynics should be pleased to note that the swing to profit may throw a wrench in F’s plans to F its workers during negotiations with the United Automobile Workers union this summer. That the automaker is not hurting for cash did not escape union prez Ron Gettelfinger, who the Times reports declined to comment on how Ford’s $12.6 billion 2006 loss would affect dialogue but noted, “They have a lot of cash, by the way.”

Ford swings to surprising 2nd-quarter profit [Reuters]

Reuters reports that Ford has hired Goldman Sachs, HSBC and Morgan Stanley to sell-off its British luxury brands, Jaguar and Land Rover. A Citigroup analyst said the sale could raise $8 billion for the cash-strapped firm that lost $12.6 billion last year and $282 million in the first quarter of ‘07. The analyst comments, “Given recent auto buyout activity, Ford would have reason to explore and could realize premium valuations.”

In March, Ford started dumping its European brands by selling Aston Martin for $925 million. The current round of sell-offs come as Toyota moves to overtake Ford as the second largest manufacturer in the US market. As Jaguar CEO Geoffrey Robinson said, “Ford has got some huge problems on its own, really huge.”

[This post was written by Grand Master Automotive Autoeroticist Peter Ribic]

Jaguar sale could secure Ford’s future [BBC]

Ford revealed today in its annual proxy that Chief Exec Alan Mulally was awarded a $7.5 million hiring bonus and $11 million to “offset” the compensation he lost for leaving Boeing last year. This is an interesting bit of news, considering that the automaker hemorrhaged $12.7 billion last year. The previous CEO, Bill Ford, did not receive a cash salary, bonus, or stock awards, since he had decided in 2005 to make himself a martyr “a commitment…to forgo any new remuneration until the company’s auto unit made sustained profits,” which might’ve seemed like more of a HUGE sacrifice if his family didn’t…own the company (or a sizeable amount of it).

Another way to look at this is that when you’re basically just putting money in paper bags and lighting it on fire, $28 million is just a drop in the bucket.

We’re also pretty sure Alan’s one of those guys with an “Act As If” attitude, since a friend of a friend of a friend told us recently that AM preemptively sent a note to the board of directors expounding on this philosophy. He allegedly went off on a tangent for some time about how “if you want to save this company, I’m going to need some serious clams. I’m talking dollars. Big money, hoooo! You think if I show up in public dressed like a hobo, it’ll convince people that they want to drive a Ford? No, if anything, it’ll bolster their decision to buy one of those, what’s the word, what’s the word, what’s the word—Monopoly cars—a KIA or something. Personally, I drive a Beemer; don’t take that the wrong way, no offense to the brand, but, like I said, I’ve got to act like we’re just rolling in the money, and if we’re getting naked and rolling around on piles of $1,000 bills, that’s got to mean something. Don’t take that the wrong way—that wasn’t an invitation from me asking you guys to get naked and roll around on piles of money with me, or a come on by any means, just an illustration. Anyway, the money—I’m going to need a lot of it. I’m also going to need you to send a few extra-plush robes over to my office for the price of—on the house. ASAP. We’re going to save this company, together. –A.”

Mulally gets $28 mln amid $12 bln Ford loss [Reuters]

The private equity takeover of the auto-industry continues. And this time they’ve got James Bond’s favorite ride. Jalopnik reports straight from the Ford of Europe conference call on which it the deal to sell Aston Martin was just announced.

We’re on the conference call right now where we’re being told FoMoCo will be selling Aston Martin for just over $925 million to a consortium composed of ProDrive’s David Richards, John Sinders, Investment Dar and Kuwaiti investment entity Adeem Investment Co. But even after the sale, which is expected to close in the second quarter, Lewis Booth, the President of Ford Europe and PAG claims there will be “a continued relationship between Ford and Aston Martin.”

This follows the rule that our private equity friend explained to us over too many drinks last week—that most of the interest in buying in auto companies will hit on smaller companies or divisions with “brand names” that can be turned around quickly.

We seem to recall that Ford paid something like $100 million to have its products placed throughout the latest James Bond movie, which is apparently about 10% of the total value of the entire Aston Martin company. Anyone want to bet that the new owners might not be so generous? So what do you think 007 will be driving in the next film?

Aston Martin Sold To Kuwaiti Investment Company For $925 Million [Jalopnik]

The Los Angeles Times this morning reports that Ford has developed a fuel cell car that can travel 350 miles between hydrogen fill-ups. Which is probably almost far enough to actually find a hydrogen filling station.

Ford’s experimental hydrogen vehicle, scheduled to be shown for the first time at a media preview Wednesday of the upcoming Los Angeles Auto Show, is a modified version of the Explorer sport utility vehicle.

It packs its hydrogen gas fuel in a large storage tank at a pressure of 10,000 pounds per square inch, twice that of most other fuel cell vehicles.

A fuel cell produces power by converting hydrogen and oxygen to electricity. A Ford spokesman said the fuel cell Explorer was not a production-ready model.

And, oh yeah, Ford is putting up all it’s assets as collateral to borrow $18 billion and avoid bankruptcy. Sort term outlook: new CEO Alan Mulally avoids bankruptcy! Long term outlook: government bailout!

Ford to unveil version of fuel cell Explorer SUV [LA Times]

Inside Ford’s $18-billion gamble [Detroit Free Press]

Tim Carney latest column in the Washington Examiner points out that one of Alan Mulally’s greatest accomplishments at Boeing seems to have been squeezing a great deal of money from the marble pillars of our nation’s capital. Is this how Mulally will solve Ford’s troubles—through political entrepreneurship rather than effective business strategies?

Alan Mulally comes to Ford from Boeing, where he was CEO of the commercial aircraft division. The 61-year-old executive enters an ailing company that drastically needs a turnaround. The choice seems a bit odd on some scores. Mulally made and sold aircraft in an industry with exactly two participants — Boeing and Airbus — and in which he was selling to airlines, not consumers. A different skill set would seem to be in order for running a carmaker.

In his favor, Mulally presided over two key turnarounds at Boeing. A closer look at those turnarounds — and at Boeing’s modus operandi — raises suspicions that Ford might soon become another beggar at the federal trough of handouts.

[Note: Tim Carney, author of The Big Ripoff: How Big Business and Big Government Steal Your Money, is the brother of DealBreaker’s John Carney.]

One of the great problems with Ford is that its work force is demoralized. It’s been hemorrhaging executives, and its middle management largely consists of folks waiting for their pensions to kick in. Try finding a kid at business school who think Ford would be a pretty cool place to land a job.

It’s a good thing that Ford has a plan to inspire confidence in its workforce.

Ford Motor Co. will aim to cut white-collar staffing, benefits and other costs by 30% as part of a broader restructuring plan the company’s board of directors is expected to begin reviewing today, according to people familiar with the matter…

The 30% cut to salaried costs is on the high end of a 10% to 30% cut that had been studied by Ford, which has come under criticism that its first restructuring plan didn’t go far enough. The auto maker will aim to cut back mostly on the number of managers and supervisors, with fewer cuts to lower-level, less-expensive salaried workers, said these people. The white-collar cuts will take place through the rest of this year and into 2007, said one Ford supervisor.

Under the plan, Ford managers will be told to look at their operating budgets and figure out how they can reach the 30% target. “It will be very difficult. A lot of people will lose their jobs and the people that stay will be asked to do a lot,” said another person who had been briefed on Ford’s plans.

Good luck with that thing Mulally!

Ford May Cut Salaried Costs 30% As Restructuring Push Accelerates [Wall Street Journal]

The record on family run public companies is a bit mixed. On the one hand, a scion CEO from a family with a large stake in a company should have a longer time horizon than an unrelated CEO who knows he could be out the door at any moment. So there should be less short term gain asset exploitation and more investment. On the other hand, a single family is a rather small pond in which to fish for executives and the regression toward the mean tendency of genes implies that the second generation might not share the brilliance of a company’s founders. Recent studies show the record on scion CEOs isn’t great.

Daniel Gross takes a stab at what went wrong with Bill Ford, Jr’s tenure at the helm of Ford. Unfortunately, what Gross thinks went wrong with Ford is that Ford wasn’t enthusiastic about thinks Gross is enthusiastic about—environmentalism and hybrid cars—and spent to much time making money with things that Gross doesn’t like—SUVs.

Yes, the company under Bill Ford continually rolled out new models, drew up new concept cars, and introduced hybrids. But its basic business model—riding the high-margin big trucks and SUVs for all they were worth—never changed. Bill Ford continually promised long-term, game-changing business initiatives—the type you would expect from a bold, secure, forward-looking family CEO—but, like hired-gun executives, he was quick to scale back ambitions when short-term results didn’t go his way. If Ford had put resources, reputation, and effort into fuel-efficiency and hybrid production, it’s likely the company’s results would have been even worse during the past few years. But Ford would surely be better positioned for today’s environment—and for tomorrow.

This strikes us as a bit of magical thinking. If only the world conspired to make all the things we liked profitable and the things we despise money losers. Unfortunately, this isn’t the Big Rock Candy Mountain. As one of our mentors used to say, just because you like drinking whiskey doesn’t mean you should try to make your horse drink it too.

Have You Driven Out a Ford, Lately? [Slate]

To be honest, we hadn’t even got around to reading Newsweek’s interview with Ford Motor Company CEO Bill Ford. We figured it was the usual pabulum chief executives serve up. Even the much heralded news that he would step down as CEO if someone better came along struck as fiduciary duty happy talk—he’s also on the board of directors so he arguably has an obligation to step down if it’s in the interest of shareholders. Saying it just confirms that he’s not telling people he’s a crook. Doesn’t mean a thing, we thought.

But it looks like he really did mean it. Bloomberg is reporting that Ford has resigned as CEO. He’s holding on to his position as executive chairman of the board of directors. We didn’t think anything would top the Freston ouster as blockbuster business story of the day but this sure does (and we bet Newsweek is totally pissed that their big interview just got superseded by the resignation).

Ford Chief Bill Ford Jr. Steps Downs as Chief Executive [Bloomberg]

If you were an up-and-coming corporate manager, how much longer would you keep working for an American car maker? What if they had pretty much stopped paying bonuses due to low profitability? Increasingly, according to a report in the Wall Street Journal, executives at Ford seem to be answering: not very long.

Ford didn’t paid out year-end bonuses for last year, and doesn’t expect bonuses this year. In fact, its executives have received bonuses in only two of the last five years. Meanwhile, they get to read about their friends from business school cashing in huge tech options packages and raking in impressive bonuses.

But the problems go beyond just short-term economics. After too many years in the auto industry an executive may be tainted, seen as an old dog unable to learn the tricks of the new economy. So the incentive is to get out earlier and start racking up experience in a broader range of industries.

High executive pay packages and bonuses get a lot of attention but very little of the commentary points out that executive retention is getting tougher for a lot of industries. Particularly in manufacturing, where US companies face stiff competition abroad, companies may find they need to pay out higher salaries and bigger bonuses in order to retain executives who might otherwise be lured away into higher-tech, growth industries.

This puts companies like Ford in a tight spot. Either they pump up executive compensation even while recording losses or low profits, thereby angering shareholders, or they keep a lid on compensation and risk losing some of their best corporate managers. There’s a technical term for this situation—downward spiral.

Managers See Leaving Ford As a Better Idea [Wall Street Journal]