Cost-cutting yields surging profits for Ford: $6.4 BILLION in 9 months.

[Hannah Bell]

Ford Motor Co. earlier this week announced third-quarter profits of $1.7 billion, up 68 percent from a year ago. Ford’s sixth straight quarterly profit—which beat analysts’ estimates—was attained chiefly through a brutal wage and cost-cutting drive, implemented with the full assistance of the United Auto Workers union (UAW).

The earnings were Ford’s highest third-quarter profits since 1990 and follow second-quarter net income of $2.6 billion. Although this year’s sales remain well below 2008 levels, the Dearborn, Michigan-based automaker has netted $6.4 billion over the first nine months of 2010 and is on track for one of its most profitable years ever.

Total US car and light truck sales fell to less than 10 million in 2009, down from more than 17 million earlier in the decade, and current sales levels remain the lowest in decades.

Over the last four years, Ford has cut its North American workforce by nearly 50 percent, to about 65,000 hourly and salaried workers...

Record profits will mean a windfall for the corporation’s top executives. While auto workers were forced to take huge wage and benefit cuts last year, Ford CEO Alan Mulally was paid $17.9 million in 2009. He also saw the value of his 5 million stock options—bought at $1.96 per share—increase by nearly $50 million, according to executive compensation web tracker Equilar.

The UAW apparatus will also cash in. On Friday, Ford is scheduled to make a $3.6 billion cash payment to the retiree health care trust fund controlled by the UAW. The multibillion-dollar payoff to the UAW, which also controls a substantial number of Ford shares, is a reward for the UAW’s collaboration in the destruction of the gains won by auto workers over generations of struggle. By setting up the trust fund, known as a Voluntary Employees Beneficiary Association or VEBA, the UAW has relieved the auto company of its obligations to pay medical expenses for retirees, an achievement won by auto workers in the 1950s.

http://www.wsws.org/articles/2010/oct2010/ford-o28.shtml

[global1]

1. Why Should They Create New Jobs When They Can Cut The Workforce And Make ......

record profits? Where's the incentive? This is happening in most businesses out there - where they can squeeze those left behind to do both their own work and that of those that have been made redundant.

Unfortunately - this strategy will only work for a short period of time - because there will become a point where there will be few buyers left that can afford to purchase the products that the company manufactures.

We're going to keep spiraling down the rabbit hole if this strategy keeps up.

The only way we're going to climb out of this economic rabbit hole is to put people back to work so they can earn money and pay taxes. Give people back their self-respect and they will feel safe to begin buying again - and that will fuel the economy.

Keep squeezing blood from a turnip however - and I'm afraid we will be moving toward that depression that to this point we've avoided.

[Name removed]

2. Deleted message

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[the redcoat]

3. 17.9 mil?!

Damn, I should become CEO of Ford.

What would be so bad with having a $10 mil salary and giving jobs and a respectable wage to 100 workers?