Ford still posted a pre-tax loss of $45 million in North America but this represents a substantial improvement on last year’s loss of $613 million. In Europe Ford posted a pre-tax gain of $739 million but this result does not include any losses or gains from either Jaguar or Land Rover, which were formally sold to India’s Tata during the quarter.
"The improvement reflected cost reductions of $1.2 billion, including lower structural and product costs," Ford said in a statement. "These improvements were partly offset by unfavorable volume and mix, and net pricing."
The initiatives of CEO Alan Mulally, who stepped in less than two years ago, are showing positive results during the worst auto-sales downturn in more than a decade. The challenge now for the former Boeing boss is to return Ford’s North American operations to profitability by 2009.
Volvo reported a pretax loss of $151 million, compared with a profit of $94 million just one year ago, adding to speculation Ford may in fact sell the unit. This is also the first time that Ford has released separate earnings information for the Swedish subsidiary.