Ford profits soar thanks to strong sales in North America. The automaker is bringing in so much cash, there are now questions about how best to spend it. Bobbi Rebell reports.
Ford profits drive on
Ford following the roadmap of rival General Motors. It reported a quarterly jump in profit as U.S. consumers continue to buy a lot of trucks. Ford was able to raise prices and make more money on each vehicle.
The question now, says Reuters transportation editor Joe White, is what to do with the $2.8 billion in cash flow?
SOUNDBITE: JOE WHITE, REUTERS TRANSPORTATION EDITOR (ENGLISH) SAYING:
“The CFO talked today about paying off debt. Obviously they have got a union contract to settle. Third on the list was returning cash to shareholders, but, I think, that is going to be a question that people are going to start asking of Ford if they keep racking up the numbers like this.”
Shares gave back recent gains on Tuesday because taxes were higher than expected. Upcoming union negotiations are also a concern because workers will want a piece of those hefty profits.
But the outlook for Ford and the industry remains on track, says Ford Chief Financial Officer Bob Shanks:
SOUNDBITE: BOB SHANKS, CHIEF FINANCIAL OFFICER, FORD MOTOR (ENGLISH) SAYING:
“Consumer sentiment is good, employment is good. You know, a lot of factors that give people reasons to buy are positive, and, so, it’s continuing to drive the overall industry forward.”
That said, China remains challenging. So does Europe, where Ford is still losing money.