post-Fordism and geographical scattering of the points of production

[Marxism-Thaxis] post-Fordism and geographical scattering of the points of production  https://www.mail-archive.com/marxism-thaxis@lists.econ.utah.edu/msg07169.html [Marxism-Thaxis] post-Fordism and geographical scattering of the points of production c b Mon, 19 Oct 2009 09:21:14 -0700 (continued) Fordism in Western Europe According to historian Charles Maier, Fordism proper was preceded in Europe by Taylorism, a technique of labor discipline and workplace organization, based upon supposedly scientific studies of human efficiency and incentive systems. It attracted European intellectuals — especially in Germany and Italy — at the fin de siècle and up until World War I.[12] After 1918, however, the goal of Taylorist labor efficiency thought in Europe moved to "Fordism", that is, reorganization of the entire productive process by means of the moving assembly line, standardization, and the mass market. The Great Depression blurred the utopian vision of American technocracy, but World War II and its aftermath have revived the ideal. The principles of Taylorism were quickly picked up by Lenin and applied to nascent Soviet industry. Later under the inspiration of Antonio Gramsci, Marxists picked up the Fordism concept in the 1930s and in the 1970s developed "Post-Fordism." Antonio and Bonanno (2000) trace the development of Fordism and subsequent economic stages, from globalization through neoliberal globalization, during the 20th century, emphasizing America's role in globalization. "Fordism" for Italian Marxist Antonio Gramsci meant routinized and intensified labor to promote production. They argue that Fordism peaked in the post-World War II decades of American dominance and mass consumerism but collapsed due to political and cultural crises in the 1970s. Advances in technology and the end of the Cold War ushered in a new "neoliberal" phase of globalization in the 1990s. They argue that negative elements of Fordism, such as economic inequality, remained, however, and related cultural and environmental troubles surfaced that inhibited America's pursuit of democracy. [edit] Fordism and the Soviet Union Historian Thomas Hughes (Hughes 2004) has detailed the way in which the Soviet Union in the 1920s and 1930s enthusiastically embraced Fordism and Taylorism, importing American experts in both fields as well as American engineering firms to build parts of its new industrial infrastructure. The concepts of the Five Year Plan and the centrally planned economy can be traced directly to the influence of Taylorism on Soviet thinking. Hughes quotes Stalin: American efficiency is that indomitable force which neither knows nor recognises obstacles; which continues on a task once started until it is finished, even if it is a minor task; and without which serious constructive work is impossible . . . The combination of the Russian revolutionary sweep with American efficiency is the essence of Leninism. (Hughes 2004, 251) Hughes describes how, as the Soviet Union developed and grew in power, both sides, the Soviets and the Americans, chose to ignore or deny the contribution of American ideas and expertise. The Soviets did this because they wished to portray themselves as creators of their own destiny and not indebted to their rivals. Americans did so because they did not wish to acknowledge their part in creating a powerful rival in the Soviet Union. [edit] Other Marxist variations Mass consumption is the other side of Fordism.Fordism is also a term used in Western Marxist thought for a "regime of accumulation" or macroeconomic pattern of growth developed in the US and diffused in various forms to Western Europe after 1945. It consisted of domestic mass production with a range of institutions and policies supporting mass consumption, including stabilizing economic policies and Keynesian demand management that generated national demand and social stability; it also included a class compromise or social contract entailing family-supporting wages, job stability and internal labor markets leading broadly shared prosperity—rising incomes were linked to national productivity from the late 1940s to the early 1970s. At the level of the labor process Fordism is Taylorist and as a national mode of regulation Fordism is Keynesianism. The social-scientific concept of "Fordism" was introduced by the French regulation school, sometimes known as regulation theory, which is a Marxist-influenced strand of political economy. According to the regulation school, capitalist production paradigms are born from the crisis of the previous paradigm; a newborn paradigm is also bound to fall into crisis sooner or later. The crisis of Fordism became apparent to Marxists in late 1960s. Marxist regulation theory talks of Regimes of Capital Accumulation (ROA) and Modes of Regulation (MOR). ROAs are periods of relatively settled economic growth and profit across a nation or global region. Such regimes eventually become exhausted, falling into crisis, and are torn down as capitalism seeks to remake itself and return to a period of profit. These periods of capital accumulation are "underpinned", or stabilised, by MOR. A plethora of laws, institutions, social mores, customs and hegemonies both national and international work together to create the environment for long-run capitalist profit. Fordism is a tag used to characterise the post-1945 long boom experienced by western nations. It is typified by a cycle of mass production and mass consumption, the production of standardized (most often) consumer items to be sold in (typically) protected domestic markets, and the use of Keynesian economic policies. Whilst the standard pattern is post-war America, national variations of this standard norm are well known. Regulation theory talks of National Modes of Growth to denote different varieties of Fordism across western economies. Fordism as an ROA broke down, dependent on national experiences, somewhere between the late 1960s and the mid-1970s. Western economies experienced slow or nil economic growth, rising inflation and growing unemployment. The period after Fordism has been termed Post-Fordist and Neo-Fordist. The former implies that global capitalism has made a clean break from Fordism (including overcoming its inconsistencies) whilst the latter that elements of the fordist ROA continued to exist. The Regulation School preferred the term After-Fordism (or the French Après-Fordisme) to denote that what comes after Fordism was, or is, not yet clear. [Marxism-Thaxis] post-Fordism and geographical scattering of the points of production c b Mon, 19 Oct 2009 09:22:40 -0700 Fordism (continued) Other meanings The concept may also refer to some of Ford's social views: It may also be applied to the fictional religion-like ideology described in Aldous Huxley's novel Brave New World. 'Our Ford', a parody on Our Lord, provides a centre-point in the religious celebration in Brave New World's society, and the name is used both as an incantation and source of authority throughout the book. It often describes the paternalistic "taking care of the worker" - a "family-like" mentality seen first in the auto-industry (Ford). The paternalism could be kindly (providing benefits) or restrictive (for example, Ford discouraged smoking even off premises).[citation needed] In a broader sense, Fordism refers to the classical 20th century consumer society: high productivity allows for high wages, mass production allows for mass consumption. [edit] Post-Fordism Main article: Post-fordism Information technology, white-collar work and specialization are some of the attributes of Post-fordism.The period after Fordism has been termed Post-Fordist . Fordism as a Return on assets (ROA) broke down, dependent on national experiences, somewhere between the late 1960s and the mid-1970s. Western economies experienced slow or nil economic growth, rising inflation and growing unemployment. The economies of western countries had shifted away from manufacturing and industry and towards service and the knowledge economy. Meanwhile, industry has moved from the west to second- and third-world countries, where production is cheaper. Most employees in the Fordist structure were able to purchase the product they produced.[citation needed] Indeed post-Fordism has arisen in part due to the increasing interconnectedness of the world.[citation needed] The movement of capital has become more fluid, and nation-states have withdrawn significantly from the economic sphere. Post-Fordism has arisen in part due to globalization. In Ford's time, laborers were relatively unskilled, but they could form unions, and these labor unions became very strong because capital was not so fluid. Post-Fordism can be characterized by the several attributes: • New information technologies. • Emphasis on types of consumers in contrast to previous emphasis on social class. • The rise of the service and the white-collar worker. •' The feminization of the work force. • The globalization of financial markets. Instead of producing generic goods, firms now found it more profitable to produce diverse product lines targeted at different groups of consumers, appealing to their sense of taste and fashion. Instead of investing huge amounts of money on the mass production of a single product, firms now needed to build intelligent systems of labor and machines that were flexible and could quickly respond to the whims of the market. Modern just in time manufacturing is one example of a flexible approach to production. Post-Fordism is very much driven by information technology. Advancement in computer technologies allows for just-in-time manufacturing. There is no longer a need to stock-up on a given product. Products are made and then they are out the door. The key to production flexibility lies in the use of informational technologies in machines and operations. These permit more sophisticated control over the production process. With increasing sophistication of automated processes and, especially, the new flexibility of electronically controlled technology, far-reaching changes in the process of production need not necessarily be associated with increased scale of production. Indeed, one of the major results of the new electronic and computer-aided production technology is that it permits rapid switching from one part of a process to another and allows - at least potentially - the tailoring of production to the requirements of individual customers. Traditional automation is geared to high-volume standardized production; the newer ‘flexible manufacturing systems’ are quite different, allowing the production of small volumes without a cost penalty. This creates less space needed, which creates less rent. Modular processes can be taken advantage of to create custom & limited products for niche markets. Focus is now on the principal task of manufacturing. Companies are smaller and subcontract many tasks. Likewise, the production structure began to change on the sector level. Instead of a single firm manning the assembly line from raw materials to finished product, the production process became fragmented as individual firms specialized on their areas of expertise. As evidence for this theory of specialization, proponents claim that clusters of integrated firms, have developed in places like Silicon Valley, Jutland, Småland, and several parts of Italy. [edit] See also Division of labour [edit] References ^ "Fordism & Postfordism". www.willamette.edu. http://www.willamette.edu/~fthompso/MgmtCon/Fordism_&_Postfordism.html. Retrieved 2008-12-26. ^ Foner, Eric (2006). Give Me Liberty!: An American History. New York:W.W Norton & Company, p.591-592. ^ Foner, Eric (2006). Give Me Liberty!: An American History. New York:W.W Norton & Company, p.591-592. ^ Foner, Eric (2006). Give Me Liberty!: An American History. New York:W.W Norton & Company, p.591-592. ^ Foner, Eric (2006). Give Me Liberty!: An American History. New York:W.W Norton & Company, p.591-592. ^ Foner, Eric (2006). Give Me Liberty!: An American History. New York:W.W Norton & Company, p.591-592. ^ Sward, Keith (1948). The Legend of Henry Ford. New York: Rinehart & Company, p. 53. ^ Rae, John B. (1969). Henry Ford. Englewood Cliffs, New Jersey: Prentice-Hall, p. 45. ^ Rae, John B. (1969). Henry Ford. Englewood Cliffs, New Jersey: Prentice-Hall, p. 36. ^ Hounshell 1984. ^ Abernathy 1978. ^ Maier, Charles S. (1970). "Between Taylorism and Technocracy: European Ideologies and the Vision of Industrial Productivity in the 1920's". Journal of Contemporary History (Sage Publications) 5 (2): 27-61. http://www.jstor.org/stable/259743. Retrieved 2009-02-08. [edit] Bibliography This article includes a list of references, related reading or external links, but its sources remain unclear because it lacks inline citations. Please improve this article by introducing more precise citations where appropriate. (April 2009) Antonio, Robert J. and Bonanno, Alessandro. "A New Global Capitalism? >From 'Americanism and Fordism' to 'Americanization-globalization.'" American Studies 2000 41(2-3): 33-77. ISSN 0026-3079. Banta, Martha. Taylored Lives: Narrative Production in the Age of Taylor, Veblen, and Ford. U. of Chicago Press, 1993. 431 pp. Doray, Bernard (1988). From Taylorism to Fordism: A Rational Madness. Holden, Len. "Fording the Atlantic: Ford and Fordism in Europe" in Business History Volume 47, #1 January 2005 pp 122–127. Hounshell, David A. (1984), From the American system to mass production, 1800-1932: The development of manufacturing technology in the United States, Baltimore, Maryland, USA: Johns Hopkins University Press, LCCN 83-016269, ISBN 978-0-8018-2975-8 . Hughes, Thomas P. (2004). American Genesis: A Century of Invention and Technological Enthusiasm 1870-1970. 2nd ed. The University of Chicago Press. Jenson, Jane. "'Different' but Not 'Exceptional': Canada's Permeable Fordism," Canadian Review of Sociology and Anthropology, Vol. 26, 1989 Koch, Max. (2006). Roads to Post-Fordism: Labour Markets and Social Structures in Europe Ling, Peter J. America and the Automobile: Technology, Reform, and Social Change chapter on “Fordism and the Architecture of Production” Maier, Charles S. "Between Taylorism and Technocracy: European Ideologies and the Vision of Industrial Productivity." Journal of Contemporary History (1970) 5(2): 27-61. Issn: 0022-0094 Fulltext online at Jstor Mary Nolan; Visions of Modernity: American Business and the Modernization of Germany Oxford University Press, 1994 online Spode, Hasso: "Fordism, Mass Tourism and the Third Reich." Journal of Social History 38(2004): 127-155. Pietrykowski, Bruce. "Fordism at Ford: Spatial Decentralization and Labor Segmentation at the Ford Motor Company, 1920-1950," Economic Geography, Vol. 71, (1995) 383-401online Roediger, David, ed. "Americanism and Fordism - American Style: Kate Richards O'hare's 'Has Henry Ford Made Good?'" Labor History 1988 29(2): 241-252. Socialist praise for Ford in 1916 . Shiomi, Haruhito and Wada, Kazuo. (1995). Fordism Transformed: The Development of Production Methods in the Automobile Industry Oxford University Press. Tolliday, Steven and Zeitlin, Jonathan eds. (1987) The Automobile Industry and Its Workers: Between Fordism and Flexibility Comparative analysis of developments in Europe, Asia, and the United States from the late 19th century to the mid-1980s. Watts, Steven. (2005). The People's Tycoon: Henry Ford and the American Century. Williams, Karel, Colin Haslam and John Williams, "Ford versus `Fordism': The Beginning of Mass Production?" Work, Employment & Society, Vol. 6, No. 4, 517-555 (1992). Stress on Ford's flexibility and commitment to continuous improvements. Retrieved from "http://en.wikipedia.org/wiki/Fordism"; Categories: Production and manufacturing | Economics of production | Manufacturing | Industry | Social theories | Economic history | History of science and technology in the United States | Economic history of the United States Hidden categories: Articles needing cleanup from June 2009 | All pages needing cleanup | All articles with unsourced statements | Articles with unsourced statements from August 2009 | Articles with unsourced statements from March 2008 | Articles with unsourced statements from April 2008 | Articles with unsourced statements from August 2007 | Articles lacking in-text citations from April 2009 ______ Ford River Rouge Complex Ford River Rouge Complex U.S. National Register of Historic Places U.S. National Historic Landmark District Aerial view of the Rouge Complex in 1942 Location: Dearborn, Michigan Built/Founded: 1917 - 1928 Architect: Albert Kahn Governing body: Private Added to NRHP: June 2, 1978[1] Designated NHLD: June 2, 1978[2] NRHP Reference#: 78001516 The Ford River Rouge Complex (commonly known as the Rouge Complex or just The Rouge) is a Ford Motor Company automobile factory complex located in Dearborn, Michigan, along the Rouge River, upstream from its confluence with the Detroit River at Zug Island. Construction began in 1917, and when it was completed in 1928 it had become the largest integrated factory in the world. Contents [hide] 1 Structure 2 Production 3 Ford Rouge Center 4 Architecture 5 References 6 External links [edit] Structure The Rouge measures 1.5 miles (2.4 km) wide by 1 mile (1.6 km) long, including 93 buildings with nearly 16 million square feet (1.5 km²) of factory floor space. With its own docks in the dredged Rouge River, 100 miles (160 km) of interior railroad track, its own electricity plant, and ore processing, the titanic Rouge was able to turn raw materials into running vehicles within this single complex, a prime example of vertical-integration production. Over 100,000 workers were employed there in the 1930s. Some of the Rouge buildings were designed by Albert Kahn. His Rouge glass plant was regarded at the time as an exemplary and humane factory building, with its ample natural light coming through windows in the ceiling. More recently, several buildings have been converted to "green" structures with a number of environmentally friendly features. However, many vehicular skeletons remain buried on the grounds of the Rouge. In the summer of 1932, through Edsel Ford's support, Diego Rivera studied the facilities at the Rouge; these studies became a major part of his mural Detroit Industry, still on display at the Detroit Institute of Arts. [edit] Production Interior of the Rouge Tool & Die works, 1944The Rouge's first products were Eagle Boats, World War I anti-submarine warfare boats produced in Building B. The original Building B, a three-story structure, is part of the legendary Dearborn Assembly Plant, which started producing Model A's in the late 1920s and continued production through 2004. After the war, production turned to Fordson tractors. Although the Rouge's coke ovens and foundry produced nearly all the parts of the Model T, assembly of that vehicle remained at Highland Park. It was not until 1927 that automobile production began there, with the introduction of the Ford Model A. Later Rouge products included the 1932 Ford V8, the original Mercury, the Ford Thunderbird, and four decades of Ford Mustangs. The old assembly plant was idled with the construction and launch of a new assembly facility on the Miller Road side of the complex, currently producing Ford F-150 and Lincoln Mark LT pickup trucks. On May 26, 1937, a group of workers attempting to organize a union at the Rouge were beaten severely, an event later called the Battle of the Overpass. Peter E. Martin's respect for labor led to Walter Reuther, a UAW leader, allowing Martin to be the only Ford manager to retrieve his papers or gain access to the plant.[3] After the 1960s, Ford began to decentralize manufacturing, building many factories across the country. The Rouge, too, was downsized, with many units (including the famous furnaces and docks) sold off to independent companies. By 1992, only Mustang production remained at the Dearborn Assembly Plant (DAP). In 1987 Ford planned to replace that car with the front wheel drive Ford Probe, but public outcry quickly turned to surging sales. With the fourth-generation Mustang a success, the Rouge was saved as well. Ford decided to modernize its operations and built a new power plant to replace the original one, in which a gas explosion on February 1, 1999, killed six employees and injured two dozen more. As it ended production, Dearborn Assembly Plant (DAP) was one of six plants within the Ford Rouge Center. The plant was open from 1918 to May 10, 2004 with a red convertible 2004 Ford Mustang GT being the last vehicle built at the historic site. Demolition of the historic DAP facility was completed in 2008. (continued) Ford Rouge Center Today, the Rouge site is home to Ford's Rouge Center. This industrial park includes six Ford factories on 600 acres (2.4 km²) of land, as well as steelmaking operations run by Severstal North America, a Russian steelmaker. The new Dearborn Truck factory famously features a vegetation-covered roof and rainwater reclamation system designed by sustainability architect William McDonough. This facility is still Ford's largest factory and employs some 6,000 workers. Mustang production, however, has moved to the AutoAlliance International plant in Flat Rock, Michigan. Tours of the factory were a long tradition. Tours of the facility began in 1924 and ran until 1980. They resumed in 2004 in cooperation with The Henry Ford Museum with multimedia presentations as well as viewing of the assembly floor. The management of Dearborn Truck has decreed that no vehicles from other manufacturers may park in the main employee lot. A sign proclaims "Ford family vehicles only." Hourly workers from both Ford and Severstal facilities at the complex are represented by UAW Local 600. The Ford's SS William Clay Ford was based out of the River Rouge Plant. [edit] Architecture In 1999 Architect William McDonough entered into an agreement with Ford Motor Company to redesign its 85-year-old, 1,212-acre (4.90 km2) Rouge River facility.[4] The roof of the 1.1 million square foot (100,000 m²) Dearborn truck assembly plant was covered with more than 10 acres (40,000 m²) of sedum, a low-growing ground cover. The sedum retains and cleanses rain water, as well as moderating the internal temperature of the building, to save energy. The roof is part of an $18 million rainwater treatment system designed to clean 20 billion gallons (76,000,000 m³) of rainwater annually, and sparing Ford from a $50 million mechanical treatment facility.[5] [edit] References ^ "National Register Information System". National Register of Historic Places. National Park Service. 2007-01-23. http://www.nr.nps.gov/. ^ "Ford River Rouge Complex". National Historic Landmark summary listing. National Park Service. http://tps.cr.nps.gov/nhl/detail.cfm?ResourceId=1760&ResourceType=District. Retrieved 2008-06-27. ^ Bryan, Ford: "Henry's Lieutenants", page 214, Wayne State University Press, 1993 ^ http://www.metropolismag.com/html/content_0801/mcd/ ^ http://archrecord.construction.com/features/bwarAwards/archives/04b_fordRouge.asp [edit] External links Photos from the Rouge Steel mill Coordinates: 42°18′34″N 83°09′44″W / 42.30941°N 83.16212°W / 42.30941; -83.16212 [show]v • d • eMetro Detroit Topics Architecture · Celebrities · Culture · Economy · Freeways · History · Historic places · International Riverfront · Lake St. Clair · Media · Music · Parks and beaches · Skyscrapers · Sports · Theatre · Tourism · Transportation Central city Detroit Suburbs over 80,000 Canton Township · Clinton Township · Dearborn · Livonia · Sterling Heights · Troy · Warren · Westland Suburbs 50,000 to 80,000 Dearborn Heights · Farmington Hills · Grosse Pointe · Macomb Township · Novi · Pontiac · Redford Township · Rochester Hills · Royal Oak · Saint Clair Shores · Shelby Township · Southfield · Taylor · Waterford Township · West Bloomfield Township Satellite cities Ann Arbor · Brighton · Flint · Howell · Lapeer · Monroe · Port Huron · Windsor, Ontario Region Southeast Michigan Outlying regions Flint/Tri-Cities · The Thumb · Northwest Ohio Counties in MSA Lapeer · Livingston · Macomb · Oakland · St. Clair · Wayne Counties in CSA Genesee · Monroe · Washtenaw See also: Michigan [show]v • d • eIndustrial landmarks in metropolitan Detroit City Antietam Avenue Bridge • Cass Motor Sales • Chestnut Street Bridge • Crescent Brass and Pin Company Building • Detroit Edison Company Willis Avenue Station • Dry Dock Engine Works-Detroit Dry Dock Company Complex • Edwin S. George Building • Globe Tobacco Building • Graybar Electric Company Building • Milwaukee Junction • New Amsterdam Historic District • Parke-Davis and Company Pharmaceutical Company Plant • Parke-Davis Research Laboratory • Piquette Avenue Industrial Historic District • Piquette Plant • Frederic M. Sibley Lumber Company Office Building • Frederick Stearns Building • Stuber-Stone Building • West Jefferson Avenue-Rouge River Bridge Suburbs Ford River Rouge Complex • The Henry Ford • Willow Run See also List of Registered Historic Places in Michigan [show]v • d • eHistory of Michigan Timeline Glaciation · Paleo-Indian · Archaic · Woodland · Algonquian · French · British · Territory · State Native Ojibwa · Potawatomi · Menominee · Fox · Sac · Ottawa · Mascouten · Kickapoo · Miami Colonial Fur Trade · Coureurs des Bois · Iroquois Wars · New France · Detroit · Fox Wars · Fort Michilimackinac · Seven Years' War · Peace of Paris · Pontiac's Rebellion · Royal Proclamation · Indian Reserve · Quebec Act · Revolutionary War · Treaty of Paris United States Northwest Territory · Jay Treaty · Treaty of Saginaw · Treaty of Chicago · Chicago Road · Toledo War · Clinton-Kalamazoo Canal · Battle of Windsor · Treaty of Fond du Lac · Treaty of La Pointe · Civil War · Auto Makers · River Rouge Plant · Willow Run · Ambassador Bridge · Detroit–Windsor Tunnel · Flint Sit-Down Strike · Mackinac Bridge · 1967 Detroit riot · Gerald Ford [show]v • d • eU.S. National Register of Historic Places Keeper of the Register · History of the National Register of Historic Places · Property types · Historic district · Contributing property List of entries National Park Service · National Historic Landmarks · National Battlefields · National Historic Sites · National Historical Parks · National Memorials · National Monuments Retrieved from "http://en.wikipedia.org/wiki/Ford_River_Rouge_Complex"; Categories: Historic districts in the United States | Ford factories | National Historic Landmarks in Michigan | Motor vehicle assembly plants in Michigan | 1917 architecture | Buildings and structures in Dearborn, Michigan ViewsArticle Discussion Edit this page History Personal toolsTry Beta Log in / create account Navigation Oddly enough in this post-Fordist era , Ford has a bit of a turnaround from disater. And afterall, even Wall Street went broke these days CB http://www.ford.com/about-ford/news-announcements/press-releases/press-releases-detail/pr-ford-posts-third-quarter-2009-net-31244 FORD POSTS Q3 2009 NET INCOME OF $1 BILLION; CASH FLOW TURNS POSITIVE; NORTH AMERICA PROFITABLE Print | Email this page | Subscribe Reported net income of $997 million, or 29 cents per share, an improvement of $1.2 billion from the third quarter of 2008. Pre-tax operating profit totaled $1.1 billion, an improvement of $3.9 billion from a year ago. It is Ford’s first pre-tax operating profit since the first quarter of 2008 Ford North America posted a pre-tax operating profit of $357 million, its first profitable quarter since the first quarter of 2005 Reduced Automotive structural costs by $1 billion, bringing the total reduction to $4.6 billion through the first nine months of 2009, and exceeding the full-year target of $4 billion A strong product lineup drove market share gains in North America, South America and Europe as well as continued improvements in transaction prices and margins Ended the quarter with $23.8 billion of Automotive gross cash, up $2.8 billion from the end of second quarter 2009++ Achieved positive Automotive operating-related cash flow of $1.3 billion for the third quarter, a $2.3 billion improvement over the second quarter Ford Credit reported a pre-tax operating profit of $677 million, a $516 million improvement from a year ago Ford now expects to be solidly profitable in 2011, excluding special items, with positive operating-related cash flow Financial Results Summary Third Quarter First Nine Months 2009 O/(U) 2008 2009 O/(U) 2008 Wholesales (000)+ 1,232 57 3,377 (891) Revenue (Bils.) + $ 30.9 $ (0.8) $ 82.9 $ (26.2) Operating Results + Automotive Results (Mils.) $ 446 $ 3,385 $ (2,493) $ 523 Financial Services (Mils.) 661 502 1,194 1,305 Pre-Tax Results (Mils.) $ 1,107 $ 3,887 $ (1,299) $ 1,828 After-Tax Results (Mils.)+++ $ 873 $ 3,882 $ (1,557) $ 2,381 Earnings Per Share +++ $ 0.26 $ 1.58 $ (0.54) $ 1.22 Special Items Pre-Tax (Mils.) $ 108 $ (2,099) $ 3,265 $ 9,484 Net Income/(Loss) Attributable to Ford After-Tax Results (Mils.) $ 997 $ 1,158 $ 1,831 $ 10,619 Earnings Per Share $ 0.29 $ 0.36 $ 0.61 $ 4.55 Automotive Gross Cash (Bils.) ++ $ 23.8 $ 4.9 $ 23.8 $ 4.9 See end notes on page 10. DEARBORN, Mich., Nov. 2, 2009 – Ford Motor Company [NYSE: F] today reported net income of $997 million, or 29 cents per share, in the third quarter as strong new products, structural cost reductions and improved results at Ford Credit lifted the company’s results despite continued weak global economic conditions. This is a $1.2 billion improvement compared with the same period last year. Excluding special items, Ford posted pre-tax operating profits totaling $1.1 billion, an improvement of $3.9 billion from a year ago. This marks the company’s first operating profit since the first quarter of 2008. On an after-tax basis, excluding special items, Ford posted an operating profit of $873 million in the third quarter, or 26 cents per share, compared with a loss of $3 billion, or $1.32 per share, a year ago. Ford’s North American operations posted a pre-tax operating profit of $357 million, its first quarterly profit since the first quarter of 2005. Ford South America, Ford Europe and Ford Asia Pacific Africa also posted pre-tax operating profits in the third quarter. “Our third quarter results clearly show that Ford is making tremendous progress despite the prolonged slump in the global economy,” said Ford President and CEO Alan Mulally. “Our solid product lineup is leading the way in all markets. While we still face a challenging road ahead, our One Ford transformation plan is working and our underlying business continues to grow stronger.” Ford’s third quarter revenue was $30.9 billion, down $800 million from the same period a year ago. Automotive revenue is up $100 million from a year ago. This improvement was offset by a decrease in Ford Credit’s revenue reflecting a decline in receivables. Ford reduced its Automotive structural costs by $1 billion in the quarter, largely driven by lower manufacturing and engineering costs, which included benefits from improved productivity, personnel reduction actions primarily in North America and Europe, and progress on implementing its common global platforms and product development processes. Through the first nine months, Ford has achieved $4.6 billion in Automotive structural cost reductions, exceeding its full-year 2009 target of $4 billion. Ford finished the third quarter with $23.8 billion in Automotive gross cash, compared with $21 billion at the end of the second quarter of 2009. Automotive operating-related cash flow was $1.3 billion positive during the third quarter of 2009, an improvement of $2.3 billion from the second quarter 2009. Automotive operating-related cash flow was $3.4 billion negative during the first nine months. “The Ford team delivered another solid quarter of results with strong contributions from all our business regions,” said Lewis Booth, Ford executive vice president and chief financial officer. “Positive cash flow, a stronger balance sheet and a third quarter operating profit are evidence that Ford is meeting the global economic challenges.” The following discussion of third quarter highlights and results are on a pre-tax basis and exclude special items. See tables following “Safe Harbor/Risk Factors” for the nature and amount of these special items and any necessary reconciliation to U.S. GAAP. Discussion of Automotive overall operating cost changes is at constant volume, mix, and exchange, and excludes special items; discussion of Automotive structural cost changes is at constant exchange and excludes special items. THIRD QUARTER HIGHLIGHTS Ford again increased year-over-year market share in North America, South America, and Europe and continued to achieve improvements in transaction prices and margins. Ford maintained market share in the Asia Pacific Africa region and Volvo gained market share. Other sales highlights: In the U.S., third quarter market share increased 2.2 percentage points compared to last year as the Ford, Lincoln and Mercury brands all posted sales gains Ford Europe’s market share was 9.2 percent for the quarter, up 0.6 points from last year and the highest third-quarter level in 10 years. Market share was 10.1 percent in September, the highest monthly share in eight years Record growth in China continued as Ford third quarter sales jumped 63 percent At the end of the third quarter, worldwide sales of the new Ford Fiesta reached 470,000 units since its launch last fall. The No. 2 best-selling car in Europe posted its highest September sales since 1994. In September, Fiesta also had its best sales month ever in China. Fiesta arrives in the U.S. market in 2010 Began selling the new Ford Taurus and Transit Connect in North America. Taurus sales in September were up 60 percent from a year ago The Ford Focus and Ford Escape were among the top new vehicles purchased in the U.S. government’s “Cash for Clunkers” program Ford’s U.S. hybrid sales have risen 73 percent this year compared to a 14 percent decline in U.S. hybrid industry sales. More than 60 percent of Ford Fusion hybrid sales have come from non-Ford owners Began production of the Ford Transit Connect small commercial van at the new manufacturing plant in Craiova, Romania Announced investment of $500 million at Ford India’s Chennai assembly plant to build the new Ford Figo, a small car targeted at the heart of the Indian market, debuting in 2010 Announced a new $490 million assembly plant in Chongqing, China, which will be completed by 2012, and will produce the Ford Focus for the Chinese market Ford, Lincoln and Mercury brand vehicles in the U.S. had the fewest number of “things gone wrong” among all automakers, according to the third quarter GQRS study of new vehicle quality Received $886 million in loans from the U.S. Department of Energy for development of more fuel-efficient vehicles. Ford has been approved for up to $5.9 billion in loans in support of projected expenditures through mid-2012 Raised $565 million in new equity as Ford completed its previously-announced plan to issue up to $1 billion of equity Ford Credit completed $10 billion in funding in the third quarter, including $2.8 billion unsecured, and now has essentially completed its full-year funding plan The Ford Taurus and Lincoln MKT both earned a “Top Safety Pick” from the Insurance Institute for Highway Safety. Ford Motor Company continues to have more IIHS “Top Safety Pick” ratings than any other automaker Unveiled the all-new Ford C-MAX at the Frankfurt Motor Show. The C-MAX and the Grand C-MAX will debut in Europe in 2010, and the Grand C-MAX debuts in the U.S. in 2011. The new global C-car platform will underpin up to 10 models and more than 2 million units annually by 2012 Announced that Ford’s 1.6-liter and 2.0-liter four-cylinder EcoBoost engines will make their debut in 2010 across Europe, North America, and Australia Unveiled the new Ford Figo to compete in India’s small car segment beginning in 2010 Launched the new Ford Fiesta in Taiwan and continued the successful rollout of the Ford Focus and Ford Everest SUV in additional Asian markets Revealed the new 2011 Ford F-Series Super Duty and two new powertrains developed by Ford – a 6.7-liter V8 diesel engine and a 6.2-liter V8 gasoline engine Began selling the 2010 Ford F-150 SVT Raptor, an off-road performance truck, which captured the “2009 Pickup Truck of Texas” award from the Texas Auto Writers. The Ford F-150 won the overall “Truck of Texas” award, the seventh straight year a Ford truck has earned the honor AUTOMOTIVE SECTOR Automotive Sector* Third Quarter First Nine Months 2009 O/(U) 2008 2009 O/(U) 2008 Wholesales (000) 1,232 57 3,377 (891) Revenue (Bils.) $ 27.9 $ 0.1 $ 73.3 $ (23.6) Pre-Tax Results (Mils.) $ 446 $ 3,385 $ (2,493) $ 523 *excludes special items For the third quarter of 2009, Ford’s Automotive sector reported a pre-tax operating profit of $446 million, compared with a pre-tax loss of $2.9 billion a year ago. The improvement primarily reflects favorable net pricing, structural cost reductions, lower material costs and improved market share, offset partially by unfavorable exchange and lower industry volumes. Worldwide Automotive revenue in the third quarter was $27.9 billion, up $100 million from a year ago. The increase is more than explained by favorable net pricing and higher volumes, primarily in North America, offset partially by unfavorable exchange. Total vehicle wholesales in the third quarter were 1,232,000, compared with 1,175,000 units a year ago. Automotive structural cost reductions in the third quarter totaled $1 billion, including $500 million in North America. Manufacturing and engineering costs were $500 million lower, largely reflecting the continued benefits of improved productivity, personnel reduction actions primarily in North America and Europe, and progress on the implementation of Ford’s common global platforms and product development processes. Pension and retiree health care costs were lower, reflecting the effect of the UAW Retiree Health Care VEBA agreement. Overall, Ford reduced Automotive structural costs by $4.6 billion during the first nine months. Net pricing was $1.9 billion favorable, primarily explained by higher U.S. net pricing, reflecting the success of new products, a continued disciplined approach on incentives and selective top-line pricing. North America: For the third quarter, Ford North America reported a pre-tax operating profit of $357 million, compared with a loss of $2.6 billion a year ago. The improvement was primarily explained by favorable net pricing, lower material costs, structural cost reductions, favorable series mix and improved market share, offset partially by unfavorable exchange and lower U.S. industry volume. Third quarter revenue was $13.7 billion, up from $10.8 billion a year ago. South America: For the third quarter, Ford South America reported a pre-tax operating profit of $247 million, compared with a profit of $480 million a year ago. The decrease is more than explained by unfavorable exchange, primarily in Brazil and Argentina. Third quarter revenue was $2.1 billion, down from $2.7 billion a year ago. Europe: For the third quarter, Ford Europe reported a pre-tax operating profit of $193 million, compared with a profit of $69 million a year ago. The improvement was more than explained by structural cost reductions, lower material costs and favorable net pricing, offset partially by unfavorable volume and mix and exchange. Third quarter revenue was $7.6 billion, down from $9.7 billion a year ago. Asia Pacific Africa: For the third quarter, Ford Asia Pacific Africa reported a pre-tax operating profit of $27 million, compared with a profit of $4 million a year ago. The increase primarily reflects favorable net pricing, China joint venture profits, and cost reductions, offset partially by unfavorable exchange. Third quarter revenue was $1.5 billion, down from $1.7 billion a year ago. Volvo: Volvo continues to be reported as an ongoing operation. The effects of “held-for-sale” accounting-related adjustments are reported as special items. For the third quarter, Volvo reported a pre-tax operating loss of $135 million, compared with a loss of $458 million a year ago. The improvement is more than explained by continued progress on cost reductions, favorable exchange, and higher volume and mix. Third quarter revenue was $3 billion, up from $2.9 billion a year ago. Also, as announced last week, Ford confirmed Geely as the preferred bidder in the ongoing discussions concerning the possible sale of Volvo Cars. Other Automotive: Other Automotive, which consists primarily of interest and financing-related costs, was a third quarter pre-tax loss of $243 million. FINANCIAL SERVICES SECTOR Financial Services Sector* Third Quarter First Nine Months (in millions) 2009 O/(U) 2008 2009 O/(U) 2008 Ford Credit Pre-Tax Results $ 677 $ 516 $ 1,287 $ 1,388 Other Financial Services (16) (14) (93) (83) Financial Services Pre-Tax Results $ 661 $ 502 $ 1,194 $ 1,305 *excludes special items For the third quarter, the Financial Services sector reported a pre-tax operating profit of $661 million, compared with a profit of $159 million a year ago. Ford Motor Credit Company: For the third quarter, Ford Credit reported a pre-tax operating profit of $677 million, compared with a pre-tax profit of $161 million a year ago. The increase primarily reflected lower residual losses due to higher auction values, and lower provisions for credit losses, offset partially by lower volume. Other Financial Services: For the third quarter, Other Financial Services reported a pre-tax operating loss of $16 million in the third quarter, compared with a loss of $2 million a year ago. OUTLOOK Despite the severe global downturn, Ford said it continues to make progress on all four pillars of its plan: Aggressively restructure to operate profitably at the current demand and changing model mix Accelerate the development of new products that customers want and value Finance the plan and improve the balance sheet Work together effectively as one team, leveraging Ford’s global assets Ford said it remains on track to achieve or exceed all of its 2009 financial targets and almost all of its operational metrics. Ford will also continue to pursue actions to improve its balance sheet. Ford expects full-year 2009 U.S. industry sales will be about 10.6 million units, consistent with the guidance previously communicated by the company. In Europe, Ford now expects that full-year industry sales will be about 15.7 million units, which is higher than its previous guidance. Ford expects fourth quarter 2009 production to be up compared with year-ago levels and third quarter 2009 production. This increase is to return to planned dealer stock levels and match production with market demand for Ford products. Ford now expects full-year Automotive structural cost reductions of about $5 billion, exceeding its full-year 2009 target. These costs were reduced by $4.6 billion through the first nine months. Going forward, Ford expects structural costs to be relatively stable as the company has largely completed its significant restructuring actions over the past four years. The company said it expects full-year U.S. and Europe market share to remain at about the same levels achieved during the first nine months. Ford expects Automotive operating-related cash flow to be positive in the fourth quarter, based on the company’s present planning assumptions. Ford now expects capital spending of about $5 billion, or slightly less. Capital expenditures through the first nine months were $3.4 billion; higher projected fourth quarter spending reflects the timing of Ford’s product launches as the company maintains its product plans. Ford Credit expects to be profitable in the fourth quarter and for the full-year 2009. Next year, Ford Credit expects reduced profits based on lower average receivables and the non-recurrence of favorable 2009 factors. Based on its recent performance and present planning assumptions, Ford is changing its full-year 2011 guidance for total company and North American Automotive operations from being “breakeven or better” to “solidly profitable” on a pre-tax basis excluding special items, with positive Automotive operating-related cash flow. While the company has confidence that the global economy will be improving by 2011, the near-term growth outlook remains rather uncertain. Looking at 2010, there is a high likelihood of a substantial decrease in European industry volume as scrappage programs expire. This decrease could more than offset U.S. sales volumes, which may improve somewhat from this past quarter’s levels. Ford expects to know more about the state of the global economic recovery and its impact on 2010 auto industry volumes in the coming months. Early next year, Ford will provide guidance on its 2010 planning assumptions and operational metrics when the company releases its full-year 2009 results. “The third quarter is one the entire Ford extended team can be proud of because it proves that our product-led transformation is working,” Mulally said. “Leading indicators are now showing signs of recovery in all of our major markets, however, consumer confidence and labor market conditions remain a concern.” “Despite the continued economic headwinds, we remain confident that we have the right plan and are taking the right actions to transform Ford into a lean company that delivers profitable growth for all our stakeholders,” Mulally added. Ford’s 2009 planning assumptions regarding the industry and operating metrics include the following: Planning Assumptions Full Year Plan Full Year Outlook Memo: First Nine Months Industry Volume (SAAR)**: Sent from my iPhone