Ford's double edged Q2 profits

Having lost $12.6 billion last year, conventional wisdom saw Ford as the most suffering and needing of concessions from workers in the contract talks that began this week. So while executives and shareholders may be celebrating, the timing of this news may just shift the entire context of negotiations:

Ford Motor Co. today reported a net profit of 31 cents per share, or $750 million, for the April-June period — a stunning improvement from the net loss of 17 cents per share or $317 million during the same second-quarter period a year ago.

The surprise second-quarter profit ends seven quarters of losses, with improvements in all of the company’s core automotive operations. Ford’s total results for the first half of the year now stand in the black, at $458 million.

Talk about bittersweet news for a company looking to close plants, cut jobs and wages and massively reduce retiree healthcare benefits. And even the press, stenographers of Big Three press releases of late, put two and two together:

The positive performance suggests Ford could be much further along in its Way Forward turnaround plan than many believed. That plan is slated to close 16 plants, eliminate 44,000 jobs and revamp the company’s lineup in the crucial North American unit, with a goal of profitability in 2009.

The report notes that Ford was able to "get consumers to pay more", which is probably not sustainable. But they added a cool two billion to their cash reserves, and they are looking to sell their Jaguar, Land Rover and Volvo brands, each of which should net a pretty penny. And after the gold calf they build for Alan Mullaly, there should be plenty of left over dosh to invest in research and development -- it might take a lot of high powered scientists to realize that you need to offer hybrid vehicles in more than just SUV form, like Ford does with the Escape.

Look, this doesn't put the UAW in the clear; there is still a long way to go for a company that took out $20 billion in loans last year. But all that premature talk about the necessity of huge huge concessions may look a bit foolish.

Also of note:

DaimlerChrysler AG’s Mercedes Car Group saw its earnings improve by 72% in the past three months compared to the second quarter of 2006, the company announced this morning.

The luxury automaker earned nearly 1.2 billion euros ($1.65 billion) in the second quarter of this year and has posted earnings of 2 billion euros for the first half of this year.

Coincides nicely with the rise in CEO pay.