Just because car prices are experiencing slow-motion deflation and sales sans incentives tanked last month doesn't mean you can't triple your profits.
The Ford Motor Company reported a $1.17 billion second-quarter profit on Tuesday, nearly tripling its earnings from the period a year earlier.Like so much of the US economy, moving out of M-C-M' and straight into M-M' seems the way to go. As Giovanni Arrighi argues convincingly, financialization is the beginning of the death throes of a production model and a hegemonic economy, but hell, the City did pretty well while Britain crumbled around it, so I'm sure Wall Street won't mind playing the same role.
But analysts are concerned that Ford relied so heavily on its lending division in the quarter and lost money in its core business: making cars and trucks. . . .
For the second quarter, Ford's net income of $1.17 billion, or 57 cents a share, was up from $417 million, or 22 cents a share, in the period a year earlier. Ford Credit, which offers loans to car buyers, contributed $897 million, more than doubling its profit from a year earlier. Ford Credit is reimbursed by the automotive group for the cost of offering no-interest loans, a situation that benefits the credit division but erodes the auto division's bottom line.