Persistence and innovation seems to be paying off for the Ford Motor Company.

After the dramatic rescue of the financial industry last year, the auto industry descended on Washington to lobby for their own bailout. Through a series of contentious and dramatic hearings on Capitol Hill, the Chairmen of the largest American car companies placed their survival in the hands of the government. Hat in hand, they explained how poor decisions, enormous pension obligations, and foreign competition were driving their companies into bankruptcy. This of course was nothing new for Detroit. For the past three decades a predictable cycle of status-quo engineering and union demands have lead to second, and third, and forth chances to become self-sufficient.

By the end of the negotiations, the government agreed to “rescue” Chrysler and General Motors- providing the financing and regulatory tools to avoid bankruptcy. By doing so, the government became invested in their success and decided to use this new authority to control the business itself. Government Motors was born. This part of the story would have sounded more like breaking news from Venezuela only two years ago, not the United States.

Yet out of this incredible series of events, a new success story is unfolding. Yesterday Ford announced a third-quarter profit of nearly $1 billion which it attributed to cutting costs and focusing on innovation. What makes this news all the more impressive is that Ford was the only one of the big three auto companies that refused the government bailout. As the Wall Street Journal noted, “Ford’s success in North America stemmed in part from the troubles of its two Detroit rivals, General Motors Co. and Chrysler LLC, which were reorganized in bankruptcy court as well as the law of supply and demand. Ford’s ability to decline government aid boosted its image with many American consumers, and its market share increased in the third quarter.”

Even with the government-sponsored “cash for clunkers” program, Ford was able to ramp up its production and provide dealers with ample inventory. GM and Chrysler with tighter inventories were not able to get much out of the program at all. Ford’s CEO noted that they would have been profitable even without the program, as he stated on NBC Nightly News last night, “We have been increasing our share in this down market every month for the last 10 months, and increased--actually increasing our production. So we're on a pretty steady trajectory of growth now.”

The company that was born out of innovation seems to be finding its roots.

Write to tdoheny@afphq.org