Alisa Priddle

Detroit Free Press

Ford reported a strong enough fourth-quarter and full-year profit to trigger record $9,300 profit-sharing checks for about 52,700 UAW workers.

The company made money in every region except South America, with new records in North America and Asia Pacific. Europe is back in the black for the first time since 2011.

"We promised a breakthrough year in 2015, and we delivered," said CEO Mark Fields.

The results were not surprising, as Fields announced this month that an accounting change that reduces pension costs would result in higher earnings than expected, which would trigger larger profit-sharing checks.

The automaker Thursday reported net income of $1.9 billion in the fourth quarter and $7.4 billion for the year. Revenue was $40.3 billion for the quarter and $149.6 billion for the year.

Pretax profit in the final three months was $2.6 billion, contributing to $10.8 billion for the year.

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Big profit-sharing checks

Ford — $9,300 — The key figure this year for Ford for autoworkers is the $9.3-billion pretax profit earned in North America because the profit-sharing formula, negotiated with the UAW, awards $1 for each $1 million in North American profit. That makes it $9,300 for eligible employees, before taxes, compared with checks up to $6,900 earned in 2014. The previous record was $8,800 based based on 2013 results.

Upon ratification of the new UAW contract in the fall, Ford gave workers a $1,500 prepayment. They will get the remaining $7,800 in mid-March.

"There is a real excitement in the air. People are very excited," said Nick Kottalis, plant chairman of the Dearborn Truck Plant, part of UAW Local 600. Three people had already told him they would use the money as a down payment on a house, 10 were planning to purchase a new vehicle, others were planning cruises and a number had given him money to donate to the Flint water crisis because they know he is a native of the city.

Chief Financial Officer Bob Shanks said Ford put $600 million in charges on the books in the quarter to cover the extra costs associated with the new contract. More charges will show up over the course of the year as further payouts are made.

Fiat Chrysler Automobiles — $4,000 — said Wednesday its U.S. hourly workers will receive profit-sharing checks on Feb. 19. The payment will be 45% higher than the $2,750 UAW-represented employees received last year and is the highest amount since 1999 for Chrysler workers.

General Motors will report its earnings and the amount of its profit-sharing checks on Wednesday.

The profit sharing numbers follow a year of historic sales for the U.S. automotive industry. FCA said its NAFTA region earned a pretax profit of $4.8 billion (4.4 billion euro) and sales of cars and trucks increased 9% to 2.7 million vehicles.

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Ford flying high

The financial results beat Wall Street estimates for the quarter, as well as for the full year.

But even though Ford is fresh off its best sales year since 2000 and is working to reinvent itself as a technology company as well as an automaker, its stock has fallen about 20% over the last year and is down roughly that amount so far in 2016.

Earlier this month, Morgan Stanley analyst Adam Jonas told a Detroit audience that he advises investors to sell when it comes to Ford. He said there is little love for the automaker on Wall Street because there is not a positive future for traditional car companies in today's world, where ride-sharing and autonomous driving will play key roles.

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Shares closed at $11.71 Thursday, down 1.2%, showing that record profits fail to impress Wall Street.

Shanks said he thinks the market is concerned about the global economy but the auto industry is somewhat immune because it has plateaued at such a high level in North America. He also said he does not see sales or profit margins falling off through 2018. "I don't see that we're at the peak and ready to fall over," he said, given low oil prices and interest rates and strong housing starts expected to continue to spur strong truck sales.

And when the inevitable downturn does come, "we have a strong robust structure" in place. "We'll be ready."

Shanks is also buoyed by the fact that an increasing amount of the profits is coming from outside North America.

Earlier this year, Ford said it would pay shareholders a first-quarter dividend of 15 cents per share and provide an additional 25 cents per share to stakeholders of record on Friday as part of a $1-billion supplemental cash dividend.

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The record pretax profit came with strong sales of profitable pickups and utility vehicles in a year marked by a stronger economy and low gas prices. Ford expects 2016 to be as strong or better.

"We are benefiting from the big bet we made on F-150," Shanks said of the investment to switch from steel to an aluminum-bodied truck that is lighter and more fuel efficient.

North America is still the profit driver and did not let up in the fourth quarter, with earnings of $2 billion contributing to the year's $9.3-billion total — up 26% from last year — and a profit margin of 8.2% for the quarter and 10.2% for the year. Shanks said Ford has had margins over 10% for three of the last four years, making it a benchmark in the industry.

The company made money in Europe for the first time in four years, reporting profits of $131 million for the fourth quarter and $259 million for the full year. "Getting profitable in Europe is just the first step," Fields said, as the company continues to expand its lineup and address concerns in Russia.

Asia Pacific earned $444 million in the final quarter and a record $765 million for the full year.

Middle East and Africa earned $13 million in the quarter and $31 million for the year.

South America remains a trouble spot. Ford lost $295 million for the quarter and lost $832 million for the full year. Brazil almost single-handedly accounts for the loss as the country could be entering its worst depression since the early 1800s, Shanks said.

Ford Credit reported a pretax profit of $2.1 billion in 2015, including $556 million in the fourth quarter. It will be as strong or better in 2016, Shanks said.

Contact Alisa Priddle: 313-222-5394 or apriddle@freepress.com. Follow her on Twitter @AlisaPriddle.