April 26, 2011 / 4:02 PM / 7 years ago

UPDATE 6-Ford posts best first-quarter profit in 13 years

UAW ON MULALLY PAY

One of the challenges in 2011 is labor talks with the United Auto Workers. Mulally’s $26.5 million compensation for 2010 has angered UAW President Bob King, who said on Tuesday that Mulally’s compensation would make those talks “more difficult.”

“I think Alan Mulally is a good CEO,” King said, but added that he thought Mulally “has a blind spot” to the harm his compensation does to morale of salaried and hourly workers.

Asked recently about his pay, Mulally said Ford rightfully ties his compensation to company performance.

J.P. Morgan analyst Himanshu Patel pointed in a research note to stronger-than-expected results at Ford Credit, which he called “unsustainable.”

Ford Credit earned $713 million in the first quarter on a pretax basis. Patel had expected $428 million and credited stronger-than-expected performance on lease residuals.

Ford regained its footing in Europe in the first quarter, showing a pretax operating profit of $293 million, up from $107 million a year ago. In the fourth quarter, Ford had a loss of $51 million in Europe.

The company also reduced its debt by $2.5 billion in the quarter to $16.6 billion by redeeming all its outstanding preferred securities. Ford had borrowed $23 billion in late 2006, raising investor concerns about its debt levels. (Reporting by Bernie Woodall and Ben Klayman; Editing by Derek Caney and Matthew Lewis)

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