Ford surprised a lot of people, probably no set more than the White House, in posting a quarterly profit of over $2 billion.  The automaker, who eschewed a government bailout, credited better products and management for ending four quarters of losses.  They also grew their market share and lowered their debt load in the middle of the worst recession in decades:

In recent months, the carmaker has claimed market share from its American rivals, General Motors and Chrysler, while those companies struggled to restructure their operations in bankruptcy court.

Ford executives now say the automaker is on track to return to annual profitability in 2011. …

Ford’s gains were aided by rapid cost cutting in the second quarter. Ford reduced its debt obligations by $10.1 billion, which will save the company more than $500 million a year in interest expense. It raised $1.6 billion by issuing common stock. The company said it also cut “structural” costs by $1.8 billion, in part by eliminating 1,000 U.S. hourly jobs through buyouts. …

Under Mulally, Ford appears to be building better cars and trucks, analysts said. The Ford Fiesta, which launches in the United States next year, is now Europe’s second-best-selling car.

That doesn’t mean that Ford is out of the woods, but they’re doing a far sight better than Government Motors and Chrysler.  Instead of delaying inevitable tough decisions by taking a handout from either the Bush or Obama administrations, Ford went to work on the structural problems that had them on the brink of oblivion.    Their turnaround showed that hardnosed cost-cutting and product improvements could rescue a company, rather than a Deus ex machina bailout that would have maintained a sclerotic status quo.

Mullaly also had bad news for the White House in its forecast.  He told analysts that Ford expected the economy to improve a little at the end of the year, but nowhere near earlier forecasts.  If Mullaly is right, the Obama administration will have to deal with much higher deficits than first forecasted — and its investment in Ford’s competition may wind up for naught.