Ford Motor Co. posted net income of $2.7 billion last year compared with a $14.8 billion loss in 2008, despite a $20 billion drop in revenue to $118 billion. Ford credits the improved earnings to a $2,060 year-over-year increase in revenue per vehicle, strong results at its finance arm and $5.1 billion in cost savings.

The company also benefited from $2.6 billion in pre-tax special items vs. a $7.6 billion charge in 2008. Pre-tax operating profit, excluding one-time items, was $454 million vs. a $6.9 billion year-earlier loss. The annual earnings mean Ford will pay its U.S. hourly workers about $450 per person in profit sharing.

Ford also offered its first forecast for 2010 results. The company now expects its North American and automotive units and the whole company to be profitable this year on a pre-tax basis, excluding special items. It cautions that the profit will probably be smaller than last year’s. Ford also predicts positive automotive cash flow this year and plans to boost capital spending by $1 billion to a range of $4.5 billion-$5 billion.

Ford generated positive cash flow of $3.1 billion in the fourth quarter and $300 million for the full year, after burning $18.9 billion of cash in 2008. The company ended the year with $25.5 billion in automotive cash vs. $13.4 billion at the end of 2008. Ford’s automotive debt, which excludes its finance arm, totals $34.3 billion. The company says it is working to shore up its “uncompetitive” balance sheet.

For the full year, Ford’s auto operations lost $1.4 billion on a pre-tax operating basis vs. $6.4 billion in 2008. Ford Motor Credit Co. recorded $1.3 billion of net income, reversing a $1.5 billion year-earlier loss, as resale values of leased vehicles improved and provisions for credit losses declined.

In the fourth quarter of 2009, Ford earned $868 million compared with a $6 billion loss a year earlier, boosted by an increase in demand. Revenue grew 22% to $35.4 billion as volume increased 26% to 1.4 million vehicles worldwide.

For the quarter, auto operations posted a $1.1 billion pre-tax operating profit compared with a year-earlier loss of $3.3 billion, as all regions reported profits on that basis. North American operations swung to a $707 million profit for the period from a $1.9 billion loss a year earlier. Quarterly sales in the region jumped 40% to $15.8 billion.

In Europe, Ford posted a $305 million quarterly operating profit compared to a $338 million loss, as revenue increased 14% to $8.7 billion. Volvo Cars, which Ford aims to sell this year, shrunk its quarterly operating loss to $32 million from $736 million on an 18% sales increase to $3.9 billion.

Ford’s South American unit more than tripled its operating profit to $369 million from October through December as sales surged 53% to $2.6 billion. Asia Pacific operations recorded a $19 million operating profit for the period vs. a year-earlier loss of $208 million, as sales increased 14% to $1.6 billion.

Toyota Motor Corp. has found a remedy for defective accelerator pedals that forced it to recall 2.3 million vehicles last week, according to news reports.

Those reports cite unidentified sources who say the company proposes inserting a metal spacer into the pedal assembly to reduce friction and ensure that the pedal returns to the idle position when the driver releases pressure on it.

Toyota has cautioned that it could still take several months to fix all 2.3 million vehicles once a remedy is found. The company must test any new part and get approval for the fix from the National Highway Traffic Safety Administration. This is followed by production of the new parts and distribution to dealers, who would then need time to make the repairs.

The company also could resume production of the eight recalled models soon, although it has not yet provided a timetable. Toyota and its pedal supplier, Elkhart, Ind.-based CTS Corp., say they have already engineered and tested a modified pedal that will avoid sticking problems in future vehicles. CTS says it has three factories producing a redesigned pedal, and Toyota says shipments of the redesigned parts are beginning to arrive at its assembly plants.

This action is separate from another Toyota recall of 5.35 million vehicles in the U.S. for modifications to keep floor mats from jamming throttle pedals in the open position. Dealers have begun those recall repairs, which include replacing the mats, modifying pedals and removing some floor padding.

The U.S. House of Representatives’ Energy and Commerce subcommittee has scheduled hearings for Feb. 25 on Toyota Motor Corp.’s recalls of vehicles with accelerator pedal problems and the National Highway Traffic Safety Administration’s response.

Some consumer advocates say safety regulators and the company were slow to identify the problem and issue recall notices. Congress also seeks an assessment of how NHTSA’s TREAD early-warning system is performing. The statistical analysis program was created after manufacturers and regulators failed to notice a pattern of tread separations in Firestone tires and the resulting rollovers of Ford Explorer SUVs that led to massive recalls in 2000-2001.

Transportation Secretary Ray LaHood says Toyota and NHTSA have acted responsibly in dealing with the recalls. NHTSA has said it prodded Toyota to halt sales of the eight models involved in a recall of 2.3 million vehicles announced last week. The agency says defective throttle pedals that are prone to sticking created a “serious safety issue.” The company has said its action was motivated by concern for its customers, but it admits it was required by law to suspend sales of those vehicles.

Toyota also has recalled 5.35 million vehicles in the U.S. for problems with floor mats that can jam throttle pedals in the open position. That recall, first announced in September 2009, follows another two years earlier of 55,000 Camry and Lexus ES 350 sedans from the 2007-2008 model years for the same problem.

Allegations by critics are muddied by assertions about previous “sudden acceleration” reports involving Toyota models. Neither of the two recent recalls involves sudden acceleration. All the reports involve vehicles that were difficult to slow or stop after normal intentional acceleration.

Toyota owners have filed four lawsuits seeking class action status in U.S. federal courts since November, says Bloomberg News. Plaintiffs in California, Florida and West Virginia blame the alleged unintended acceleration of their vehicles on the electronic throttle control system. The news service also cites five lawsuits filed by individuals attributing deaths or injuries to the problem. It is unclear whether any or all of the cases involve vehicles with throttles stuck in the open position.

Toyota Motor Corp.’s recalls of vehicles with defective throttle pedals that can stick in the open position expanded to China and Europe yesterday, widening the scope of the company’s problems.

Toyota’s joint venture with FAW Group Corp. will recall 75,600 RAV4 small crossover vehicles in China next month, according to China’s General Administration of Quality Supervision, Inspection and Quarantine. The affected vehicles were built since March 2009.

Toyota says it has not yet determined which models will be recalled in Europe or how many vehicles will be involved. News reports estimate the recall will cover 2 million vehicles. The company says it has already made changes in its European assembly plants, so it won’t need to suspend production there, as it was forced to do in the U.S.

This week Toyota also recalled more than 270,000 vehicles in Canada, citing eight models that could be equipped with sticking accelerator pedals. Safety watchdog Transport Canada says it has received five complaints about the problem.

The recalls have not affected Toyota in Japan, where models involved in recalls elsewhere are equipped with throttle pedals made by Denso Corp. The company says there have been no problems with those pedals.

Separately, the company said late last year it would recall 209,000 vehicles in Canada because of floor mats that can jam throttle pedals in the open position. South Korea’s transportation authorities say they have opened an investigation into the floor mat-related problem.

Air bag supplier Autoliv Inc. says it has agreed to buy most of Delphi Corp.’s occupant protection systems business in China and South Korea for an undisclosed price. The deal is expected to close by March 31.

With the purchase, Stockholm-based Autoliv will have acquired virtually all of Delphi’s occupant protection system units worldwide. Delphi said last year it aimed to sell those operations, which make seat belts, air bags and steering wheel components, by year-end.

Autoliv announced two deals late last year to buy Delphi’s passive safety operations in Europe and North America. The three units are expected to generate combined sales of about $400 million this year.

General Motors Co. says it intends to sell 1 million Chevrolet vehicles per year in Europe within five years, up from 426,000 units last year.

Chevrolet Europe President Wayne Brannon tells reporters that new models such as the Cruze small car and Volt plug-in sedan will boost volume in the next few years. Chevy’s sales in the region slid 16% last year as gains in western Europe were more than offset by a 50% plunge in Russia, where the auto market declined by a similar amount.

GM officials said earlier this month that Chevy’s overseas sales would overtake domestic volume within a few years, fueled largely by growth in Brazil and China.

Analysts are already seeing signs that some car buyers are steering clear of Toyota Motor Corp. since its recall last week of 2.3 million vehicles with defective throttle pedals and its subsequent suspension of sales and production of the eight affected models.

Online auto data provider Edmunds.com says the percentage of car buyers intending to purchase a Toyota model fell three points to 10% on Wednesday, the day after the company announced the sales freeze. Edmunds, whose estimates are based on traffic on its Web site, says interest in General Motors and Honda each rose by one point that day to 15% and 12%, respectively.

U.S. dealers who sell Toyota brand vehicles could miss out on as much as $2.47 billion in combined monthly revenue while sales of the eight models are stopped, according to Bloomberg News. The news service cites an estimate from the National Automobile Dealers Assn. that includes sales of new and used vehicles involved in the recall. The affected models accounted for two-thirds of those dealers’ new vehicle volume last year.

The production and sales halt could cost Toyota as much as $1.1 billion of operating profit per month, Bloomberg reports, citing Tokyo-based Advanced Research Japan. The news service also cites

IHS Global Insight, which estimates Toyota will lose 20,000 vehicle sales per week during the sales freeze.

Investors also have become wary about the recall fallout. Toyota’s shares have fallen 15% on the Tokyo Stock Exchange since the second pedal recall was announced late last week to close at $39.58 yesterday.

Ford Motor Co. says that only 300 of its 41,000 U.S. hourly workers accepted an early retirement or buyout under an offer that expired a week ago.

The company says the acceptance rate was in line with its expectations, based on Ford’s improving performance and a nascent economic recovery. About 800 workers took similar buyouts last year.

Ford was offering as much as $70,000 in cash or $50,000 plus a $25,000 vehicle voucher. Those who accepted will leave between Feb. 1 and March 1.

Ford Motor Co. says it has halted production of diesel-powered Transit fullsize commercial vans in China because the vehicles use an accelerator pedal made by the same supplier involved in Toyota Motor Co.’s recall of 2.3 million vehicles in the U.S.

Ford says its joint venture with Jiangling Motors Corp. has built fewer than 1,700 of those vans since it began using pedals made by Elkhart, Ind.-based CTS Corp. in December. CTS says it supplies different accelerator pedals to Ford and Toyota. Ford and Jiangling say they have received no reports of drivers having trouble stopping the vans.

CTS also supplies pedals to Chrysler, Honda, Nissan and Mitsubishi. But it says those components aren’t the same as Toyota’s because they are made to an individual company’s specifications.

Tata Motors Ltd. is poised to hire Carl-Peter Forster, who stepped down as president of General Motors Corp.’s European unit in November, as its new chief, according to Wirtschaftswoche.

The German newspaper, which does not cite its sources, says Forster would be in charge of Tata’s passenger and commercial vehicle operations. He would succeed Ratan Tata, who also heads conglomerate Tata Group. Tata announced last year that he plans to retire.

Forster supported a plan to sell GM’s Opel unit to Canada’s Magna International Inc. and Russia’s OAO Sberbank, and left after GM decided to keep Opel instead. Since then, he has been rumored to be a candidate for several top auto industry posts, including the top job at Tata’s Jaguar Land Rover unit.