American auto maker Ford Motor (NYSE: F) gave investors a reason to smile this morning when it posted a surprising $1 billion profit for its third quarter.

Going into this morning's earnings release, analysts had expected to see the Dearborn, Michigan-based auto manufacturer to lose 12 cents per share. But Ford had other ideas, posting a profit of 29 cents per share, or $997 million.

It's going to get worse before it gets better, according to Stone & McCarthy Research. Early 2010 has "the more troublesome outlook," as the economy will have to walk on its own, the research firm says. This year, it's had a pair of crutches: tax credits for first-time home buyers and the cash-for-clunkers program. So, if the stimulus hasn't taken hold by the end of the year, the first quarter could be a bruiser.

The firm adds that "continued growth in aggregate demand" is needed, bringing the discussion back to consumer spending . . . which is where it will always land. We're likely to see the 3.2% growth rate from July through September drop to 2.4% at the end of the year because the crutches will have been gone. And, let's not forget that unemployment is expected to break the 10% level next year.

It should not come as too big of a surprise, but American auto maker Ford Motor (NYSE: F) announced today that its sales fell by 5.1% in September.

Following this summer's widely popular "cash for clunkers" program, it was some what expected that demand would weaken during September as so many people had just recently purchased new cars to take advantage of the government program.

The past couple of months there has been a lot of news over the government's recent "cash for clunkers" program, which was wildly more successful than anyone could have imagined, but left dealer lots short on inventory. General Motors dealers are still dealing with low inventory and have requested more cars to meet recent demand.

According to the Detroit News, General Motors dealers have requested that the company ship as much as four times as many cars as the company had planned to build in October.

The United States Department of Transportation is mobilizing its forces to try to process the paperwork for the $3 billion Cash for Clunkers program by the end of the month.

Less than 20% of the rebate applications have been approved so far -- but only because of bureaucratic incompetence and mismanagement. According (subscription required) to The Wall Street Journal, "The administration has begun "a government-wide mobilization of employees" and intends to finish processing rebates by Sept. 30, according to a DOT official."

It should not come as any surprise, but Ford Motor Company (NYSE: F) announced today that August saw an industry wide increase in auto sales.

Of course, the increase in sales can be attributed to the highly popular "cash for clunkers" program that brought auto buyers out in huge numbers. The August increase is the first time auto sales have moved higher in over 2 years.

Today was one of those directionless trading days after so many gains that there was absolutely no way to know if the markets would be up or down until the last few seconds of the day. We had a very strong durable goods reading for July and even home sales figures remained high.

Here were today's closing bell levels:

Dow 9,543.52 +4.23 (0.04%)
S&P 500 1,028.12 +0.12 (0.01%)
Nasdaq 2,024.43 +0.20 (0.01%)

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Now that Cash For Clunkers is over, the auto industry has a problem: Where will car sales come from now?

Everyone who had an old car and wanted a new one took advantage of the Cash For Clunkers plan -- who is going to go buy a new car the day after the government stopped paying people $4,500 to buy cars?

J.D. Power and Associates reduced its 2010 sales forecast to 11.5 million units from 11.6 million -- citing the impact of Cash For Clunkers. In other words, a big part of what Cash For Clunkers did was borrow sales from the future and front-load them, and now there's nowhere to go for car sales now.

With Cash for Clunkers set to end on Monday because all the money has been spent, pundits and politicians are applauding the program as a great success.

Transportation Secretary Ray LaHood said the program has been "a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work." He added that his department was "working toward an orderly wind down of this very popular program."

If you are getting tired of reading all the news on the government's "cash for clunkers" program, don't worry... the Obama administration announced this afternoon that the popular incentive program will come to an end this Monday.

There has been a lot of controversy over the program as of late, but one thing is for sure, car buyers have definitely been taking advantage of the program since it launched last month.

As we noted yesterday, a lot of auto dealers have decided to pull out of the popular "cash for clunkers" program. This comes as a result of lack of payment by the government, and today General Motors said that it will start to advance dealers the cash that they are due from the government related to the program.

Today's announcement by General Motors marks a change in company policy, which had earlier stated that it was not in a position to come to the aid of its dealers.

Everyone knew that the government's "cash for clunkers" program would be enticing to potential auto buyers, but no one, including the U.S. government could have predicted just how popular the program would be.

Auto makers and dealers have seen a vast response to the program, but now some dealers are starting to wonder when the government is going to keep its end of the deal, and have decided to remove themselves from the popular program.

The government's "cash for clunkers" has been far more popular than anyone thought, prompting General Motors to boost production at several factories to keep up with demand.

While not everyone is so convinced that the "cash for clunkers" program is good for the economy, there is no doubt that the big American car makers are enjoying the benefits. Five days ago I wrote about the decision by Ford Motor Company (NYSE: F) to boost production by 15% above its prior estimates, and today General Motors announced it will raising output and bringing back employees that it had been forced to lay off.

With so many people rushing out to take advantage of the "cash for clunkers" program, American auto maker Ford Motor (NYSE: F) has announced that it will be significantly boosting fourth quarter production.

There has been a lot of debate over whether or not the "cash for clunkers" program is good for the economy, but there is little debate as to its popularity. The program offers up to a $4,500 incentive for people exchanging their old gas guzzlers in for newer, more fuel efficient vehicles, and has been much more popular than anyone could have imagined.

Late Thursday night Congress approved another $2 billion for the "cash for clunkers" program.

On the Democratic side, Senator Debbie Stabenow of Michigan said: "The reality is this is a program that has been working. Consumers believe it's working. People who make steel and aluminum and advertisers -- and everyone who's involved in the larger economic impact of the auto industry -- believe it is working."

On the Republican side, Senator Judd Gregg of New Hampshire said: "What we are doing is creating debt -- The bill to pay for those cars is going to come due on our children and grandchildren."