Industries Find Surging Profits in Deeper Cuts

“The last thing we’re worried about is when are we going to have to add more capacity, because what we’re really doing is reconfiguring our entire operational system for greater flexibility,” Keith Wandell, the company’s chief executive, said on a conference call with analysts last week.

Getty Images Harley-Davidson motorcycles are displayed inside the Chicago Harley-Davidson in Chicago, Illinois.

Harley’s evolution is part of longer-term shift in American manufacturing, said Rod Lache, an analyst with Deutsche Bank.

At Ford

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[F  Loading...      ()   ], revenue in its North American operations is down by $20 billion since 2005, but instead of a loss like it had that year, the unit is expected to earn more than $5 billion in 2010. In large part, that is because Ford has shrunk its North American work force by nearly 50 percent over the last five years.

“These companies have cracked the code of a successful industrial turnaround,” Mr. Lache said. “They’re shrinking the business to a size that’s defendable, and growing off that lower base.”

To be sure, sales are rising for many companies, albeit at a much slower pace than the increase in profits. Among the 175 companies in the S.& P. 500 that have reported earnings for the second quarter, revenues rose 6.9 percent on average while profits jumped 42.3 percent, according to Thomson Reuters.

Still, even at corporations where both the top and bottom lines are expanding, the focus remains on keeping profits high, not rebuilding work forces decimated by the recession.

When Alcoa reported a turnaround this month in profits and a 22 percent jump in revenue, its chief financial officer, Charles D. McLane Jr., assured investors that it was not eager to recall the 37,000 workers let go since late 2008. “We have a tight focus on spending as market activity increases, operating more effectively and minimizing rehires where possible,” he said. “We’re not only holding headcount levels, but are also driving restructuring this quarter that will result in further reductions.”

Michael E. Belwood, a spokesman for Alcoa, said more than 17,500 of the former workers were employed at units Alcoa has since sold, but added that the company “had to be resized to match the realities of the recession.”

“We’re keeping a close eye on costs because there is still uncertainty about the stability of this recovery,” he said.