Posted on 10/23/2006 8:02:13 AM PDT by Republicain
DEARBORN, Michigan (AFP) - Struggling US auto giant Ford Motor Co. has posted a mammoth quarterly net loss of 5.8 billion dollars as restructuring costs hammered its earnings.
Ford also spooked investors by revealing it would restate results from 2001 through to this year's third quarter, "to correct the accounting for certain derivative transactions" by its consumer credit division.
Ford's newly appointed chief executive, former Boeing executive Alan Mulally, said Monday the results were "clearly unacceptable" and vowed to make more of the smaller, fuel-efficient vehicles pioneered by Japanese automakers.
Ford's loss for the third quarter ended last month included heavy provisions for its hard-hitting restructuring plan, which foresees plant closures and thousands of job cuts to restore profitability.
With those provisions omitted, its loss came to 1.2 billion dollars, compared to 191 million dollars before exceptional items a year earlier.
That translated into a loss of 62 cents per share, a penny more than Wall Street's average forecast of 61 cents.
The Ford group's turnover in the quarter was down 6.0 percent at 32.6 billion dollars.
Ford said its poor performance in the past three months reflected "operating challenges" in North America, Asia-Pacific and Africa, and its Premier Automotive Group (PAG) division.
"We are committed to dealing decisively with the fundamental business reality that customer demand is shifting to smaller, more efficient vehicles," Mulally said.
"Our focused priorities are to restructure aggressively to operate profitably at lower volumes, and to accelerate the development of new, more efficient vehicles that customers really want."
Like its Detroit rival General Motors, Ford has struggled against an onslaught on its home turf by Asian carmakers led by Japan's Toyota.
At a time of high fuel prices, customers have been shunning the US manufacturers' money-spinning pick-up trucks and sport utility vehicles.
In early trade Monday, Ford's share price was down 1.5 percent at 7.89 dollars.
JPMorgan auto analyst Himanshu Patel said things were likely to get worse at Ford before they get better, describing a "potential for a late-2007 recovery".
The performance of key divisions such as PAG, which includes Jaguar, Volvo, Land Rover and Aston Martin, has also proven disappointing for Ford.
PAG reported a pre-tax loss of 593 million dollars for the third quarter, up from a pre-tax loss of 108 million for the same period in 2005.
Ford said in August it was looking to sell Aston Martin, immortalised by fictional superspy James Bond, saying it wanted to free up resources for its other auto badges.
The divestment would form part of an accelerated restructuring that foresees the closure of 16 facilities in North America and the loss of 45,000 jobs by 2008.
Announcing the earnings recalculation, Ford said that it had discovered that since 2001, certain interest rate swaps conducted by Ford Motor Credit Co. to hedge interest rate risk to the group's debt were accounted incorrectly.
"Our overall hedging strategy is sound," insisted Ford's chief financial officer, Don Leclair.
"We will correct our accounting for these types of derivative instruments. We remain committed to strong internal controls and reporting transparency," he stressed.
Analysts believe meanwhile that Ford could become the next target of alliance talks now that discussions on a global tie-up between GM and Renault-Nissan have failed.
"We have great global assets and resources that we will leverage to significantly improve our product strategy, our production efficiency and quality," Mulally said.
"These actions will lead to profitable growth of our business over the long term."
Oh damn I thought this was about Harold Ford...
I will never buy another Ford vehicle, until
they stop promoting and cultvating the
dead-ender death sex culture that they
have been espousing.
Thanks for putting my husband out of work. Do you realize that all the manufacturers of any product choose to advertise to gays? Your reasoning is hurting a lot of American made products.
Get smart, Ford. If you'd just be more public in your snuggling up to the sodomite market, and create more crappy cars, that'd help you surge right back to your rightful place in the international automobile market.
Might I suggest a new, phalic shaped vehicle called the "Domestic Partnership" where the wheels fall off at high speeds?
Owl_Eagle
If what I just wrote made you sad or angry,
it was probably just a joke.
Actions have consequences.
Do you realize that all the manufacturers of any product choose to advertise to gays?
Yes, but I don't buy KY Jelly, clothes from International Male, vacations to Key West, or AZT. Cars, those I buy.
Don't blame the consumer. Ford has a choice to try and woo the sodomite market and make crappy products. It's not our responsibility to subsidize something that's offensive to us. We already do that with the money the government confiscates from us.
Owl_Eagle
If what I just wrote made you sad or angry,
it was probably just a joke.
i thought the same thing, lol...
It's not, but it's yet another nail in his coffin. It's like having the name Adolf after WW2 got started, or being named Manson. Just not a good association 15 days before the election. The name Ford is firmly associated with bad economic news.
Darn the Karl Rove!
So you are putting your husbands decision to work in an industry that OVER PAYS their workers and over charges for an inferior product, on someone that chooses not to buy something american? If there was pride in the american product they built it would be the best.
Don't guilt people into buying something that is not the best. This industry has been going into the toilet for 20 years, your decision to remain in the industry for your economic security is your decision alone.
Ford 500. Ford Thunderbird. Two near-fatal flops and now, they're closing the Taurus line. The Taurus is still selling. Why quit ?
Out of the several Fords myself and my family have owned, (or driven as company cars), all but two lived up to the "Fix Or Repair Daily" acronym. It's a company that richly deserves to go out of business.
build those SUVs
..............
???how many people want a SUV,
who don't already have one?
or perhaps a demand for used SUVs overseas,
because of a large useful bombload
You call the Thunderbird a "near fatal flop"?
Please explain your thought process behind this, when all evidence says otherwise...
Hey, no problem!
I'm considering a Fusion. They are well built, from my test drive and a decent performance value. But.. They need to be a little bit better if possible. ABS brakes need to be standard and other features as well.
What hatred you spew. We are a Christian, middle-class family, who has been connected to Ford Motor Company for four generations. They have been union and non-union(mostly). My husband takes pride in the vehicles he has worked with, the Ranger, the Explorer, the Sport Trac and now as quality engineer traveling the world. After 27 years he is being sent out to pasture, and at 56 years old will try and find another job. The Bible states: Hate the sin, love the sinner. We will make it, with our faith in God.
Amazing how Toyota never seems to have this problem with cars in America. Unions, over-charging, and over-paying having all but killed any growth by the American car makers.
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