Ford May Report Worst Loss in History

ap ^ | 1/24/07 | Tom Krisher, AP Business Writer

[Flavius]

DETROIT (AP) -- Ford Motor Co. could post the worst annual loss in its storied 103-year history when the automaker releases its 2006 earnings on Thursday.

The old record net loss was $7.39 billion in 1992, but through three quarters of this year, Ford already had lost $7 billion.

Fourteen analysts polled by Thomson Financial expect more red ink in the fourth quarter, predicting an average quarterly loss of $1.01 per share and $1.35 per share for the year, excluding special items.

"The fourth quarter's going to look real ugly," said Erich Merkle, director of forecasting for the auto consulting company IRN Inc. in Grand Rapids, Mich. He predicted Ford would get as much bad news out of the way as it can for the end of 2006, beating the 1992 record.

"Let's just air all our dirty laundry all at once. Take the medicine and then we can move on. I definitely think that's their philosophy, knowing it's going to be real poor," Merkle said.

Burnham Securities analyst David Healy said in a note to investors that Ford has yet to recover from its finances being wrecked by collapsing sales of its F-series pickup trucks and truck-based sport utility vehicles.

The company made a profit of $1.44 billion in 2005, and in the fourth quarter of that year, it produced and shipped 355,000 of the high-profit large and mid-sized truck models, Healy said. That dropped by 40 percent to 213,000 in the final quarter of last year, he said.

"In our view, most of the year-to-year increase in losses lies in the 142,000 year-to-year decline in these high-profit models," Healy said.

Production of other Ford models dropped by 53,000 in the fourth quarter of last year compared to the last quarter of 2005, driven by dealer stock reductions and the company's strategy to reduce traditional low-profit sales to rental car companies, Healy said.

Efraim Levy, senior industry analyst for Standard & Poor's, predicted Ford would post a $2 billion net loss for the last quarter of 2006.

Like other analysts, he sees bottom-line improvement in 2007 even though he predicts revenues will drop by 7 percent compared to 2006. He still sees a loss for this year, but said the improvement will come as Ford becomes more efficient and cuts costs by slicing its blue- and white-collar work forces.

About 38,000 hourly workers have signed up for buyout or early retirement offers from the company, and Ford plans to cut its white-collar work force by 14,000 with buyouts and early retirements.

The company has mortgaged its assets to borrow up to $23.4 billion to fund a massive restructuring plan and cover billions in losses expected until 2009. It expects to burn up $17 billion in cash during the next two years before returning to profitability.

Ford's revenue will continue to suffer in 2007 from intense competition, an expected lower overall auto market and weakness in Ford's financial services business, Levy said.

Ford has rolled out or will introduce several new or updated products during 2007, including the Edge crossover, new F-series Super Duty pickups, a redesigned Focus small car and an updated Five Hundred larger sedan.

But Levy said the company's new vehicles won't be strong enough for it to recover much this year.

"The new products aren't that exciting overall," he said.

Ford's sales last year were 8 percent below 2005 figures at about 2.9 million vehicles. Ford attributed the decline to a drop in truck and sport utility vehicle sales and the end of production for the Taurus sedan, which largely was sold to fleet buyers last year.

Ford is the first of the Detroit-area automakers to release its earnings for the year. General Motors Corp., which lost more than $3 billion in the first nine months of last year, will release its fourth-quarter and annual earnings on Tuesday.

DaimlerChrysler AG, which lost $1.5 billion in the third quarter, is to release its earnings on Feb. 14.

Ford Motor Co.: http://www.ford.com

[capitalist229]

We got a BRAND NEW loss-leader Ford Focus for just under $10k. A similarly equipped Toyota Corolla was $14000, and the Civic was about $16500.

You got what you paid for.

BUMP

[eraser2005]

BTW - they are not "my" vehicles in any sense of the word.

So what does AFA say Ford is actually doing anymore that every other car company isn't? Can you name one thing?

[eraser2005]

Yes. A 4 door compact sedan, and a very reliable one at that...

You don't have to pay $20k for a new Civic to get a reliable vehicle. You're better off not paying that much, as the new Civic doesn't match the Mazda3 for reliability, even though the Mazda is thousands less. Oh, and the Focus has the same powertrain as the Mazda3.

[xzins]

AFA website on the Ford Boycott is:

http://www.boycottford.com/

[eraser2005]

A good portion of the AFA stuff is two years or more out of date.

I ask again - do you have ANY evidence that they have done anything that every other company does not?

[xzins]

Two years or more....only if this past December is 2 years ago. (One month ago.)

Donald E. Wildmon Founder and Chairman

December 27, 2006 New: Update on Ford Boycott Loses sales ... begins supporting another homosexual magazine ... refuses to stay neutral ... sponsors 'Two and a Half Men' ... urges support of homosexual marriage, stem cell research, and abortion The boycott of Ford Motor Company is beginning to take effect. In November, Ford sales were down 9.7%. General Motors showed a 6.1% increase during the same month while Chrysler sales were up 4.7%. In seven of the nine months since AFA began the boycott, because of the motor company's support for the homosexual agenda - including homosexual marriage, Ford's sales have gone down compared to a year ago. Ford has long supported the homosexual magazine, The Advocate. Now, Ford has expanded their promotion of homosexual publications by supporting the homosexual publication Out through advertising. Wal-Mart recently announced they would no longer support or oppose controversial issues. Ford originally made a similar pledge to AFA but reneged when a small group of homosexual leaders demanded retraction, despite the fact that not a single homosexual group has publicly supported Ford. Ford was a sponsor of a recent episode of CBS's program "Two and a Half Men" in which actor Charlie Sheen's character mocked Christ, Christmas and Christians by singing a sordid sex song to the tune of "Joy To The World." During the recent elections, Ford pointed their employees to a radical left wing online voter guide for information on how to vote. The website that contained the guide urged votes against constitutional amendments banning homosexual marriage, for stem cell research in Missouri and against an amendment banning abortion in South Dakota. Take Action 1. If you have not already done so, click here to sign the Boycott Ford Pledge. More than 625,000 have already signed the pledge. For a history of the boycott, visit www.BoycottFord.com. 2. Click here to send an email to new Ford CEO Alan R. Mulally letting him know you are participating in the boycott. 3. Forward this email to your friends and family who may not be aware of Ford's support for the homosexual agenda. 4. Click here to print and distribute the Boycott Ford Petition.   American Family Association | P O Drawer 2440 | Tupelo, MS 38803 | 1-662-844-5036 Copyright 2006 All Rights Reserved

[eraser2005]

Geez... you actually believe the ramblings of Wildmon? Do you really believe the lunatic is even partially sane?

What color is the sky in your world?

[eraser2005]

I'll ask you one final time - what exactly does Ford do that EVERY SINGLE OTHER AUTOMOTIVE MANUFACTURER DOES NOT?

The answer is NOTHING! Toyota advertises in the same magazines, but do you acknowledge this? The sponsor "The 9th Annual GLBT MBA Conference", but do you acknowledge this?

The fact is over half the stuff AFA has up is ads or other items from 2 or more years ago.

Believe the crackpots if you like, but some of us live among the sane.

[xzins]

You said everything on his website was 2 years old.

One link clearly said it was a month old.

Ad hominem's against Wildmon are not in order until you explain that.

[eraser2005]

Are you blind as well as stupid?

"A good portion of the AFA stuff is two years or more out of date. "

[xzins]

It's the misrepresentation of the site that's the issue.

Can you address that, knowing that the aforementioned update was present?

[eraser2005]

What part of A GOOD PORTION is not making it into your feeble brain?

[xzins]

You don't seem to understand the meaning of UPDATE, do you?

You've misrepresented the site, engaged in personal attacks against me and Wildmon, and are getting a bit shrill?

Are you able to handle such a discussion as this? You seem distraught.

[Old_Mil]

Ford's death spiral will be interesting to watch.

[Old_Mil]

You've been promoting Ford heavily on this thread. Do you work for them? Or are you gay?

[Torie]

The WSJ says Ford projects another 17 billion or something in losses over the next two or three years, as it "restructures."

"For Ford, the pain looks even further from over. Despite a strong U.S. economy, Ford expects to burn through another $17 billion in the next three years as it shrinks its North American operations to adjust to lower sales."

Ford seems even more sluggish than the Feds in reacting to events. It has a serious case of the slows. And analysts don't see any new exciting Ford car products on the horizons. Its best strategy might be too go into the liquidation mode for its shareholders. But of course that won't happen.

[Torie]

The Bush health care package is in part an auto industry health care cost bailout, so says the WSJ. But the Bush plan won't pass.

[xzins]

If Ford would change a few things, they'd be fine.

1. Become neutral in their treatment of political and social concerns in the nation. It's insane to intentionally insult a huge portion of their customer base.

2. Lower their prices to match their quality and the prices of other cars on the road.

3. Extend their warranties to match Kia/Hyundai/GM.

[eraser2005]

How on earth have I misrepresented the site?

Look at the actual accusations against Ford on the site rather than Wildmon's spin.

You have advertising on TV shows that, yes, are questionable, but also receive advertising from EVERY other automaker. The companies do NOT get to review the shows ahead of time.

Under the rotating ads (half of which date from 2004 or earlier) you have accusations which date from 2004, 2004, 2004, 2004, ?, ?, 2004, 1999, etc...

Look at the other things which have dates. The majority are 1999-2004. NONE of these are any difference than Toyota advertising during "Three and a Half Men" or being a sponsor of the Reaching Out MBA Conference.

As I said, "A good portion" (in fact a MAJORITY) of the accusations are based on events from 2 or more years ago and surround activities no different than those undertaken by every other manufacturer.

If you want to boycott, feel free. But think for yourself, and stop licking Wildmon's shoes.

I am sick and tired of people calling themselves christians and spreading lies and half-truths.

[eraser2005]

Neither.