That time may soon be at hand.
Posted on 01/24/2007 5:37:16 PM PST by 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
Crossovers = MMV ( MetroSexual Mini Vans)
I have an F-250 Super Duty 4WD that got so big you will blush just by sitting next to me:):) It also makes bigger noises than you can. Would you like to get worked up and have a little fun?:):)
That time may soon be at hand.
"UNION workers and pension plans."
True but it goes much deeper than that. Ford drove away generations of loyal customers by putting out cars that didn't drive as well and were less reliable than the Japanese. Now those costumers are loyal to brands like Honda and Toyota. In order to win them back, Ford has to put out cars in mainstream segments that aren't just as good as Hondas and Toyota but better. They haven't done that. The Mustang is nice but it isn't exactly in a real high volume segment and cars like the new 500 are real yawners.
What has kept Ford afloat lately has been SUV sales. Those are falling off too as Japanese companies put out cars in that segment that are much more innovative and drive better than the stodgy Ford Explorer and Expedition and as some shoppers are getting tired of the fuel bills associated with the vehicles and switching segments.
I thought Ford died last month ?
Ford maybe. I have my doubts about GM. But Ford is going to have to sell some stuff off and go back to what made them big in the first place. Building high quality cars that the average family can afford.
GM is starting to come back. It's new pickup trucks are hot and the 2008 Malibu is supposed to be dynamite.
"the jag looks like ford Taurus with 20 cent more expensive head lights"
...and a cat glued on the hood!
thankfully it seems im not the only one
That's not a truck for farmers, hunters and contractors. That's a suburban vehicle. Strictly hwy, nothing else.
Fix Or Repair Daily!
my GMC Yukon is awsome
in 6 years omly had to replace a pin valve in the air conditioning unit
No, you're wrong. So there.
Hey, this bald statement stuff is easy!
"That's not a truck for farmers, hunters and contractors. That's a suburban vehicle. Strictly hwy, nothing else.
"
If done right it isn't. I've owned big American trucks and they don't come close to matching the toughness of my old Toyota FJ40 or the T100 I used to own. Those things could take some serious abuse and the FJ could get into some really tough country. I have full confidence that Toyota could make a big truck that matches the American companies for capability and blows them away in terms of durability.
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