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
LOL! Fine. You don't mind if it get's scratched up and muddy do ya? Let's go for a ride.
She's a beaut.
"Why they can't be profitable with their truck line and the legendary Mustang is beyond me."
One of the big answers to your question about the trucks is the 6.0L Power-puke diesel engine. The thing is a piece of garbage from International. Between 2003 and last year Ford was paying out HUGE sums of $$$ replacing engins and Lemon-Lawing tons of the "Super Duty" trucks.
Ford lost a lot of loyal customer because of this junk engine ... now look at their new 6.4L Power-joke engine from International (twin turbo, have to remove the entire cab to work on the engine). This new engine too will turn into a nightmare.
Go CUMMINS DIESEL POWER!!!!!
The older Fjs were expensive, but fine. The newer ones are too expensive and prissy. They're for suburban mom's. The t100 is too underpowered and couldn't compete with F150s and Rams. GMs trucks are junk. The toughness of an American truck like an Fseries, just depends on the options.
nothing,
well nothing for GM and Ford upper management which is cool
recently there was an attempt to dump health care (not sure on pensions) onto the Joe Sixpack taxpayer via them marching onto the hill
hence by declaring bankruptcy, the big 3 can get rid of their albatross aka union dues health care(via gov provided universal care) and pensions(not sure how they cash out of those probably bankruptcy deal)
and the new ceos get a clean sleet to continue to destroy whatever emerges from chp 13 7 or some other odd number
so you pay thats the end result
"The t100 is too underpowered and couldn't compete with F150s and Rams."
In terms of power and maximum capability no but those things ran forever. Something you could never say about a Ram. If Toyota can put out a truck that combines reliability with the power of a big American truck, i'd buy it in a heart beat.
Worth repeating. You certainly nailed by car buying profile. My last Ford was a 1980 Fiesta. The last 20 years its been 3 Hondas.
GM's trucks are junk, eh?
I've got a '98 K2500 (8 bolt wheels) that I've used extensively offroad in the Utah deserts. I've lost count of the Ford and Jeep products I've had to tow out. LOL!
I think that's a HD truck with floating axles. It's not too bad, but I would prefer Ford's version for that year. It's a matter of historical statistical reliability. I don't go by anecdotal stories. I was referring to their lighter duty trucks mostly.
But under just about every consumer survey there is, Nissan falls behind Ford in this regard.
And in JD Power, Mercury beats out Toyota, Honda, and Acura (but not Lexus) for reliability...
I'll bet you're right is that is the reason used, but its more perception than it is fact.
AFA's boycotts are completely ineffective..... even in this case....
AFA's boycotts are completely ineffective..... even in this case....
Cute...
I'm about to take my 10 year old Taurus to the shop for the second time EVER for a repair. Outer tie rod end = $20 for parts, $30 for labor, and $65 for an alignment.
The first repair was even cheaper.
Fair enough - but judging modern Fords based on one built 27 years ago isn't exactly fair.
Buy what you want, of course. :)
If you are referring to the 2007 Toyota FJ Cruiser, you are way off base. One of the reasons I am buying one is that it is a hard-core off-road vehicle. Try doing a little research before you spout off.
Needed something beefier than the 1980 Fiesta for 2nd car with young kids and still wanted great gas mileage (was driving 47 miles to work 1 way in the Fiesta and it's miles were over 180,000 and things were breaking down...ended up selling it to Betty Bone for $100...the kids still laugh about that...her name on the check).
Got a 1987 Accord...got in a head on collision a couple of years later (low speed) with the family on board and everyone survived (wife had fractured sternum)..car totalled. Bought another Honda Accord and drove it for 296,000 miles then donated it to charity. Have my 3rd Honda now, a Civic with over 260,000 miles.
After my wife's 1978 Chevy Malibu, she has been all Toyota since then.
My grown son and his family have a Honda.
My other son has a Chevy Malibu.
My daughter has a Toyota Scion.
My Ford Fiesta was built in Germany. Our 78 Malibu was built in Canada. The 2 Accords we had were built in Marysville, Ohio.
The Honda has been a great car for me. I probably wouldn't consider buying anything else...(why take a chance?...why fix something that isn't broke attitude).
Speaking of your Taurus, I think some of Ford's problem is in dropping a line like that with built in market share (it was at or near the #1 selling sedan in America for a couple of years). It was an outrageous decision! Ford drops the Mustang (wildly popular...built in market share) and then brings it back years later. Insteading of improving on popular vehicles, they shoot themselves in the foot.
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