Ford posts $8.7 billion loss; Euro Focus, unibody Explorer planned for 2010
July 24, 2008
Source: Leftlanenews
Ford on Thursday reported its second quarter financial details, saying it posted an $8.7 billion loss as high gas prices and a difficult economy drove buyers away from its highly profitable trucks and SUVs, in the process toppling the best-selling vehicle in North America, the Ford F-150.
In contrast, the company earned $750 million in the second quarter of 2007. Following this weekââ¬â¢s Q&A session with the companyââ¬â¢s Executive VP Mark Fields, the automaker announced steps to attempt to turnaround from the loss.
Part of that plan includes bringing six small European vehicles for sale in North America, as well as converting truck and SUV plants as soon as December.
The automaker also promises to double its four-cylinder engine production capacity in North America by 2011, while doubling hybrid vehicle models and their numbers by 2009 in light of the higher cost of gas.
The fuel-efficient light-duty Ranger pick-up also got a stay of execution, at least until 2011.
Serious doubts about the future of the Mercury brand were also officially put to rest, as Ford promises to revitalize the near-luxury nameplateââ¬â¢s lineup before 2011. A new small car for the brand will come in 2010, Ford promised.
Specific models announced during the report include the European Transit Connect cargo van coming to North America in mid 2009, along with the seven-passenger Lincoln MKT crossover next year, and sedan and hatchback versions of the Ford Fiesta early in 2010. North America will finally get a new, European Focus in 2010, in both sedan and five-door hatch form.
As previously rumored, the Explorer SUV will switch to a unibody design in 2010 as opposed to the current body-on-frame, which should save weight and increase fuel economy by as much as 25 percent.
The automakerââ¬â¢s Michigan Truck Plant will be converted to build C-car (Focus) platform small cars, with a Louisville, Kentucky plant stopping Explorer production in favor of more C-platform cars by 2011. The truck plant in Cuautitlan, Mexico will build the Fiesta small car in 2010.
Finally, Ford will continue to buy out workers at U.S. plants and other facilities in its attempts to reduce North American salaried jobs by 15 percent by August.
there a little late to the game aren't they?
D-Dub,Jul 24 2008, 05: Wrote:there a little late to the game aren't they?
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No later than GM or Chrysler :ph34r:
NefCanuck
NefCanuck,Jul 24 2008, 07:00 PM Wrote:D-Dub,Jul 24 2008, 05: Wrote:there a little late to the game aren't they?
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No later than GM or Chrysler :ph34r:
NefCanuck
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Chrysler? heck they way they are going they should just quit.
Just as a side note, Petro-Canada posted a 1.2 Billion dollar profit for the same quarter. I bet the other petroleum companies did the same. or better.
Im still excited about the new focus in 2010
NefCanuck,Jul 24 2008, 07:00 PM Wrote:D-Dub,Jul 24 2008, 05: Wrote:there a little late to the game aren't they?
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No later than GM or Chrysler :ph34r:
NefCanuck
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I dunno man, GM's got some small cars to choose from........not many that I like, but still more then Ford.
I also heard that Honda made a 8. something billion profit for the same quarter!
I guess that's where the money went!
NA consumers are shooting themselves in the foot, but hey, if NA had better vehicules we would not be talking about this!
The recession (sp?) in the US will likely bring more of these "losses".
the new civic is selling like crazy i bet if you keep your eyes open on the way home you will see atleast three 07-08 Civics
ZX3_2NV,Jul 25 2008, 09:37 AM Wrote:Im still excited about the new focus in 2010
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Me too... but if I do the mods I want to do on my ST, I won't be shopping for a new car untill 2014+! But I don't see my mods happening as the gf and I plan to get married in 2010 and all our funds will be going into that!
The huge loss is good and bad... If you look at the fine print, $5.3 billion of it is labeled as "North America Long-Lived Assets", which is being speculated as dumping all of the hardware that was used to make trucks and sport utes and retool for the new compact cars.
The loss is causing Ford (and others) to take notice and realize that to make money like the Japanese automakers, they need to BUILD CARS LIKE THE JAPANESE AUTOMAKERS.
Look at the C car segment... Civic, Corolla, Mazda3, Impreza, Lancer, Sentra... All WAY more content and better fit and finish than anything offered over here from the 'Big Three'. The Cobalt/G5 are tin cans, the Caliber family is mediocre at best, and the Focus has as many detractors as fans. The only thing that could compete is the Saturn Astra, but it appears to have been decontented and 'de-fun-ified' to the point that it is just another GM small car.
The B car segment is worse... Fit, Yaris, Versa... What's over here? Aveo/Wave... Wow. Doesn't look good.
Ford, unlike Chrysler and GM, has a HUGE advantage. They have GREAT cars elsewhere. With the Focus and Fiesta, Ford is taking the right steps in making sure they remain in business and might return to profitability. GM and Chrysler will be playing catch-up once Ford unleashes Europe on them!
*Just my thoughts...*
Ryan
D-Dub,Jul 25 2008, 09: Wrote:I dunno man, GM's got some small cars to choose from........not many that I like, but still more then Ford.
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Yup ... the remnants of their Daewoo purchase + the Opel, sorry Saturn Astra.
When I did communications for FoC I can remember sitting in meetings and Bobbie Gaunt ranting about the need for a good "A" car in Canada and she pushed Nasser and even Trotman real hard to make one available for the Canadian market ... that was 10 years ago.
The problem: the Canadian market simply wasn't / isn't big enough by itself for Ford to sell small cars profitably and the Americans had no interest ... hell, Ford of Canada had to beg and cajole Detroit to also offer the Focus hatch ... they were originally going to go with just the sedan and wagon.
So if there's a silver lining to the escalating cost of oil it will be the increased availability of good small cars in NA.
reldridge,Jul 25 2008, 10:52 AM Wrote:The huge loss is good and bad... If you look at the fine print, $5.3 billion of it is labeled as "North America Long-Lived Assets", which is being speculated as dumping all of the hardware that was used to make trucks and sport utes and retool for the new compact cars.[right][snapback]269383[/snapback][/right]
Actually, no.
This is how this announcement works.
1) Remember the Ford/UAW contract that everyone gushed over last year? The one that shed all of that "legacy cost" that people like to quote where Toyota pays $50 an hour per employee and Ford pays $70 per, yet we make about the same an hour (whether you realize it or not)? Part of that "legacy cost" reduction was the creation of VEBA (Voluntary Employee Beneficiary Association) where the Union handles the retiree benefits? It was this quarter that Ford had to make the $4.5 Billion contribution to set up the fund.
2) It you buy a house valued at $300,000 , and the city you live in goes through economic decline, your house value might diminish to $250,000 . So, on paper, you lost $50,000 . When Ford closes plants, the area around the plants diminish in value. The plant diminishes in value. All of these are "asset write downs". Asset write downs aren't always a bad thing, believe it or not. Less value means less taxes. But either way, Ford didn't lose that $3B in cash, it's on paper. Just like stock, a paper loss doesn't become a real loss untill you sell the stock.
Did anyone actually look at what Ford actually lost? Only $1.3B (North American operations). Not great, I'd be the first to admit. But considering the hit that gas is making on the truck and SUV market it wasn't unexpected.
Of course, all this doesn't make great headlines. Alarmist mentality and speculative trading is why we're paying $1.25+ /L for gas. Just like the whole 3rd shift hiring thing. And I know many of you are affected from it -- and
I'm not making light of it -- but did you see the headlines about it?
"More layoffs at Ford"
"Ford cancels 3rd shift"
The reality is that Ford will still have a third shift in body and paint for the time being. The trim/final line, scheduled for 8 hours but can be forced to work 10s . Oakville is still taking the 150 or so that are transferred in from Windsor. Nobody got "laid off", the 300 or so hires got put
on hold. And I know it sucks for those of you that are waiting, I have a friend that I gave my application to waiting too. But the media loves this s***, telling half the story.
If you want to actually look at the real story that Ford has the legal obligation to report to its shareholders, look here:
http://www.ford.com/doc/ir_20080724_2q08_earnings.pdf
the media likes to make a fuss over a loss of billions of dollars and doesn't like to report on the other stuff in those quarterlty reports.
I'd say Ford is looking pretty good now, when they shift their product line over to B and C cars in 2010 you'll see a profit return to Ford. I'd buy some share while its cheap and hang onto it as it climbs.
My dad got bought out wednesday moring. He knew it was coming at some point. He doesn't really care to much it sounds like.
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