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Ford Losses ! - dlb - 01-26-2007
Ford posts record loss of US$12.7 billion in 2006
Updated Thu. Jan. 25 2007 11:22 AM ET
CTV.ca News Staff
Ford Motor Co. is facing the largest deficit in the 103 years since the company was started.
Ford lost US$5.8 billion in the fourth quarter of last year, due to slumping sales and massive restructuring costs. That pushed the auto manufacturer's deficit for the year to $12.7 billion.
The previous Ford record for an annual loss was $7.39 billion in 1992.
This year's deficit translates to an annual loss of $6.79 per share.
One year earlier, in 2005, the Dearborn, Mich. based company earned $1.44 billion, or 77 cents a share.
Much of the losses are due to Ford's new restructuring plan, which includes buyout packages for roughly 38,000 employees as the company moves towards shutting down some plants, said CTV's Business Editor Linda Sims.
"But still, when you strip out the restructuring costs, they still, in the fourth quarter, lost $2.5 billion in the North American auto operations," Sims told CTV Newsnet.
"Basically, they are still trying to sell the big SUVs and the trucks -- and they are not selling. They still account for about 52 per cent of the company's sales, so they've got trouble there."
Ford's losses are expected to dip even lower this year. The company expects to spend $10 billion on automotive operations through 2009, and invest $7 billion in new products.
Those new products could be the key to securing the company's future, Sims said.
"This is a company that is bleeding red ink. What it needs is certainly downsizing, but analysts are saying what it needs as well is better product. They're just not seeing yet the kind of automobiles that are going to get people into the car lots and get those sales turned around."
Company strategy
Ford CEO Alan Mulally said actions are underway to make the company more profitable.
"We began aggressive actions in 2006 to restructure our automotive business so we can operate profitably at lower volumes with a product mix that better reflects consumer demand for smaller, more fuel-efficient vehicles,'' Mulally said in a statement.
"We fully recognize our business reality and are dealing with it. We have a plan and are on track to deliver.''
Ford lost $1.50 per share in all of 2006, excluding special items -- worse than Wall Street predicted. Fourteen analysts polled by Thomson Financial expected a loss of $1.35 a share for the year, excluding special items.
Its shares fell 10 cents to $8.10 in pre-market trading.
Ford said that special items associated with restructuring costs totalled $9.9 billion for the year as the company continues efforts to shrink itself to match demand.
Sales for the fourth quarter fell to $40.3 billion from $46.3 billion a year ago, while annual sales dropped to $160.1 billion from $176.9 billion in 2005.
Ford needs to start selling vehicles people will actually buy !! For *uck sakes bail out of the SUV's !!! People aren't buying them in quantity anymore.
Ford Losses ! - Flofocus - 01-26-2007
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