Ford Loses $2.8B In 4th Quarter

Narrows 2006 Losses; Cost Reductions In North America Imminent

(AP)  Ford Motor Co. narrowed its losses in the fourth quarter and for all of 2007 amid continued weakness in North America and said Thursday the outlook for U.S. sales in 2008 remains grim.

Ford President and Chief Executive Alan Mulally also said the company will be adjusting production and making further cost reductions in North America, including a new round of buyouts for its 54,000 U.S. hourly workers.

Details of the buyout program were expected later Thursday.

Ford lost $2.8 billion, or $1.30 per share in the fourth quarter, narrower than a loss of $5.6 billion, or $2.98 per share, in 2006. The full-year loss of $2.7 billion, or $1.35 per share, was significantly better than 2006, when Ford lost $12.6 billion, or $6.72 per share.

Dearborn-based Ford reported revenue of $44.1 billion for the fourth quarter, up from $40.3 billion in the year-ago quarter. The company reported full-year revenue of $172.5 billion, up from $160.1 billion in 2006.

Excluding special items, Ford lost 20 cents per share for the quarter and 19 cents per share for the year, in line with Wall Street's expectations. Analysts surveyed by Thomson Financial had predicted a loss of 19 cents per share for the quarter and 17 cents per share for the year.

Special items for the year included a $705 million charge for separation programs in North America and a $208 million gain from the sale of Aston Martin.

Ford shares slipped 5 cents to $6.25 in premarket trading.

The company lost $3.5 billion for the year in its North American automotive operations, narrower than a loss of $6.0 billion in 2006. Ford said higher net pricing and lower costs helped offset losses from lower sales and unfavorable exchange rates. Full-year revenue for the region was $70.5 billion, up from $69.4 billion a year ago.

In the fourth quarter, Ford lost $1.6 billion in North America, compared with a loss of $2.7 billion in the year-ago quarter. Fourth-quarter revenue was $17.0 billion, up from $15.1 billion a year ago. Ford took a hit in the U.S. in 2007 when it reduced low-profit sales to rental-car fleets by a third.

Ford reported a full-year profit of $997 million in Europe, more than double its 2006 profit of $455 million. Ford said the improvement was due to continued cost reductions, higher net pricing and higher sales. Full-year European revenue was $36.5 billion, up from $30.4 billion in 2006. Ford reported a fourth-quarter profit of $223 million on revenue of $10.4 billion in Europe, up slightly from $218 million on revenue of $8.8 billion a year ago.

Earnings also more than doubled in South America, where Ford had a full-year profit of $1.2 billion, up from $551 million a year ago. Full-year revenue improved to $7.6 billion from $5.7 billion a year ago. For the quarter, Ford posted a profit of $418 million in the region, up from $114 million a year ago, and revenue of $2.4 billion, double its 2006 revenue.

Ford's Premier Automotive Group, which includes the luxury Jaguar, Land Rover and Volvo brands, posted a full-year profit of $504 million, compared with a loss of $344 million a year ago. Ford said it reduced costs across all brands and saw higher sales and higher net pricing at Land Rover. Full-year revenue for the brands was $33.2 billion, up from $30.0 billion in 2006.

Ford doesn't break out results for its luxury brands, but said Volvo incurred a loss for the year.

Ford recently decided to keep Volvo but is planning to sell Jaguar and Land Rover. Earlier this month, Ford selected Indian car maker Tata Motors Ltd. as the top bidder for the two British brands.

The luxury brands posted a $59 million profit for the fourth quarter, compared with a profit of $174 million in the year-ago quarter. Ford said the decline was explained by adverse currency exchange rates and product mix at Volvo, which broke even for the quarter, while Jaguar and Land Rover made a profit. Revenue for the unit was $9 billion for the quarter, up from $8.6 billion a year ago.

Ford's credit division, Ford Motor Credit Co., posted a $775 million profit for the year, down from $1.3 billion a year ago as it was hit by higher borrowing costs, higher depreciation expenses for leased vehicles and other factors.

[mcv57]

The glory days in the auto industry have been gone for many, many years. They failed to adapt. Their pay scale was too high, the benefits too generous, the union demands were too stiff and unrealistic as the rest of the workforce was changing. And meanwhile, quality, durability and innovation disappeared. The latter three may have improved somewhat recently but the stigma of having a junk product will not go away anytime soon.

Posted by olebd

Ford''s bankruptcy is going to be poetic justice. Since its conception, Ford and its corporate croonies has offered nothing more than tyranny, arrogance, corruption, and greed. The corporate government attempted to build an image of American tradition, but its corrupt bigot executives, thug unions, poor quality assurance, and chaotic arrogant engineering department was sure to bring the monopoly down to its knees.

Founder Henry Ford was nothing more than an bigot opportunist who did little to nothing for its community. Greed filled his pockets and his talent and contribution to American industry equated to that of his education adhievements: NOTHING.

[olebd]

The glory days in the auto industry have been gone for many, many years. They failed to adapt. Their pay scale was too high, the benefits too generous, the union demands were too stiff and unrealistic as the rest of the workforce was changing. And meanwhile, quality, durability and innovation disappeared. The latter three may have improved somewhat recently but the stigma of having a junk product will not go away anytime soon.

[easeup-2009]

talkingham

So the guy who makes $75 grand a year and pays zero for health care to screw in a rear view mirror isn''t hurting Ford''s profitability? Not to mention the legacy costs of the pension/bennies of all the retired Ford employees?

Unions unions unions......

[fstop100]

very good TALKINHAM you about said it all.

[talkingham]

How can these clowns have $44-billion in sales and lose money. They must have an awful lot of people at the top stealing them blind, not to mention one of the crumbiest car lines around. Their cars look stupid, have even stupider names for marketing purposes, and have absolutely nothing exciting or innovative in their designs that look pretty much the way they did 15 years ago. I test drove 3 different Fords before I bought my Subaru to go along with the Acura Integra I have driven now for 17 YEARS and the Fords were simply terrible. In the Ford Focus the hood drops down so fast in front you can''t even see it, it''s like you''re driving a windshield instead of a car. Like most American cars the interior even when large is clostophobic because of the tiny window sizes- Mitsubishi in Japan is like that too. The Hondas and the Subarus have great touring style windows that increase your safety because of increased visibility in all directions.
Even so, $44-billion in sales and you lose money. While companies like Honda and Toyota are increasing their US work forces Ford, with all of their name recognition, is intent on destroying their work force. They blame the workers for bad design and bad management and the greedy billionaires and their multi-million dollar golden parachutes drive safely off to one of their many retirement homes on the lake or seashore.