Ford Reports Nearly $9B Loss

Second Quarter Earnings Fall Short Of Expectations; Says U.S. Recovery Won't Occur Until 2010

(AP)  Ford Motor Co. said Thursday it lost $8.67 billion in the second quarter largely because of a reduction in the value of assets.

The company also announced that it will bring six European small car models to North America by the end of 2012 as it deals with a market shift from trucks to cars brought on by high gasoline prices. The company also will retool two more North American truck and sport utility vehicle plants to build small, fuel-efficient vehicles.

The second-quarter loss was $3.88 per share, compared with net profit of $750 million, or 31 cents per share, in the same quarter a year ago.

The loss includes $8.03 billion worth of write-offs because of a decline in value of North American assets and Ford Motor Credit Co.'s lease portfolio. Even excluding those special items, Ford lost 62 cents per share, worse than Wall Street expected. Twelve analysts surveyed by Thomson Financial, on average, expected a 27 cent loss per share.

Ford's second-quarter revenue was $38.6 billion, down $5.6 billion from the year-ago period. Analysts expected $34.6 billion.

Ford said it will retool the Michigan Truck plant in suburban Detroit, shifting its products from large SUVs to make global vehicles off the European Focus platform by 2010.

The SUVs made at Michigan Truck - the Lincoln Navigator and Ford Expedition - will be shifted to the Kentucky Truck plant in Louisville.

The company also will retool the Louisville Assembly Plant, which now builds the Ford Explorer midsize SUV, to produce vehicles on the European Focus frame, starting in 2011.

Ford also said its Twin Cities Assembly Plant in St. Paul, Minn., will continue producing the Ranger small pickup through 2011. The plant was scheduled to close next year.

Ford also said in a statement that it does not expect a U.S. economic recovery to start until early 2010.

The company said its write-offs included $5.3 billion in North America and $2.1 billion in write-downs for Ford Credit's truck-heavy lease portfolio. Chief Financial Officer Don Leclair said most of the write-down was triggered by the drop in value of the company's truck and SUV inventory and lease residuals.

Ford reported a pretax loss of $1.3 billion in North America because of the deteriorating U.S. market and the shift away from trucks. U.S. sales overall were down 10 percent in the first half of the year, with Ford's sales down 14 percent.

The company, though, continued to be profitable overseas, posting a $582 million profit in Europe and $388 million in South America. The company also made $50 million at its Asia-Pacific-Africa division.

"The second half will continue to be challenging, but we have absolutely the right plan to respond to the changing business environment and begin to grow again for the long term," President and CEO Alan Mulally said in a statement.

[dougmsbbs]

aeasus wrote
Bush is by far the worst president this country has ever known.

Nah. We have Carter and Clinton tied for that spot. Bush is just barely ahead of them, though...

[dougmsbbs]

Uh, oh. How long before we bail these guys out, too? Can''t put all those union workers on the street now, can we?
Is there anyone here who did not see the demise of the SUV a long time ago when gas prices shot through the roof? Why couldn''t the auto makers???

[vafrommn]

My last three vehicles have all been Ford products. Each and every one of them passed the 200,000 mile mark without any mechanical problems. My son still drives my ''97 Ford Thunderbird .... 250,000 miles now and still doesn''t use any oil. Has never had the engine opened up, but he did have to rebuild the transmission at 235,000 miles. My 2004 Ford Focus SVT is now at 125,000 miles and running strong. I wouldn''t touch a Japanese vehicle. And my 1954 Ford F-250 is still running strong too!

What you dunces have to remember is, the automobile manufacturers have to build vehicles that people will buy, not some enviromentalist''s idea of what the proper vehicle should be.

[j_davis_meeb]

I forgot to add.. Ford IMO has a long history of putting their shareholders way before the end users of their product.

[txgrouch2006]

aeasus wrote
Bush is by far the worst president this country has ever known.
-------------------
Then why were you blaming Reagan?

Yes, I know, we Republicans all look alike to you...

[j_davis_meeb]

-Ford shouldn''''t have overpriced the 500. That could have been its saving grace.

Posted by OneWorldUSA at 06:36 PM : Jul 24, 2008

Indeed it could have. Instead it was higher priced than most any car in its class. A co-worker of mine bought one for his wife new in 2005 and is still well satisfied with it.

-If they could build a car equally as reliable as an import, they''''d be cooking.

I''ll agree up to a point. In the mid 80''s Detroit was still building a 4 or 5 year car. Quality has improved drastically since then. It had to... otherwise there would be no GM, Ford or Chrysler now.

These days I think its more a question of the owner willing to do the vehicle maintainence than of build quality. Neglected autos won''t last long no matter who made them.

[generey]

Ford Reports Nearly $9B Loss
Second Quarter Earnings Fall Short Of Expectations.

That isn''t a loss, it''s poor "projection''s" on their part. Loopholes just let them to write it off as a loss. More good new''s today though; the DOW took a good dump!

[oneworldusa]

Ford shouldn''t have overpriced the 500. That could have been its saving grace. Instead, they turned it back into a Taurus. Americans will pay more for quality, haven''t they figured that out yet?

If they could build a car equally as reliable as an import, they''d be cooking.

[aeasus]

I''''m so tired of the Bush bashing. Blame Bush for this, blame Bush for that. It''''s ALL of them. I was just reminding the other guy about that.

Posted by txgrouch2006 at 04:01 PM : Jul 24, 2008
----------------------

Bush is by far the worst president this country has ever known. He is the where ultimate responsibility rests. Therefore all national problems and many international problems are due to his actions--or lack of reactions. He''s simply not a competent leader!

[mandalay-bay]

Bring on your little j@p car and I''''ll bring my f-350 dually power stroke.. and we''''ll see who walks away... last j@p cr@p I hit was smashed like a bug.. it was totaled.. I got a scratch on my front bumper..

Had a toyota pick up try to push me at a stop light.. he was first in line I was second.. he had pulled to far out in the intersection.. and didn''''t go.. he wanted to back up so he pushed on me. I pushed back.. and he was in the middle of the road when the smoke cleared.. FOOL!!!!

I also had a co worker talk smack with his Chevy.. I offered to hook up and have a pull off.. but the chevy owner got scared and ran away like a little girl.. typical Chevy owner..

put up or shut up..


--------------------------------------------------------------------------------

Posted by MeanBiker at 03:00 PM : Jul 24, 2008


Have fun spending $120 to fill up...

YEEHAW!!!!!!!

BUILT FORD TOUGH!!! I SURE HOPE YOUR WALLET IS TOO!!

[brianp55]

I%u2019d have to say, than when viewed panoramically against time, none of the current woes plaguing Ford and the other US automakers is surprising. It really boils down to which companies best fit the needs of our current society and which are anachronisms. Ford, unfortunately, is deep in the latter category and is hoping to infuse some rapid self-evolution in order to quickly morph into something useful, I guess. During the 50s and 60s, when the auto industry was clearly dominated by American companies, high wages for unskilled labor and little attention to quality and efficiency were permissible. Unfortunately for Ford, auto industries in other countries (most notably, Japan) developed and produced a superior product at a lower cost. The really unforgivably negligent act on the part of Ford (and others, including the UAW) was that they continued to treat this situation as business as usual and failed to respond in any meaningful way. I find it very difficult to feel the slightest bit of sympathy for these US companies. They have never hesitated to sell the American consumer an over-priced pile of defective junk and if they collapse, then I say let the chips fall where they may.

[txgrouch2006]

ramos937 wrote
Contrast that with a Japanese car executive.
------------------
If he REALLY wanted to experience the Japanese car-owning experience, he would pay his own money for the car, drive it for two years, then be FORCED TO JUNK THE CAR by the Japanese car inspection laws. These laws require a two year old car to be COMPLETELY DISASSEMBLED, INCLUDING DISASSEMBLING THE ENGINE AND MEASURING EVERY SINGLE DIMENSION OF EVERY PART AND CHECKING IT AGAINST THE FACTORY BLUEPRINTS to check for any abnormal wear. Then you also would have to pay to have the car re-assembled before you can drive it again.

IT COSTS MORE TO PAY FOR THE INSPECTION THAN TO BUY A NEW CAR. That''s why if you travel through the Japanese countryside, you see pole-shaped stacks of white Toyotas, still in like-new condition. In other places, you can find mountains of car engines that were junked and replaced instead of paying for the inspection.

THAT''S HOW THE JAPANESE CAR COMPANIES KEEP THEIR BUSINESSES HUMMING, BY FORCING JAPANESE CITIZENS TO BUY A BRAND NEW CAR EVERY TWO YEARS.

[ramos937]

The life of a Ford executive is roughly this way. About 8 AM, he/she is picked up by a chauffer driving the company''s latest luxury car. The car will be especially selected for its quiet comfortable ride. No dents, AC perfect, acustics excellent, etc. The exec spends the day in Detroit trying to understand why Ford is losing money. Around 6 PM, the executive is picked up by the same chauffer driving an identical car as the mornings.

Contrast that with a Japanese car executive. A car is picked at random from the factory by that executive. He drives it off the lot and keeps it for a number of days. During that time, he gets to experience every jolt, every defect the car has. He gets hands on experience with the cars his company builds.

Which one has a better grasp as to where improvements should be made - the Ford excutive or the Japanese excutive?

[haoli25]

Who would have ''thunk'' it, that poorly made, inefficent, over-priced cars wouldn''t sell? Obviously not Ford or GM.

[txgrouch2006]

Marshall_Nee wrote
We all know that in Europe they have a ready made Camry and Accord killer in that Continent -- the Mondeo. Why they aren''''t already marketing it too in this country instead of the ''''Homer Simpson'''' like Taurus I''''ll never know!
--------------
The same reason Volkswagen doesn''t sell the Vento here - it doesn''t meet U.S. standards.

And it doesn''t meet U.S. standards because NOBODY THERE WOULD BUY IT if it was loaded down with emission controls and safety equipment that rob it of performance to make it meet U.S. standards.

The cars made for foreign markets drive like rockets. But they can''t be driven here legally.

[marshall_nee]

We all know that in Europe they have a ready made Camry and Accord killer in that Continent -- the Mondeo. Why they aren''t already marketing it too in this country instead of the ''Homer Simpson'' like Taurus I''ll never know!

[Syndicate]

This is about it for Ford losses. 2010 will be Fords year. I expect the stock to hit $20 by then. Most of this money has been used to develop new cars. The 2010 Taurus is amazing. The new Lincolns and Volvos are very nice. Ford and Chevy actually have better Quality than Toyota. Ford is the medias favorite whipping boy. I remember all the doom and gloom from the 90s never panned out. They don''t even pick on GM the way they pick on Ford. You never hear anything bad about Toyota. Yet they are one of the dirtiest companies out there. They hide there technical problems and rarely issue recalls unless they are forced to. The Rumor that Toyota is building more plants is just Toyota propaganda. They are actually converting their monster truck plant to build the Prius.

[ceres5]

The greedy people at Wall Street and the U.S. oil companies must be happy about the misery they are inflicting to tens of millions of Americans. As long as they make money quickly, it does not matter if the American people bleed to death.

[txgrouch2006]

aeasus wrote
I just pointed out it was a shared blame.
---------------
So was I. What are we fighting about?

I''m so tired of the Bush bashing. Blame Bush for this, blame Bush for that. It''s ALL of them. I was just reminding the other guy about that.

[eddom949]

Ford still hasn''t had a screw up in my eyes. This is just testing. Boeing, send Ford 8 Billion. You relied on them, sent your million dollar baby Mullaly, and you''re so ridiculously top heavy with executives, you''re going to need all the karma you can get for that 787 you''re trying to float...