Ford Motor Co lost a staggering US$12.7 billion last year -- an average of US$1,925 for every car and truck it sold and the worst loss in the company's 103-year-history.
The company that invented the assembly line and whose name was a byword for the auto industry warned it will bleed cash for two more years before it has a shot at making money.
Ford's loss, reported on Thursday, came amid slumping demand for sport utility vehicles and other gas guzzlers and huge restructuring costs tied in part to the planned closure of 16 plants.
Last year's loss surpassed Ford's old record of US$7.39 billion set in 1992.
A fourth-quarter loss of US$5.8 billion helped drive up the red ink, which for the year amounted to US$6.79 per share versus a profit of US$1.44 billion, or US$0.77 a share, in 2005.
Although huge, the losses were far from the largest quarterly or annual corporate deficits on record -- Time Warner Inc reported a US$97.2 billion loss in 2002, largely due to new accounting rules about how to value assets. Ford could not rely on accounting rules, however, to explain its total.
Ford's loss also was not the worst annual total in the auto industry. General Motors Corp lost US$23.4 billion in 1992, due mainly to accounting rule changes on health care liabilities.
The Dearborn-based company predicted more losses for this year and next, but Ford said its restructuring plan is on track to return to profitability in 2009.
"We know where we are. We are dealing with it and we're on plan," chief executive officer Alan Mulally told reporters and industry analysts in a conference call.
Several analysts said the loss was not surprising, given Ford's high costs and falling market share and sales. Ford's future is cloudy at best, given the deficit that it must overcome, analysts said.
"They have a massive challenge in front of them. Their basic business is billions of dollars in the red," Burnham Securities analyst David Healy said.
Ford, which lost US$6 billion on North American operations alone, said it expected to burn up US$10 billion in cash to run its business through 2009 and spend another US$7 billion to invest in new products.
The fourth-quarter loss was the worst final-quarter loss in Ford's history and its second-worst quarterly performance. Ford lost US$6.7 billion in the first quarter of 1992.
Excluding special items, Ford lost US$1.50 per share in all of last year, worse than Wall Street predicted. Fourteen analysts surveyed by Thomson Financial expected a loss of US$1.35 per share, excluding special items.
Chief financial officer Don Leclair said that Ford expected favorable results from its automotive business next year.
But because of interest on its debt, "total automotive results are expected to be worse in 2007 than in 2006," he said.
Leclair said the company finished last year with US$33.9 billion in cash available for its automotive operations.
The company is on target to achieve its goal of cutting US$5 billion in annual costs by next year, compared with 2005, he said.
‘TAIWAN-FRIENDLY’: The last time the Web site fact sheet removed the lines on the US not supporting Taiwanese independence was during the Biden administration in 2022 The US Department of State has removed a statement on its Web site that it does not support Taiwanese independence, among changes that the Taiwanese government praised yesterday as supporting Taiwan. The Taiwan-US relations fact sheet, produced by the department’s Bureau of East Asian and Pacific Affairs, previously stated that the US opposes “any unilateral changes to the status quo from either side; we do not support Taiwan independence; and we expect cross-strait differences to be resolved by peaceful means.” In the updated version published on Thursday, the line stating that the US does not support Taiwanese independence had been removed. The updated
‘CORRECT IDENTIFICATION’: Beginning in May, Taiwanese married to Japanese can register their home country as Taiwan in their spouse’s family record, ‘Nikkei Asia’ said The government yesterday thanked Japan for revising rules that would allow Taiwanese nationals married to Japanese citizens to list their home country as “Taiwan” in the official family record database. At present, Taiwanese have to select “China.” Minister of Foreign Affairs Lin Chia-lung (林佳龍) said the new rule, set to be implemented in May, would now “correctly” identify Taiwanese in Japan and help protect their rights, the Ministry of Foreign Affairs said in a statement. The statement was released after Nikkei Asia reported the new policy earlier yesterday. The name and nationality of a non-Japanese person marrying a Japanese national is added to the
AT RISK: The council reiterated that people should seriously consider the necessity of visiting China, after Beijing passed 22 guidelines to punish ‘die-hard’ separatists The Mainland Affairs Council (MAC) has since Jan. 1 last year received 65 petitions regarding Taiwanese who were interrogated or detained in China, MAC Minister Chiu Chui-cheng (邱垂正) said yesterday. Fifty-two either went missing or had their personal freedoms restricted, with some put in criminal detention, while 13 were interrogated and temporarily detained, he said in a radio interview. On June 21 last year, China announced 22 guidelines to punish “die-hard Taiwanese independence separatists,” allowing Chinese courts to try people in absentia. The guidelines are uncivilized and inhumane, allowing Beijing to seize assets and issue the death penalty, with no regard for potential
‘UNITED FRONT’ FRONTS: Barring contact with Huaqiao and Jinan universities is needed to stop China targeting Taiwanese students, the education minister said Taiwan has blacklisted two Chinese universities from conducting academic exchange programs in the nation after reports that the institutes are arms of Beijing’s United Front Work Department, Minister of Education Cheng Ying-yao (鄭英耀) said in an exclusive interview with the Chinese-language Liberty Times (the Taipei Times’ sister paper) published yesterday. China’s Huaqiao University in Xiamen and Quanzhou, as well as Jinan University in Guangzhou, which have 600 and 1,500 Taiwanese on their rolls respectively, are under direct control of the Chinese government’s political warfare branch, Cheng said, citing reports by national security officials. A comprehensive ban on Taiwanese institutions collaborating or
RSS