Ford Motor Co. announced on July 23 a quarterly loss of $8.7 billion amid hefty writeoffs as the company said it would accelerate its vast reorganization program. The second-quarter results include eight billion dollars in special charges to write down the value of Ford's assets and to recognize losses from auto leasing. Excluding special charges, the operating loss was $1 billion, or 64 cents per share, worse than Wall Street estimates of a loss of 27 cents a share.
Ford's second quarter revenue was $38.6 billion, down from $44.2 billion a year ago before the company sold its Jaguar, Land Rover and Aston Martin nameplates. Excluding those brands, revenue would have been down slightly, with lower volume partly offset by favorable exchange. Special charges includes a writeoff of $5.3 billion dollars for Ford's North American assets and $2.1 billion for Ford credit.
Ford said the results prompted a stepping up of its transformation plan including "the addition of several new fuel-efficient small vehicles in North America and a realignment of its North American manufacturing." As part of its realignments, Ford said it will continue to offer "targeted hourly buyouts" in coordination with union contracts "to secure competitive employment levels." The company also said it remains on track to reduce costs for white-collar jobs by 15% in North America by August 1.
The transformation plan also calls for the introduction of six of Ford's European small cars to the US market and an extension of turbocharged engines to help fuel economy in other models.
"Our European and South American operations are robust and profitable. We have momentum in Asia. And we are uniquely positioned to leverage our global assets and the global strength of the Ford brand to quickly bring more small, fuel-efficient vehicles to North America,"said Ford CEO Alan Mulally. Ford managed a profit of $582 million in Europe and $388 million in South America.
In addition to bringing six small vehicles to North America from the its European lineup, Ford is speeding up plans for its EcoBoost turbocharged engine and new four-cylinder engines that deliver better fuel economy. It is also boosting hybrid production and converting three existing truck and SUV plants for small car production, beginning this December.
"We continue to take fast and decisive action implementing our plan and responding to the rapidly changing business environment," said Mulally. "Ford is moving aggressively using our global product strengths to introduce additional smaller vehicles in North America and to provide outstanding fuel economy with every new product."
Copyright Agence France-Presse, 2008