With Ford's announcement Aug 3 that it more than doubled its second-quarter loss to $254 million, it also appointed a veteran Goldman Sachs banker, Kenneth Leet, as a strategic advisor to its chief executive Bill Ford. The hiring of Leet set off talk on Wall Street that the company was now preparing to spin off its auto credit financing unit or to sell its loss-making Jaguar brand.
Ford warned that its Premier Automotive Group, which includes luxury European marques such as Jaguar, would not turn a profit this year owing to weaker-than-expected sales. The company said Leet would help its chief executive, Bill Ford, and senior management "in exploring a broad range of strategic alternatives for the company. It is prudent in a time of rapid change in our industry for us to carefully examine all of our options."
Ford has been suffering from dwindling market share in the face of a sales onslaught from Asian rivals led by Japan's Toyota Motor. Sales figures for July showed that Toyota accelerated past Ford for the first time to make the Japanese giant the second most popular automaker in the U.S. market, behind GM.
Hobbled by onerous employee overheads, Ford has also been hit hard as sky-high fuel prices erode sales of its pick-up trucks and sport utility vehicles (SUVs).
More bad publicity came Aug. 3 with news that Ford, in one of the largest vehicle recalls in U.S. history, is recalling 1.2 million trucks, SUVs and vans because of concerns about potential engine fires.
Copyright Agence France-Presse, 2006