FORD USA $9Billion Loss

[csv8]

FORD has announced plans to accelerate its vast restructuring plan after the auto giant posted its worst quarterly loss in history.

The carmaker has now lost nearly $US24 billion ($25bn) since 2006 and recently backed off plans to return to profitability by 2009 as high fuel prices and a weak US economy have substantially cut demand in its home market.

This latest revision to Ford's restructuring plan includes a small-car and fuel-efficiency offensive in reaction to what the carmaker considers a permanent shift away from petrol-guzzling pick-up trucks and large sport utility vehicles (SUVs).

Ford would also accelerate plans to streamline its global operations and will reduce the number of vehicle platforms it offered to nine from 25, Ford president and chief executive Alan Mulally said.

"We continue to take fast and decisive action implementing our plan and responding to the rapidly changing business environment,'' he said.

"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.''

Ford said it was speeding up its reorganisation in North America "because of deteriorating economic conditions'' that have hurt demand for cars and due to "a significant shift'' away from large pickup trucks and traditional SUVs.

In addition to bringing six small vehicles to North America from its European line-up, 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 truck and SUV plants to small-car production, beginning in December.

Ford's US sales fell 28 per cent in the first six months of the year while overall sales were down 16 per cent.

The $US8.7 billion loss in the second quarter was largely due to hefty charges as Ford wrote down the value of its assets and recognised losses from auto-leasing.

Excluding special charges, the operating loss was $US1.0bn for the second-largest US automaker, or US64 cents per share, far steeper than Wall Street estimates of a loss of US27 cents a share.

Investors punished Ford, pushing shares down 15.5 per cent to $US5.11.

"The last quarter has certainly been a challenging one for the entire automobile industry,'' Mr Mulally said.

"We also believe we're uniquely positioned to respond to the new environment in which we expect to operate in the years ahead.''

[cob115]

its not good at all,plus throw in a few years of labour running Australias econmy ,were 100% snaffood

[TOASTED]

gees thats not a good sign...

[|||]

they've lost the plot big time. maybe a quick death would be better than years of decline. if the best they can do is lose $24b in two years they should give up on making cars and find something they dont suck at quite so much.

[sleekism]

Originally Posted by |||

they've lost the plot big time. maybe a quick death would be better than years of decline. if the best they can do is lose $24b in two years they should give up on making cars and find something they dont suck at quite so much.

Hmmm maybe get back into building tractors, trucks and military equipment for Nazi Germany.

I honestly think Ford NA should be more like Dodge and concentrate on making pickup trucks and muscle cars.

Ford NA loses money on passenger cars and makes money on pickups and SUV's. Simple maths really.

They should import their passenger vehicles from Europe and stick to what they are best at.

[Whitey-AMG]

Ford.....like GM are just too slow to react to critical market signs.

Toyota are already investing in AU for their increased MASS production of their Hybrid platforms. They are investing in their future right NOW. HONDA already have their CIVIC Hybrid sorted as well.

ECOBOOST is a SHORT TERM / SHORT sighted band aid approach which may slow the sales decline for FORD in the REAL short term but unless they get their $%^& together and start investing heavily in alternative technologies that people can buy TODAY........then there won't be a need for a FORD Business plan for the next 5 - 10 years because EVERYBODY will buying TOYOTAS.

[NIK516]

agreed they dint get out of the blocks fast inof.

to tell you the truth GM was the first car maker to get out of the blocks with the EV1 full electric car , that sold so well that the big oil companys told GM to get rid of them all to maximize profit of there petrol cars.

now at the same time toyota and honda saw what gm was doing and dint want to get left behind so they created there own hybrids but they stuck to them and are now bringing in the big bucks.

gm has now said that killing the EV1 was one of its biggest mistakes and is trying to make up for it with the VOLT.

as for ford nothing nothing and more nothing its like it is just ignoring the tornado calls and just keeps on walking.

how sad really

[steve.zissou]

I have this bad feeling that ford will just kill off a large proportion of its Large car and SUV line up and go for the small eco market........ in exactly the same way every other manufacturer has done.
Small, relativly heavy, FWD.
So they are going to try and make money by competing with the likes of Honda/Toyota/Mazda... I dont think so - not in NA anyway.

How is this for a crazy idea - create a meaningful point of difference. Maybe go RWD on most models (like BMW). No one has a corolla equivilent RWD and if you did it well you would sell heaps with a proper performance pedigry.
Just Think - RWD Focus/Mondeo. with displacement on demand V6 and an option for a couple of electric motors (in the font hubs?).

Any way, it wont happen. I better get back to ensuring my business doesn't go down the same path.

[ea90gl]

Did anyone grab the latest wheels, its not only Ford that have recorded huge losses recently, couple Ford with GM (losing the biggest amount), Chrysler, heck even Toyota lost. This is in the US which has a huge auto market, you can see it on page 26 of the latest wheels. Who knows it all might be BS but it wouldnt surprise me if true, and its obvious that its not the actual cars themselves from each manufacturer that are the ones to blame (ok maybe some) but its all due to the pathetic prices of petrol. And at this point focusing more on large performance cars and big SUV's is probably the silliest thing to do

[XWGT]

Originally Posted by jrckelley

I have this bad feeling that ford will just kill off a large proportion of its Large car and SUV line up and go for the small eco market........ in exactly the same way every other manufacturer has done.
.

Announced today. 25 platforms down to 9. Out of large 4WD and SUV market.

Some related linkage

http://www.independent.co.uk/news/bu...et-876954.html

[burnz]

well the USA is in recesion according to greenspan.
and a lot of company's including car maker's are/will be in hot water.
so depending on the banking/investor sector will determine wether they will servive.

[janddbone]

Around $8billion of that loss is Ford writing down various assets that were simply overvalued...

The 'real' loss in automotive terms of a bit over $1billion is actually quite impressive considering all that the company has been doing.

Just look at the Ford website to download the report and see the real story and lose all the media hype...

[xdc351]

Originally Posted by mr_br_johnstone

Around $8billion of that loss is Ford writing down various assets that were simply overvalued...

The 'real' loss in automotive terms of a bit over $1billion is actually quite impressive considering all that the company has been doing.

Just look at the Ford website to download the report and see the real story and lose all the media hype...

Was about to say the same thing, good call.

Considering everything I'd say they've done OK... but they shot themselves in the foot years ago when they abandoned the RWD platform for their large cars in the US. Just look at how well thats worked for local car makers in AUS... cutting costs at the expense of customer appeal is a death knell most of the time.

[mik]

big dollars Ford lost, Gm lost 38 billion last year, not a good time for us car companies.

[SSbaby]

Ford might look bad (on paper) but their plight is better than GM's (from some reports I've read).

Don't forget, Ford can still sell off some non-core assets (like Volvo) and their revenue appears to be equal to or better than GM's atm.

http://www.autoextremist.com/current...rants-455.html

All is not lost.

[Jayden]

Fire all the accountants and put the designers on the task of making a perfectly balanced and good looking range. I dont know what they are smoking but Ford is one of these companies that failed the transition from Cronies in charge to politically correct modern company. They probably blow half their budget putting board meetings together to see what features like IRS and aesthetically pleasing suspension they can omit from their cars so they can add another door chime and plastic side bling.

They should consult with trusted car enthusiasts in other words. Using Euro is a good start that I hope works for their sake.

[ebxr8240]

From I have heard Toyota actually lose money on the Hybrid.. But its good publicity to have this vehicle on their fleet..Brings people into buy the Corolla etc.. Though I guess with the way things have gone, selling so many they may actually make money the last 6 months or so ??

The U.S and here with small cars the issue maybe labour and over heads ?? In that they have trouble competing selling a 4 cylinder car around $10/ 15K U.S ?? They need a platform where two or three derivatives can be produced...So production lines can stay the same for each vehicle be it SUV or econo box...

[DanielXR8]

Here is hoping Ford don't give the order to the colonies to strip the Falcon and Territory of anything that costs money (decontent people!), in a vain effort to get more cash from Ford Australia. Would be the final nail in the coffin for both cars in the current market.

[FoMoKid]

Originally Posted by sleekism

I honestly think Ford NA should be more like Dodge and concentrate on making pickup trucks and muscle cars.

Ford NA loses money on passenger cars and makes money on pickups and SUV's. Simple maths really.

They should import their passenger vehicles from Europe and stick to what they are best at.

But that is the reason, as far as i can see, why they have ended up in this position, they relied too much on selling the SUV and trucks to stay in profitablity, but increasing fuel costs and stagnating development, increasing envirnmental concerns and stagnating development and a sprinkling of nationwide economic downfall has led to this. Let's just hope they get out of it as quick as possible with little damage to their outposts ie Australia

[gcg2503]

Originally Posted by Jayden

Fire all the accountants and put the designers on the task of making a perfectly balanced and good looking range. I dont know what they are smoking but Ford is one of these companies that failed the transition from Cronies in charge to politically correct modern company. They probably blow half their budget putting board meetings together to see what features like IRS and aesthetically pleasing suspension they can omit from their cars so they can add another door chime and plastic side bling.

They should consult with trusted car enthusiasts in other words. Using Euro is a good start that I hope works for their sake.

Interesting idea...not sure how long the company would last with your management and control structure though!

:

[Bossxr8]

Originally Posted by DanielXR8

Here is hoping Ford don't give the order to the colonies to strip the Falcon and Territory of anything that costs money (decontent people!), in a vain effort to get more cash from Ford Australia. Would be the final nail in the coffin for both cars in the current market.

Its done all the time, Ford are the champions of discontenting. Things come and go all the time. Usually things appear in the new model, then dissapear over the next 2 years only to be bought back as a "new" feature for a Mk II version.

[mustang70]

Originally Posted by cob115

its not good at all,plus throw in a few years of labour running Australias econmy ,were 100% snaffood

Labour have never been a political party in Australia, in the UK yes,not here. Labor perhaps? your wisdom means so much, you political genius...

[cool65]

General Motors has posted a $US15.471 billion ($A16.45 billion) net loss for the second quarter of 2008.

Anything Ford can do .....

[Bent8]

When you consider the US dollar has lost nearly half it's market value since 2000, it comes as no surprise really, the car makers are not the only one's struggling to stay afloat...