News - Ford
Ford books record $US14.6b. loss
$8.5 billion in cash burned as Ford Motor Company fights global downturn
30 January 2009
FORD Motor Co burned through $US5.5 billion ($A8.52b) in cash in the final quarter of 2008 as it shed excess vehicle stocks while fending off the global financial crisis.
According to figures released in Detroit overnight, Ford’s quarterly net loss widened to $US5.9b ($A9.11b) in the December quarter, pushing its 2008 loss to a record $US14.6b ($A22.5b).
Blaming a sharp decline global vehicle demand for the outcome, Ford nevertheless says it will not need to dip into US government bridging loans.
It says it has total liquidity of $US24b ($A37b), and plans to draw $US10.1b ($A15.6b) in available credit lines immediately in case finance markets worsen this year.
Ford says it reduced global dealer stocks by more than 50,000 vehicles in the fourth quarter, giving it one of the lowest backlogs in the industry.
It said it remains on track to return to return to profitability in 2011.
The full-year net loss of $US14.6b ($A22.5b) compares with a loss of $US2.7b ($A4.1b) in 2007, and tops the previous record of $US12.6b ($A19.46b) in 2006.
Two of Ford’s most productive contributors to its balance sheet, Ford Credit and Ford Asia Pacific and Africa, failed to deliver their usual profits in 2008, with Ford Credit making a net loss of $US1.5b ($A2.3b), and Ford Asia Pacific and Africa slumping from a $US10m ($A15.46m) profit in 2007 to a $US208m ($A321m) loss in 2008.
Specific Ford Australia figures will not be released until the second quarter of this year.
Ford Credit, which made a profit of $US2.3b ($A3.55b) in 2007, announced plans to cut its US workforce by 20 per cent to help rein in costs.
Ford Credit axes buyer finance service
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