News - Ford
Massive loss is unacceptable, says FoMoCo
Ford chiefs explain the Blue Oval's $US5.8 billion third-quarter loss in the US
27 Oct 2006
By TERRY MARTIN
THE Ford Motor Co’s new president and chief executive officer Alan Mulally was in the spotlight this week as he announced that the American auto giant had posted a $US5.8 billion ($A7.6 billion) loss for the third quarter ending September 30, 2006.
"Operating challenges" in North America, Asia-Pacific and Africa (which includes Australia) and Premier Automotive Group operations were deemed largely responsible for the loss, which compared with a net loss of $US284 million in the 2005 third quarter.
North American job-cut related expenses, and writing down the value of production facilities ahead of plant closures, exacerbated the result, while Jaguar and Land Rover assets also underwent revaluation to the tune of $US1.6 billion.
"These business results are clearly unacceptable," Mr Mulally said.
"We are committed to dealing decisively with the fundamental business reality that customer demand is shifting to smaller, more efficient vehicles.
"Our focused priorities are to restructure aggressively to operate profitably at lower volumes, and to accelerate the development of new, more efficient vehicles that customers really want."He also told US media that it would not seek an alliance with Renault-Nissan,which remains on the lookout for a North American partner after talks with General Motors collapsed earlier this month.
Ford’s Asia-Pacific and Africa unit reported a pre-tax loss of $US56 million, compared with a pre-tax profit of $US21 million a year ago.
According to Ford, the decline primarily refl ected "lower production and dealer inventories, adverse mix, and higher incentives, partially offset by cost reductions".
Sales were $US1.6 billion, compared with $US1.9 billion in 2005.
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