Beleaguered automaker Ford Motor Co. (F) Thursday reported a wider loss for the fourth quarter, amid the ongoing downturn in the industry. The company confirmed its 2011 outlook and said it does not need a bridge loan from the U.S. government, based on its current planning assumptions. Meanwhile, Ford Motor Credit, Ford's financing arm, announced a restructuring in its U.S. operations, including the elimination of about 1,200 staff and agency positions.
Ford's fourth-quarter net loss was $5.88 billion or $2.46 per share, compared with a net loss of $2.81 billion, or $1.33 per share, in the fourth quarter of 2007.
On an after-tax basis, fourth-quarter operating loss from continuing operations, excluding special items, widened to $3.3 billion, or $1.37 per share, from $487 million, or $0.23 per share, a year ago.
On average, 10 analysts polled by First Call/Thomson Financial expected the company to report a loss of $1.30 per share for the quarter. Analysts' estimates typically exclude special items.
Excluding special items, Ford's fourth-quarter revenue totaled $29.2 billion, down from $45.5 billion a year ago. Including items, revenue for the quarter was $44.1 billion. The revenue decline was primarily due to lower volume, the sale of Jaguar Land Rover and exchange translation. Analysts had a consensus revenue estimate of $27.07 billion for the quarter.
Meanwhile, Ford Motor Credit reported fourth-quarter net loss of $228 million, compared with a profit of $186 million a year earlier. On a pre-tax basis, Ford Motor Credit's loss was $372 million, versus earnings of $263 million in the previous year quarter. The decrease in fourth-quarter pre-tax earnings primarily reflected a higher provision for credit losses, higher net losses related to market valuation adjustments to derivatives, lower volume, and lower financing margin, the company noted.
Commenting on the results, Ford President and CEO Alan Mulally said, "Ford and the entire auto industry faced an extraordinary slowdown in all major global markets in the fourth quarter that clearly had an impact on our results."
"We continued to take the decisive actions necessary to lower production to match the lower worldwide demand and reduce costs, which we expect will allow us to significantly reduce negative operating cash flow in 2009 and position Ford for growth when the economy rebounds," Mulally noted.
The company also announced that the United Auto Workers union has agreed to end the "jobs bank" at Ford, known as the Job Security program. The company and the union presently are working out the details of implementation.
The company also said that it is drawing its available credit lines, due to concerns about the instability of the capital markets with the uncertain state of the global economy. The company expects to receive the funds on February 3 and will add the $10.1 billion to its cash and reflect it on its first quarter 2009 balance sheet.
Further, Ford confirmed that, based on current planning assumptions, it does not need a bridge loan from the U.S. government, barring a significantly deeper economic downturn or a significant industry event, such as the bankruptcy of a major competitor that causes disruption to the company's supply base, dealers or creditors.
Meanwhile, Ford Motor Credit said it is restructuring its U.S. operations to meet changing business conditions, including lower auto sales and the planned reduction in Jaguar, Land Rover and Mazda receivables, and to maintain a competitive cost structure. The restructuring will affect servicing, sales and central operations and eliminate about 1,200 staff and agency positions, or about 20%. The reductions will occur in 2009 through attrition, retirements and involuntary separations.
Going ahead, Ford said it is remains on track for both its overall and North American Automotive pre-tax results excluding special items to be breakeven or profitable in 2011, based on current planning assumptions.
Ford also anticipates weak volumes this year across all markets, with worldwide sales down more than 10%.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.