Ford loses US$5.9 billion in fourth quarter, says it still won't seek aid
Ford Motor Co. said Thursday it lost US$5.9 billion in the fourth quarter as auto sales slumped, but it has no plans to seek federal aid unless economic conditions worsen.
The second-largest U.S. automaker said it burned through $5.5 billion in the quarter, less than the $7.7 billion it used in the third quarter.
The company said it lost $2.46 per share, compared with a loss of $2.8 billion, or $1.13 per share, for the year-ago period.
Revenue fell to $29.2 billion from $45.5 billion in the fourth quarter of 2007.
Ford's figures missed Wall Street's expectations. Excluding special items, the company reported a $1.37 per share loss for the quarter. Analysts polled by Thomson Reuters, on average, expected a fourth-quarter loss of $1.30 per share on revenue of $26.3 billion.
Dearborn-based Ford also announced that its credit arm would cut 20 per cent of its work force, or 1,200 jobs, and it has reached agreement with the United Auto Workers union to end the ``jobs bank'' in which laid-off workers get most of their pay, although the effective date is still being negotiated.
Company spokesman Mark Truby said Ford's position on seeking federal loans is unchanged. The company has asked for a $9-billion line of credit from the government but has said it has enough cash to make it through 2009 and doesn't intend to use government loans unless conditions worsen.
``We don't plan to or foresee using it,'' Truby said Thursday.
The Treasury Department made loans to Ford's U.S-based competitors, allocating $13.4 billion to General Motors Corp. and $4 billion for Chrysler LLC.
Ford said it had $13.4 billion cash on hand as of Dec. 31 and it plans to exercise a $10.1 billion secured credit line Tuesday.
Chief financial officer Lewis Booth said the company is tapping the credit line only to make sure it's available and not to fund operations.
``We are confident that our burn rate will be substantially slower in 2009,'' he told reporters Thursday morning.
For the full year, Ford reported a net loss of $14.6 billion, compared with a loss of $2.7 billion in 2007.
Vehicle sales in the U.S. are at their lowest levels in 26 years as consumers face tight credit markets and economic uncertainty, with Ford's U.S. sales dropping 20.5 per cent in 2008 and its market share falling slightly to 15 per cent from 15.4 per cent in 2007.
That uncertainty has spread to Europe as well, where sales are beginning to fall. Markets such as South America, that were once a bright spot for Ford, are also slowing.
