Filed under: Ford, Earnings/Financials
BREAKING NEWS: Ford reports loss of $123 million
Gas prices have SUV sales taking a huge hit, and employee buyouts are expensive, to sum up what Ford Motor Company said as it reported its less-than-stellar second-quarter, a period for which the automaker posted a $123 million loss. Ford's sales for the second quarter of 2006 are down 7 percent over the same period last year, making it difficult for the company to overcome the costs of trying to close 14 plants and cut its ranks by 30,000 workers.
The loss will likely prove to be a tough pill for Wall Street to swallow compared with its $946 million profit posted second quarter of last year. Ford chairman and CEO William Clay Ford, Jr. indicated that the company would be ready to discuss further turnaround measures within the next 60 days.
[Source: Reuters via Automotive News]
Reader Comments (Page 1 of 3)
Ken 9:45AM (7/20/2006)
I think Billy Boy needs to take Carrie Underwood's song to heart and have "Jesus Take the Wheel". I'm a ford guy through and through, but it's painfully obvious him and his buddy Mark Fields are a little overwhelmed. They're gonna kill the Town Car, a pure profit machine, and give that business to DCX with the stretched 300C? What a sad situation in Dearborn. Bill is running the company as successfully as he and his father have run the Detroit Lions the last few decades.
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JarryHames 9:46AM (7/20/2006)
But stupid Ford keep on making those horrible SUVs.
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Oliver 10:00AM (7/20/2006)
Ah Mr. Hames.....earth to Mr. Hames. Ford makes awesome SUVs. Have you heard of Land Rover? Land Rover is Ford's most profitable division. The only division that is in the black. Kudos to the Brits!
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Ken 10:08AM (7/20/2006)
Jarry,
What do you mean they keep making "Horrible SUV's"? Yes, they keep making SUV's, but they're not horrible. I just ordered a 2007 Expedition. If Ford does anything right, it's making trucks. Sure gas prices hurt sales of big trucks and SUV's, but that doesn't mean those trucks are 'Horrible'. Now get in your just recalled AGAIN Prius and go away!
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sanjay 10:09AM (7/20/2006)
Ford is one of the worst companies out there maybe they should look into dropping some of the crappy lines like mercury and mazada. Also they might want to partner with a Japanese Maker like Honda. Imagine that Honda and Ford and GM/Nissan, Toyota will have to do its best to keep the spot as best auto maker. Plus the Americans need to stop making cars in Mexico and Canada and start making cars in America like the Japanese Manu. Only good line of American cars are the Cadillac, Corvette, Mustang, 300c. Everything else sucks. FORD SUCKS.
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Aaron 10:16AM (7/20/2006)
Ken,
It sounds like you’re bitter that the Prius gets better mileage and doesn’t depreciate. Let’s see how much your Ford will fetch in 3-5 years when your wife realizes that you can’t afford the soccer mom image anymore with 4-5 dollar a gallon gas prices.
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Ken 10:32AM (7/20/2006)
Aaron,
Not everyone buys their vehicles based on what "image" they portray.I buy for size and comfort. Now tell me something: Between the Prius and Expedition, which MPG posted on the sticker is more accurate? Maybe Ford needs to take the hybrid approach on their gas mileage "estimates". Maybe post 25 MPG and let the customers find out once they buy them that in the real world they only get 14?
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Will 10:43AM (7/20/2006)
Ken-
A Prius is no different if we are on the discussion of highly inflated EPA numbers. Most reports I have read state that the Prius can't even come close to the highway rated mileage on the sticker.
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infinihertz 10:50AM (7/20/2006)
Slightly more on-topic, as pessimistic as people are being about this news, Ford's North American operations are reporting less of a loss than the same quarter last year. Much of the reason for the overall corporate loss is because of Jaguar, Volvo and less income from Ford Credit financing. North American losses were $797m instead of $907m in Q2 2005, even with all the restructuring. A loss is a loss, but with $23.6 billion in cash to hold them over, if they keep improving, they'll reach profitability. Just not for another year or so, which is what they've been saying since January.
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Shoeman 10:54AM (7/20/2006)
Oliver - Comment #3:
Are you sure only LR is in the black ... I could have bet Mazda was, too ... possibly deeper into the black. Can't find a detailed/breakup of the financials, though.
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Will 10:57AM (7/20/2006)
Sorry, that should have been directed at Aaron.
I also find the hybrid depreciation aspect amusing. What value will a hybrid have when the batteries are worn out?
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Ryan 11:16AM (7/20/2006)
"10. Sorry, that should have been directed at Aaron.
I also find the hybrid depreciation aspect amusing. What value will a hybrid have when the batteries are worn out?
Posted at 10:57AM on Jul 20th 2006 by Will 0 stars"
-Knowing Toyota's, probably MORE!!! :-)
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Glenn A. 11:18AM (7/20/2006)
"Sigh". C'mon, Will. It's been continually refuted here and elsewhere about Prius batteries. Read my lips. They will last the life of the car. That's 250,000 to 300,000 miles (something Toyota Corollas have been capable of for decades). Not so - Pintos, Vegas, Chevettes, Escorts, Omni-Horizons, AMC Alliance, Neons, Cavaliers, Foci (plural of Focus, right?).
NO, that is NOT ONE Prius hybrid battery has failed in the field - the car has been in production and for sale for 10 years now (at least, in Japan).
Not forgetting that until recently, Ford actually had some chance of future survival in the $4.50 per gallon scenario which is coming upon us fast - but now have possibly shot themselves in the foot by now saying "sorry, we won't be producing as many hybrids as we said we would by 2010". Dumb move, and it may be the straw that breaks the camels back bring Ford to its demise.
Yes, Ford is in big-time trouble. Dropping the Lincoln Town Car seems pretty damn dumb to me, from one perspective. Not forgetting the chassis dates from the down-sized full-sized Ford from 1979, though.
But - what if - there is no profit to be made for Ford in building them any more because most of the sales is to fleets? (Unlikely as that may be). Ford "could" have moved Town Car production to Canada alongside their other "Panther" frame cars (Ford Crown Vic and Mercury Marquis) and chose not to do so.
Under that circumstance, then Ford may be saying - hey, all of these Panther cars need to be replaced - let's utilize the development and engineering already done in Australia and retool a plant for a new bigger Lincoln with rear wheel drive, then replace the antiquated Panther cars down-market later. Could be...
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Rastus 11:45AM (7/20/2006)
Don't you all worry one little bit:
They can ALWAYS TUCK THEIR TAIL BETWEEN THEIR LEGS (there's nothing there to block it or otherwise prevent it) and get on all fours and BEG THE FRENCH FOR ASSISTANCE!!
Wow, and one think all this HOME BREW AMERICANA FLAG WAVING would bring the rednecks out in DROVES...STANDING ON THE STREET CORNERS WITH a "FEED THE AMERICAN AUTOWORKERS" bucket!!
What was that line in Oliver Twist?...
..."More??".
Woopsie Daisy...I forgot to buy an American POS!!! Oh My GOD, THEY KILLED KENNY!!! YOU BASTARDS!!!!
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Rob 11:47AM (7/20/2006)
Ford and GM both need to stop worrying about staying #3 or #1 or where ever they both sit, but downsizing and making money. They still haven't put out any cars that are competitive with Toyota or Honda and in my opinion Hyundai cars are quickly surpassing them in every aspect. Ford Fusion? Needs more V6 power and 6-speed manual to propel its image. The 500 is ugly and also underpowered. The Focus needs a major redesign as it suffers from the typical Ford 'build a nice car once and never update it, just assume the competition won't catch up or get better' attitude that killed the LS. I mean seriously Ford, use the euro Focus/Mazda 3 chassis before its to old to use, move the Focus upmarket a little and do what Toyota and Honda did, release another small car. (BTW does anyone else think the Honda Fit should have been named the CRX and have an Si trim with 160hp?) Also if you buy a $40,000 SUV and then complain about gas prices maybe you should worry more about your monthly payments. Face it, you couldn't really afford the SUV but wanted the image and stretched your finances so thin that the extra money to fill up hurts your bottom line. If an extra couple hundred bucks hurts you, you don't need that SUV. My truck gets 10 MPG (modified lightning) so I spent $3000 and bought a used motorcycle that gets 50mpg, now I can go all week on $12 worth of gas.
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Yaroukh 11:53AM (7/20/2006)
Oliver:
LR being the only one profitable? Try Google:
volvo profit 2005
mazda profit 2005
aston martin profit 2005
ford europe profit 2005
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glacia 12:42PM (7/20/2006)
It's not their SUVs that are the problem. It's that they realy don't have much else to offer the public.
One of the major problems Ford has with their lineup is categories. They seem to be going through the motions of filling categories with little thought as to who their customers are. They have no car for the majority of the public.
The 500 & Crown Victoria are the same car. It may not be possible for a car enthusiast to see that viewpoint. But they're both simply stodgy old man cars.
The Focus and Fusion are the same car also. Low end basic car.
The Shelby and Mustang are the same car. I would call them cars for 'those people'. I accept that some people want them but I don't know what to call them.
But what they don't have is a luxury car or a car for the middleclass who want a little more styling and sportiness (sportiness for the rest of us has nothing to do with HP, 0-60 nor is it a sportscar) nor do they have a car for the single person with a little more to spend (me). Many companies might call this a roadster but actually I think almost no car makers even know this market exists.
So they have old man cars, low end cars and nothing in between. Someone will bring up the Taurus that they discontinued but they really abandoned it years ago by letting it stagnate for over a decade.
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Frank 12:53PM (7/20/2006)
12. "Sigh". C'mon, Will. It's been continually refuted here and elsewhere about Prius batteries. Read my lips. They will last the life of the car. That's 250,000 to 300,000 miles (something Toyota Corollas have been capable of for decades). Not so - Pintos, Vegas, Chevettes, Escorts, Omni-Horizons, AMC Alliance, Neons, Cavaliers, Foci (plural of Focus, right?).
Posted at 11:18AM on Jul 20th 2006 by Glenn A.
"Sigh". C'mon Glen, this discussion was about Ford's quarterly loss, not about how your God Blessed Toyota Corolla or Prius can last over 250,00 miles. But since YOU brought it up I thought you might want to know that other cars (even those made by domestics makers) can last that long too.
One web site lists over 2200 Chrylser vehicles with over 200,000 miles:
http://www.allpar.com/old/club.html
That's one web site, I'm sure there are others for Chrysler. No telling how many such lists are out there for Ford and GM.
Here is just a sample listing listing from that page:
1989 Ply Horizon 5dr 223,000
1990 Dodge Omni 203,680
1993 Sundance/Duster 209,000
1990 Dynasty 259,745
1990 Spirit 323,000km
1987 Sundance 258,000
1997 Neon 262,000
Toyota makes a good car but don't go saying the other makes can't go X amount of miles without evidence, something I just provided to refute that.
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Frank 12:57PM (7/20/2006)
12. "Sigh". C'mon, Will. It's been continually refuted here and elsewhere about Prius batteries. Read my lips. They will last the life of the car. That's 250,000 to 300,000 miles (something Toyota Corollas have been capable of for decades). Not so - Pintos, Vegas, Chevettes, Escorts, Omni-Horizons, AMC Alliance, Neons, Cavaliers, Foci (plural of Focus, right?).
Posted at 11:18AM on Jul 20th 2006 by Glenn A.
"Sigh". C'mon Glen, this discussion was about Ford's quarterly loss, not about how your God Blessed Toyota Corolla or Prius can last over 250,00 miles. But since YOU brought it up I thought you might want to know that other cars (even those made by domestics makers) can last that long too.
One web site lists over 2200 Chrylser vehicles with over 200,000 miles:
http://www.allpar.com/old/club.html
That's one web site, I'm sure there are others for Chrysler. No telling how many such lists are out there for Ford and GM.
Here is just a sample listing listing from that page:
1989 Ply Horizon 5dr 223,000
1990 Dodge Omni 203,680
1993 Sundance/Duster 209,000
1990 Dynasty 259,745
1990 Spirit 323,000km
1987 Sundance 258,000
1997 Neon 262,000
Toyota makes a good car but don't go saying the other makes can't go X amount of miles without evidence, something I just provided to refute that.
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Steve 1:28PM (7/20/2006)
As it was stated earlier...Ford SUVs and Trucks are the one that that Ford does consistenly well. I own an Expedition Eddie Bauer, 2004, and it is great for trips with the family, trips to and from the hardware store, moving my son in and out of apartments (we were able to fit a full couch, nightstand, and all of his belongings in the SUV, as well as three people...on one trip...which is cheaper than using a smaller car and going multiple trips..), and its comfort and convenience are unmatched.
The New Expedition only improves on an already great vehicle...and i look forward to purchasing it. The gas mileage is something I new about when purchasing this car, but the convenience and benefits outweighed any reason to worry about gas costs. If you can afford to buy a $40,000 SUV than you can afford to pay for the gas...
Ford, however, could use a revamp of their small car lineup. My wife wanted a small feul efficient car, but Ford didn't give her the interior comfort and the refinement that her civic gives her. What ford should do is exactly what Rob said....bring the Euro Focus over here move it upmarket...and use the Ford Fiesta (which seems like a great competitor in the compact market) as their compact here in the U.S.
Ford uses these two cars in England and they top the sales charts in their repective categories....that must be why Ford of Europe is doing so much better...they have a broad range of products that are high quality and very appealing to the eye and the wallet....
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