Ford has so far been able to avoid suckling on the teat of the federal government like its cross-town rivals, but after today's announcement of a 2008 fourth-quarter loss of $5.9 billion, serious questions are beginning to arise about how FoMoCo will fair in 2009.

This will be the third consecutive year Ford hasn't posted a profit, with a $2.8 billion loss in the previous year and $620 million drop during the same quarter of 2007. Ford wrapped up 2008 with $13.4 billion in cash reserves, but has announced plans to draw $10.1 billion in available credit to weather what's sure to be a rough 2009. That would bring Ford's liquidity up to $23.5 billion, sans the money already used for January, and the automaker contends that this is enough to meet its goals for the year. However, if Ford continues its fourth-quarter cash burn rate of $1.83 billion a month, there's a distinct possibility that FoMoCo execs might be knocking on Uncle Sam's door before the year comes to a close.

On a more positive note, Ford posted a 2008 pre-tax profit of $1.06 billion in Europe, although the last quarter saw a drop of $330 million. Hit the jump for Ford's full press release.

[Source: Ford, Photo by Joe Raedle/Getty]


PRESS RELEASE

FORD REPORTS 4TH QUARTER 2008 NET LOSS OF $5.9 BILLION; GAINED MARKET SHARE IN U.S., EUROPE, ACHIEVED COST TARGET
  • Net loss of $5.9 billion, or $2.46 per share, for the fourth quarter of 2008 amid a sharp global decline in vehicle demand; pre-tax loss of $3.7 billion from continuing operations, excluding special items. ++
  • Reduced Automotive costs by $1.4 billion in fourth quarter and $4.4 billion in 2008 versus year-ago levels. Achieved $5.1 billion in North America cost reductions at year-end 2008 compared with 2005, excluding favorable impact of depreciation and amortization from asset impairment at the end of the second quarter.
  • Decisively reduced global dealer stocks by more than 50,000 vehicles compared with the third quarter. Ford now has among the lowest days' supply in the industry.
  • Product transformation continues to gain strength, helping the company to gain market share in Europe for fourth quarter and full year, and in the U.S. in the fourth quarter.
  • Total liquidity of $24 billion, including Automotive gross cash of $13.4 billion, at Dec. 31, 2008. +++
  • Ford is drawing its available credit lines due to concerns about the instability of the capital markets with the uncertain state of the economy. The $10.1 billion will be added to company cash for the first quarter 2009.
  • The United Auto Workers union has agreed to end the "jobs bank" at Ford. The company and the union are presently working out the details of implementation.
  • Based on current planning assumptions, Ford has sufficient Automotive liquidity to fund its business plan and product investments and does not need a bridge loan from the U.S. government.
  • Ford remains on track for both its overall and its North American Automotive pre-tax results to be at or above breakeven in 2011, excluding special items.

Financial Results Summary

Fourth Quarter

Full Year

2008

O/(U) 2007

2008

O/(U) 2007

Wholesales (000) ++

1,138

(505)

5,404

(1,149)

Revenue (Bils.) ++

$ 29.2

$ (16.3)

$ 139.3

$ (34.6)

Continuing Operations ++

Automotive Results (Mils.)

$ 3,279)

$ 2,390)

$ (6,203)

$ (5,105)

Financial Services (Mils.)

(384)

(653)

( 495)

(1,719)

Pre-Tax Results (Mils.)

$ (3,663)

$ 3,043)

$ (6,698)

$ 6,824)

After-Tax Results (Mils.)

$ (3,273)

$ 2,786)

$ (7,119)

$ 6,695)

Earnings Per Share ++++

$ (1.37)

$ (1.14)

$ (3.13)

$ (2.92)

Special Items Pre-Tax (Mils.)

$ (1,386)

$ 2,466

$ (7,605)

$ (3,733)

Net Income

After-Tax Results (Mils.)

$ (5,875)

$ (3,064)

$ (14,571)

$ (11,848)

Earnings Per Share

$ (2.46)

$ (1.13)

$ (6.41)

$ (5.03)

Automotive Gross Cash (Bils.) +++

$ 13.4

$ (21.2)

$ 13.4

$ (21.2)