Ford reports 4th quarter net loss of $5.9 billion
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.
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Financial Results Summary |
Fourth Quarter |
Full Year |
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|
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) |
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|
|
|
|
|
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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) |
Reader Comments (Page 1 of 3)
slicecom 12:02PM (1/29/2009)
What will all the Ford humping autoblog fans say to this?
Reply
mapoftazifosho 12:03PM (1/29/2009)
Um, there is nothing to sugarcoat, but no automaker is much better shape...
So, get over your Ford hatred and move along...
slicecom 12:05PM (1/29/2009)
I don't hate Ford, I just don't think they deserve all the praise they've been getting lately.
zamafir 12:10PM (1/29/2009)
I do. They're the only American automaker actually trying. Give me a call when GM releases a car the size of the Fusion that gets better fuel economy, hell or even better than the camry, hell or any other serious car maker. Oh. Oh Now I see why people are rooting for Ford, they're running their company like a business.
Yaroukh 12:28PM (1/29/2009)
OMG, what would we say? Do you think a Ford-fan is that dumb to think there will be no more losses for FoMoCo?
Mazda FTW! 12:29PM (1/29/2009)
zamafir - I always respect your opinion, you prob know that. However, I wouldn't say GM isin't trying either. GM is simply a bigger beast. You are effectively comparing Honda to Toyota (in terms of size).
The Other Bob 12:39PM (1/29/2009)
"Give me a call when GM releases a car the size of the Fusion that gets better fuel economy, hell or even better than the camry,"
What's you phone number? The Malibu gets better mileage than the Camry.
Sea Urchin 12:41PM (1/29/2009)
zamafir - I always DISrespect your opinion, you prob know that. ---Just kidding.
But you are right, GM is not trying. Their CEO is corrupt, as is board of directors. They have been promoting Camaro for 4 years now, with a sole intent of keeping the public off management. They basically tell the public YEARS ahead about their product just to keep their jobs.
zamafir 12:51PM (1/29/2009)
Thanks for the fact check bob, I forgot to add the hybrid :). I think Ford is doing a lot that Chrysler and GM are not, Ford's bring cars that compete directly with Toyota to market now, across the board, GM's putting most of their future hopes in the VOLT, it's a dramatically different approach to this crisis.
Mazda, yes they're a lot bigger, but that's really a result of GM's deliberate actions. remember how much we all prated when they purchased SAAB, and everyone else in the 90s, remember how much we were curious if uncountable sales simply to keep Toyota in check were helping the bottom line? GM needs to shrink, by leaps and bounds yes, but they also need better management. Every time Lutz or Wagner get up there, then I hear Mulally, it's clear to me which company is going to be returning to the black. I wont stop saying this, GM needs to higher a CEO with a current track record of fixing a massive company, as Mulally had with Boeing before Ford hired him.
Sea Urchin 12:51PM (1/29/2009)
Other Bob, Malibu gets 1 MPG more than Camry. If that is a victory in your eyes, so be it.
If GM wants to legitimize its product it need to be far better and at a lower price.
JF 12:55PM (1/29/2009)
zamafir,
The Malibu 4 cyl/ 6-speed gets 33 mpg hwy, which better'd the Camry and Fusion (until the 2010's, where it ties the Camry and is 1 mpg behind the Fusion). So yes, GM is trying, please do a little more research.
G-Meister 1:02PM (1/29/2009)
Zamafir- the bigger Malibu (22/33 city/hwy) beats the Fusion (20/29) pretty handily, actually leads the segment. Even with the entry level 4speed (should just be dropped) it still bests the Fusion.
j 3:06PM (1/29/2009)
@mapoftazifosho:
in case you missed this:
"This will be the third consecutive year Ford hasn't posted a profit"
So yeah, no car company is doing well right now, but there were plenty of them doing well in years prior.
caddy-v 4:00PM (1/29/2009)
Excuse me Sea Urchin, but once again a correction is needed to counter your babble.
The Camaro was introduced as a concept in 2006 and will be on sale within the next four to six weeks. Unless I forgot everything I know or was taught about math, that's three years from concept to reality.
You claim GM's ceo and board are corrupt. Care to elaborate on this and give us some facts? Or are you just angry because two of the board members drive pick-ups and their wives don't have double chins like you've previously spewed.
Sea Urchin 4:09PM (1/29/2009)
CADDY V, Wagoner became a CEO in 2000, by 2009 the company was dead. Yes, dead, if gov did not bailout GM the company would be in CH 7.
Between 2000-2009 Wagoner was getting paid 17+ mill a year every year and had a complete support of the board. For 9 years he was killing the company while making millions (let's not talk about other perks)
If that is not criminal i don't know what is.
Randy 9:06PM (1/29/2009)
Note gonna get in the middle of this one BUT
1. Ford expected the loss!
2. EVERYONE expected the loss
3. Ford is the only one to GAIN US market share 3 months in a row!
I think that's momentum! They've said 100 times that they won't be profitable until 2010 or whatever it was!
With the launches of their cars this spring, the momentum will severely swing in Ford's favor! Mark VIII my words! ;)
Judy Zik 12:16AM (1/30/2009)
As opposed to who? What major car maker out there is making a profit?
Ford even let the world plus dog know years ago that they weren't expecting to turn things around until 2010. Not good to see them going through cash that fast but with the products they have coming it is pretty obvious they are headed for a great turn around.
@ Gmeister
You might want to update your information. The new 2010 Fusion 4 cylinder with an automatic gets 23 City/ 34 Highway. That beats the Malibu though not by much. The new Fusion Hybrid is 41 City as compared to the 26 City a Malibu "Hybrid" gets. That is an embarassing difference. As for the Malibu being "much larger" they are the same size and class. The current Fusion has 4 cubic feet more passenger volume and 1 cubic foot more luggage room according to the EPA. The Malibu is a great car (except for the why bother hybrid version). I would certainly take a "bu" over a Camry but I would take a new Fusion over either.
G-Meister 4:48PM (1/30/2009)
Judy- if Ford managed to up their numbers, then I will stand corrected. My info was based on a quick Edmund's comparison of 2009AT 4cyl's. I know the specs are about the same, but the Malibu sits on a longer w/b and just felt bigger inside (autoshow last weekend)
Note- the Manual trans Fusion Ford had at the show seemed to have no transmission connected to the shifter... odd..
Allen 12:13PM (1/29/2009)
Of the D3, Ford posted the least abount of sales loss last quarter, things are going to be ugly accross the board. Analysts are predicting the market to bounce back late this year or early next year, hopefully the D3 can survive until then.
Reply
Steven 12:18PM (1/29/2009)
Ford Europe make cars people want.
Reply