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International News>Ford losses climb to record US$12.7b |
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DEARBORN, Michigan (AP): Ford Motor Company lost $5.8 billion (€4.47 billion) in the fourth quarter amid slumping sales and huge restructuring costs, pushing the fabled automaker's deficit for the year to US$12.7 billion (€9.79 billion), the largest in its 103-year history.
The annual loss reported Thursday surpassed its previous record for a year of US$7.39 billion (€5.69 billion) set in 1992.
The 2006 loss amounted to US$6.79 (€5.23) per share versus a profit of US$1.44 billion (€1.11 billion), or 77 cents a share, in 2005.
It was far from the largest quarterly or annual corporate loss on record - the company now known as Time Warner Inc. reported a US$97.2 billion (€74.9 billion) loss in 2002, largely due to new accounting rules about how to value assets. Ford could not rely on accounting rules, however, for its staggering total, which represented a loss of US$4,380 (€3,375) on each car or truck they sold in 2006.
GENERAL MOTORS CORP. LOSS
Ford's loss also did not surpass the worst such annual total in the auto
industry. General Motors Corp lost more than $20 billion (€15.41
billion) in 1992.
Dearborn-based Ford expects more losses for this year. It expects to burn up US$10 billion (€7.71 billion) in cash on automotive operations through 2009 and spend another US$7 billion (€5.39 billion) to invest in new products.
The fourth-quarter loss was the worst final-quarter loss in Ford's history and its second-worst quarterly performance.
The fourth-quarter loss was the worst final-quarter loss in Ford's history and its second-worst quarterly performance. Ford lost US$6.7 billion (€5.16 billion) in the first quarter of 1992, due mainly to accounting rule changes on health care liabilities.
"We began aggressive actions in 2006 to restructure our automotive business so we can operate profitably at lower volumes with a product mix that better reflects consumer demand for smaller, more fuel-efficient vehicles," Alan Mulally, president and chief executive officer, said in a statement. "We fully recognise our business reality and are dealing with it. We have a plan and are on track to deliver."
Excluding special items, Ford lost US$1.50 (€1.16) per share in all of 2006, worse than Wall Street predicted. Fourteen analysts polled by Thomson Financial expected a loss of US$1.35 (€1.04) per share for the year, excluding special items.