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Wed, Oct 25, 2006 - Page 10 News List

Struggling Ford Motors posts huge quarterly losses

AFP , DEARBORN, MICHIGAN

Struggling US auto giant Ford Motor Co on Monday posted a mammoth third-quarter net loss of US$5.8 billion as restructuring costs hammered its earnings.

Ford also revealed it would restate results from 2001 through to this year's third quarter, "to correct the accounting for certain derivative transactions" by its consumer credit division.

Ford's newly appointed chief executive, the former Boeing executive Alan Mulally, said that the results were "clearly unacceptable" and vowed to manufacture more of the smaller, fuel-efficient vehicles pioneered by Japanese automakers.

Mulally, in an interview with trade publication Automotive News published after the earnings report, ruled out an alliance with Renault-Nissan in the near term.

The Ford CEO was quoted as saying that such a partnership would send Ford in the "wrong direction" as it would distract the company from its restructuring plan.

Mulally said he has had no contact with Renault-Nissan CEO Carlos Ghosn but Ford could consider alliance talks in the future -- "but right now I like our focus."

Ford's loss for the third quarter ending Sept. 30 included heavy provisions for its hard-hitting restructuring plan, which foresees 16 plant closures in North America and the elimination of 45,000 jobs by 2008.

Excluding those provisions, its loss came to US$1.2 billion, compared to US$191 million before exceptional items a year earlier.

That translated into a loss of US$0.62 per share, a penny more than Wall Street's average forecast of US$0.61.

The Ford group's turnover in the quarter was down 6.0 percent at US$32.6 billion.

Ford said its poor performance in the past three months reflected "operating challenges" in North America, Asia-Pacific and Africa, and its Premier Automotive Group (PAG) division.

PAG, comprising Jaguar, Volvo, Land Rover and Aston Martin, had a pre-tax loss of US$593 million in the third quarter, up from US$108 million a year before. But Ford said its European operations should turn a profit this year.

Ford said in August it was looking to sell Aston Martin, immortalized by fictional spy James Bond.

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