Ford Motor Co lost a staggering US$12.7 billion last year -- an average of US$1,925 for every car and truck it sold and the worst loss in the company's 103-year-history.
The company that invented the assembly line and whose name was a byword for the auto industry warned it will bleed cash for two more years before it has a shot at making money.
Ford's loss, reported on Thursday, came amid slumping demand for sport utility vehicles and other gas guzzlers and huge restructuring costs tied in part to the planned closure of 16 plants.
Last year's loss surpassed Ford's old record of US$7.39 billion set in 1992.
A fourth-quarter loss of US$5.8 billion helped drive up the red ink, which for the year amounted to US$6.79 per share versus a profit of US$1.44 billion, or US$0.77 a share, in 2005.
Although huge, the losses were far from the largest quarterly or annual corporate deficits on record -- Time Warner Inc reported a US$97.2 billion loss in 2002, largely due to new accounting rules about how to value assets. Ford could not rely on accounting rules, however, to explain its total.
Ford's loss also was not the worst annual total in the auto industry. General Motors Corp lost US$23.4 billion in 1992, due mainly to accounting rule changes on health care liabilities.
The Dearborn-based company predicted more losses for this year and next, but Ford said its restructuring plan is on track to return to profitability in 2009.
"We know where we are. We are dealing with it and we're on plan," chief executive officer Alan Mulally told reporters and industry analysts in a conference call.
Several analysts said the loss was not surprising, given Ford's high costs and falling market share and sales. Ford's future is cloudy at best, given the deficit that it must overcome, analysts said.
"They have a massive challenge in front of them. Their basic business is billions of dollars in the red," Burnham Securities analyst David Healy said.
Ford, which lost US$6 billion on North American operations alone, said it expected to burn up US$10 billion in cash to run its business through 2009 and spend another US$7 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. Ford lost US$6.7 billion in the first quarter of 1992.
Excluding special items, Ford lost US$1.50 per share in all of last year, worse than Wall Street predicted. Fourteen analysts surveyed by Thomson Financial expected a loss of US$1.35 per share, excluding special items.
Chief financial officer Don Leclair said that Ford expected favorable results from its automotive business next year.
But because of interest on its debt, "total automotive results are expected to be worse in 2007 than in 2006," he said.
Leclair said the company finished last year with US$33.9 billion in cash available for its automotive operations.
The company is on target to achieve its goal of cutting US$5 billion in annual costs by next year, compared with 2005, he said.
MISINFORMATION: The generated content tends to adopt China’s official stance, such as ‘Taiwan is currently governed by the Chinese central government,’ the NSB said Five China-developed artificial intelligence (AI) language models exhibit cybersecurity risks and content biases, an inspection conducted by the National Security Bureau (NSB) showed. The five AI tools are: DeepSeek, Doubao (豆包), Yiyan (文心一言), Tongyi (通義千問) and Yuanbao (騰訊元寶), the bureau said, advising people to remain vigilant to protect personal data privacy and corporate business secrets. The NSB said it, in accordance with the National Intelligence Services Act (國家情報工作法), has reviewed international cybersecurity reports and intelligence, and coordinated with the Ministry of Justice Investigation Bureau and the National Police Agency’s Criminal Investigation Bureau to conduct an inspection of China-made AI language
BOOST IN CONFIDENCE: The sale sends a clear message of support for Taiwan and dispels rumors that US President Donald Trump ‘sold out’ the nation, an expert said The US government on Thursday announced a possible sale to Taiwan of fighter jet parts, which was estimated to cost about US$330 million, in a move that an expert said “sends a clear message of support for Taiwan” amid fears that Washington might be wavering in its attitude toward Taipei. It was the first announcement of an arms sale to Taiwan since US President Donald Trump returned to the White House earlier this year. The proposed package includes non-standard components, spare and repair parts, consumables and accessories, as well repair and return support for the F-16, C-130 and Indigenous Defense Fighter aircraft,
CHECKING BOUNDARIES: China wants to disrupt solidarity among democracies and test their red lines, but it is instead pushing nations to become more united, an expert said The US Department of State on Friday expressed deep concern over a Chinese public security agency’s investigation into Legislator Puma Shen (沈伯洋) for “secession.” “China’s actions threaten free speech and erode norms that have underpinned the cross-strait ‘status quo’ for decades,” a US Department of State spokesperson said. The Chongqing Municipal Public Security Bureau late last month listed Shen as “wanted” and launched an investigation into alleged “secession-related” criminal activities, including his founding of the Kuma Academy, a civil defense organization that prepares people for an invasion by China. The spokesperson said that the US was “deeply concerned” about the bureau investigating Shen
LIMITS: While China increases military pressure on Taiwan and expands its use of cognitive warfare, it is unwilling to target tech supply chains, the report said US and Taiwan military officials have warned that the Chinese People’s Liberation Army (PLA) could implement a blockade within “a matter of hours” and need only “minimal conversion time” prior to an attack on Taiwan, a report released on Tuesday by the US Senate’s China Economic and Security Review Commission said. “While there is no indication that China is planning an imminent attack, the United States and its allies and partners can no longer assume that a Taiwan contingency is a distant possibility for which they would have ample time to prepare,” it said. The commission made the comments in its annual
RSS