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.
NETWORK-MAPPING PROJECT: The database contains 170 detailed files of Taiwanese politicians and about 23 million records of household registration data in Taiwan China has developed a network-mapping project targeting political figures and parties in Taiwan to monitor public opinion during elections and to craft tailored influence campaigns aimed at dividing Taiwanese society, according to documents leaked by Chinese technology firm GoLaxy (中科天璣). The documents, collected by Taipei-based Doublethink Lab, showed a database was specifically created to gather detailed information on Taiwanese political figures, including their political affiliations, job histories, birthplaces, residences, education, religion and a brief biography about them. Several notable Taiwanese politicians are in the database, including President William Lai (賴清德), former president Tsai Ing-wen (蔡英文), Minister of Foreign Affairs Lin Chia-lung (林佳龍),
RECOGNITION: Former Fijian prime minister Mahendra Chaudhry said that Taiwan’s New Southbound Policy serves as a stabilizing force in the Indo-Pacific region Taiwan can lead the unification of the Chinese people, Nobel Peace Prize laureate and former Polish president Lech Walesa said in Taipei yesterday, adding that as the world order is changing, peaceful discussion would find good solutions, and that the use of force and coercion would always fail. Walesa made the remarks during his keynote address at a luncheon of the Yushan Forum in Taipei, titled “Indo-Pacific Partnership Prospects: Taiwan’s Values, Technology and Resilience,” organized by the Taiwan-Asia Exchange Foundation with the Ministry of Foreign Affairs. Walesa said that he had been at the forefront of a big peaceful revolution and “if
UPGRADED MISSILE: The Chungshan Institute of Science and Technology is reportedly to conduct a live-fire test of the Hsiung Feng III anti-ship missile on Thursday next week The US Army is planning to build new facilities to boost explosives production and strengthen its supply chain, a move aimed at addressing munitions shortages and supporting obligations to partners including Taiwan, Ukraine and Israel, Defense News reported. The army has issued a sources sought notice for a proposed Center of Excellence at the Blue Grass Army Depot in Kentucky, the report said. The facility would serve as a hub within the US industrial base for the production of key military explosives, including research department explosives (RDX) and high melting explosives (HMX), while also supporting research and development of next-generation materials. The proposed
SOUTH KOREA DISPUTE: If Seoul continues to ignore its request, Taiwan would change South Korea’s designation on its arrival cards, the foreign ministry said If South Korea does not reply appropriately to a request to correct Taiwan’s name on its e-Arrival card system before March 31, the government would take corresponding measures to change how South Korea is labeled on the online Taiwan Arrival Card system, the Ministry of Foreign Affairs said yesterday. South Korea’s e-Arrival card system lists Taiwan as “China (Taiwan)” in the “point of departure” and “next destination” fields. Taipei has asked Seoul to change the wording. Since March 1, South Koreans who hold government-issued Alien Resident Certificates (ARC) have been identified as from “South Korea” rather than the “Republic of Korea,” the
RSS