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Subject: [NYTr] Booming Economy: Losses increase 30-fold at Ford
Date: 24 Oct 2006 15:11:17 -0500
From: nytr
 
BBC - Oct 23, 2006
http://news.bbc.co.uk/1/hi/business/6077234.stm

Losses increase 30-fold at Ford

Struggling US car firm Ford has seen its third quarter losses widen
dramatically, hit by the expense of its ongoing cost-cutting plan.

Ford said its loss in the three months until the end of September
totalled $5.8bn (#3bn), almost 30 times higher than they were at this
time last year.

Leaving out the provision for its cost cuts - including 45,000
redundancies - the loss shortened to $1.2bn.

Ford added that an error meant it had to restate all earnings since 2001.

The carmaker said the accounting mistake had been caused by certain
transactions in its consumer credit division being wrongly reported.

Its turnover during the third quarter was down 6% on a year earlier to
$32.6bn.

'Clearly unacceptable'

Ford's newly appointed chief executive, former Boeing executive Alan
Mulally, said the results were "clearly unacceptable".

"We are committed to dealing decisively with the fundamental business
reality that customer demand is shifting to smaller, more efficient
vehicles," he said.

Like fellow "Big Three" US car firms General Motors (GM) and Chrysler,
Ford has seen itself handicapped in recent years by an over-reliance
upon thirsty pick-up trucks and sports utility vehicles.

Sales of such cars have declined as petrol prices have risen sharply in
the US.

Instead a growing number of US drivers are switching to smaller engine
or hybrid cars, where Asian firms such as Toyota lead the market, and
Ford, GM and Chrysler have been slow to catch up.

"Our focused priorities are to restructure aggressively to operate
profitably at lower volumes, and to accelerate the development of new,
more efficient vehicles that customers really want," added Mr Mulally.

Factory closures

Ford aims to achieve 45,000 job cuts in the US and Canada by 2008,
including 14,000 white-collar positions.

The jobs will go as the company closes 16 North American factories by 2008.

It hopes the measures will help it reduce annual costs by about $5bn.

Ford's European operations are unaffected by the closures or job cuts.

) BBC MMVI

       
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