Ford reports $8.7B US net loss in Q2
Rising gas prices and declining demand for large trucks are prompting Ford Motor Co., which reported a huge net loss in the second quarter on Thursday, to realign some of its North American production lines to build smaller, fuel-efficient cars.
Ford reported from its head office in Dearborn, Mich., that its second-quarter results included a net loss of $8.7 billion US, or $3.88 US a share. The loss included $8.03 US billion in writedowns on the value of Ford's North American assets and the lease portfolio of Ford Motor Credit Co.
Factoring out the writedowns, Ford's loss of 62 cents a share was worse than the average loss of 27 cents projected by analysts polled by Thomson Financial.
Ford's revenue for the second quarter dropped $5.6 billion from the same quarter of last year to $38.6 billion. Analysts had been forecasting $34.6 billion.
Ford stock fell 92 cents to $5.11 in New York trading.
Ford lost $15.3 billion in 2006 and 2007 combined, before posting a $100-million profit in the first quarter of this year. As gas prices continued to climb and truck sales collapsed, the company announced last May that it would be scaling back truck production.
Ford has largely been relying on pickups and sport utility vehicles for profits in North America, but now the Michigan-based company is hoping to increase revenues by taking a page from its successful European operation and focusing on smaller cars.
More consumers want to get rid of their gas-guzzling SUVs and trade them in for something smaller, a growing trend that has become obvious to Mohamed Bouchama, executive director of Car Help Canada, a Toronto-based company that helps consumers buy and sell their vehicles.
"Especially people driving in the city. That's what they want, that's what they are looking for — a small car, fuel-efficient, easy to park and not expensive either," he said.
Ford said it will bring the European Focus, the subcompact Fiesta and the Transit Connect small van to North America, plus three others yet to be identified.
Starting in December, Ford will retool two U.S. plants as well as one in Mexico to build subcompact and compact cars. Workers at Ford's Michigan Truck plant currently building Ford Expeditions and Lincoln Navigators will shift to building vehicles based on the European Focus, beginning in 2010.
Ford's plant in Louisville, Ky., which currently produces the Explorer and Mercury Mountaineer SUVs, will also build the Focus for North America, commencing in 2010. The plant in Cuautitlan, Mexico, which assembles F-series pickup trucks, will shift to produce the Fiesta in two years.
Ford Canada recently delayed the addition of a third shift at its Oakville, Ont., car assembly plant.
0 comments:
Post a Comment