Ford makes worst loss in history
The Ford motor company suffered the worst annual loss in its 105-year-history last year, slumping $14.6 billion into the red, though it insisted it still hoped to survive without a government handout.autos Updated: Jan 30, 2009 20:46 IST
The Ford motor company suffered the worst annual loss in its 105-year-history last year, slumping $14.6 billion into the red, though it insisted it still hoped to survive without a government handout.
As consumers steered clear of showrooms and banks cut off funding for car loans, Ford's performance deteriorated sharply towards the end of the year with a $5.8 billion loss in the fourth quarter.
Ford remains in better financial shape than its Detroit rivals, General Motors and Chrysler, which have received billions of dollars in emergency loans from the US government to avert bankruptcy.
“Ford has sufficient liquidity to make it through this downturn,” said Alan Mulally, the chief executive.
But the company qualified this by saying that a bail-out could become necessary if conditions deteriorated further in the economy and credit markets or if the collapse of a competitor unleashed a flood of cheap cars. “We would require a government bridging loan if there’s a significantly deeper economic downturn or a significant industry event,” said Mulally.
Michigan-based Centre for Automotive Research has suggested that liquidation of one of Detroit's “big three” could set off a chain of failures among suppliers jeopardising as many as 2.5 million jobs.
Ford adjusted its forecast for industry-wide US sales this year from 12.2 million light vehicles to 11.5-12.5 million. Last year it sold 13.2 million.
Some believe this is still optimistic. IHS Global Insight, the research group, expects US sales of only 10.5 million vehicles this year.
To tackle a shift in tastes towards cheaper, more fuel-efficient vehicles, Ford is bringing European models such as the Fiesta and the Focus to the US. The company is widely considered to have greater expertise in small cars than its cash-strapped rivals.
First Published: Jan 30, 2009 20:42 IST