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Ford feels the pain

Posted Jan 25th 2007 8:00AM by Jonathan BerrJonathan Berr RSS Feed
Filed under: Before the bell, Earnings reports, Bad news, Competitive strategy, Ford Motor (F)

Ford Motor Co. (NYSE:F) posted fourth-quarter results that were even worse than Wall Street's already-low expectations. In fact, on an annual basis the loss was $12.7 billion, or $6.79 per share, the worst in the company's 103-year-history.

The company's net loss widened to $5.8 billion, or $3.05 per share, from $74 million, or 4 cents, a year earlier, according to a press release. Revenue fell to $40.3 billion from $46.3 billion. Excluding one-time items, the loss was $2.1 billion, or $1.10. The results were worse than the $1.01 loss Wall Street analysts had expected though revenue came in ahead of the expectations of $34.67 billion.

The picture in North America was particularly ugly. The company posted a pre-tax loss of more than $2.8 billion in the quarter and $6.1 billion for the year. Sales plunged to $15.1 billion from $24.1 billion in the quarter. On a yearly basis, they plummeted to $69.4 billion versus $80.6 billion.

Investors weren't pleased with the results. They sent Ford's stock tumbling 10 cents to $8.10 in pre-market trading,

Under Chief Executive Alan Mullaly, Ford is cutting auto production and jobs to make the company more competitive. He doesn't mince words about the automaker's problems. Whether investors give him a chance remains to be seen.

Tags: alan mullaly, AlanMullaly, auotmakers, auto industry, AutoIndustry, earnings, economy, ford

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Reader Comments (Page 1 of 1)

Dan1

1-25-2007 @ 3:05PM

Dan said...

Ford wouldn't be in trouble if they'd get in the game,and stop living on past success. Same basic design year after year, with little or no up grades.
Who's running this company, Mr Magoo? Hey, I've got an idea, plan for the future,use a little foresight.
Is America asking too much for it's companies CEO's to stop worrying about how big of a house they can build and start worrying about their products.

2 stars vote downvote upReport
Thomas Capozio2

1-25-2007 @ 4:37PM

Thomas Capozio said...

Ford has many problems,I was a loyal ford owner for my entire working career, ,however when i went to purchase a new 2006 ford, ford credit denied my financing,i have financed over 10 cars and trucks with ford credit and my credit rating had improved since my last purchace, so since i had just retired from a ford dealer that i had worked for over 30 years, i guess my loyalty meant nothing, so i bought a new toyota avalon,with the lowest intrest rate i have ever received,4.9%, could things like this be hurting fords sales,i think so.

2 stars vote downvote upReport
Greg3

1-25-2007 @ 7:10PM

Greg said...

Ford is also being boycotted by AFA (American Family Association) for refusing to stay neutral in the pro-homosexual marriage debate. While the AFA boycott might be only small percentage of the North American market why wouldn't Ford want to just stay neutral and not alienate either side. It is like they don't want the conservative Christian market at all. I own two Fords. I bought both brand new from Texas Ford dealers. One is 7 years old and I'll be ready for a new car soon. I won't buy a Ford until they stop being political on this issue. Nissan here I come.

2 stars vote downvote upReport
Dwight Ash4

1-25-2007 @ 9:10PM

Dwight Ash said...

I agree with comment #3, that Ford should stay out of the push to be agressive in supporting gay and lesbian issues. I have been a loyal Ford owner and supporter for many of my 71 years but I will no longer buy Fords till they stop this nonsense. Could the upswing in pedophilia in recent years be linked to our societal acceptance and support of the gay and lesbian lifestyles? Food for thought.

2 stars vote downvote upReport
Rick5

1-25-2007 @ 11:23PM

Rick said...

Hmmmm,,, let me see. Gee, I wonder if Ford will try
to dump their pensions like United. Sounds like a set up to me. I smell a fish!

2 stars vote downvote upReport
spd6

1-25-2007 @ 11:22PM

spd said...

The anti American sentiment is what is sinking the U.S. manufacturers. Is there a $18,000 BMW? I think not. Ford makes a fine afordable car. The company has been mismanaged since the Jaques Nasser days
when he decimated the U.S. manufacturing to pad his European interests.

2 stars vote downvote upReport
Erik7

1-26-2007 @ 7:06AM

Erik said...

I agree with the design issue. They do push out the same looking designs every year. I was never trilled with the interior at all. Every make and model has this toy like feeling to it. Sometimes Im scared to touch things in my friends car. It doesnt look like they put to much into their product. Its like they use the least expensive crap to get by. Has anyone ever noticed the interiors of ford. Very cheap and flimsey looking. The 90's models were the worst, cup holders were the first to go and looked like something you could buy at Wal-Mart. Then goes the button on the stereo and dont get me started on the electronic window and mirror controls. My parents owned a Ford Contour. I dont know where start. Everything went wrong with this car. Its true when they say you get what you pay for. I will admit in the last few years they have come out with some eyecatching stuff but nothing I would wet my pants over. Interior design has improved and can mostly be noticed in there line of trucks and upscale vehicles like the 500 and fusion. In all not a very consistant reputation in my eyes. This company needs to open their eyes and use their imagination a little more if they hope to keep manufacturing vehicles. Who the hell is running this company. I bet the ones that do dont drive fords. Would you buy something you know is made half ass. Hell know. If they do, its the kids first car while mommy and daddy cruise in a German Gem. If they put as much effort into there product as they do into their homes you'ed be waiting for a new Ford models release. "Fords coming out with a new model for the fusion." Ohh, let me guess, they redesigned the headlights and threw in a cup holder for the rear passangers. My bicycle has cup holders, come on. Ford should have been putting little warning notices by certain things that may often tend to break easily. For example, warning dont close the cupholder once open cause it may not open. I could go on and on. I know Im not running the company and there is probably a ford owner reading this now saying "well you think you can do better!" I dont know, but I know I wouldnt want my company to have a rep like Found On Road Dead! I would be looking for new ideas and be a little more creative on design and upgrades. Im still young and have lots to learn but one thing is for certain,I will never buy a ford unless I see a big change. This was supposed to be a comment but what ford hater would pass up a chance to bag on this company. You know who you are out there. You purchased a car with a warrenty that a kids tricycle could exceed. Why? Cause Ford knows its only gonna make it past the warrnty by 200 miles and their goes your car to the shop with only 20,200 miles. To the one reading this right now saying "what the hell do you know", I know you're only reacting this way cause you have a ford parked outside and the warrenty is almost up. To the Ford design crew, may you all awaken with fresh ideas and the ability to be creative. To the CEO's, I look forward to seeing cars with class equal to your top of the line home furnishings. Stop getting political in matters that dont concern you and start Pro-focusing on the issues at hand. Start thinking in the future before your company is on life support waiting to have the plug pulled. Have a great day and say a prayer for your troops away from home. Im Out!

2 stars vote downvote upReport
Mart8

2-06-2007 @ 9:06AM

Mart said...

I recently took the earliest retirement possible as a senior manager in a Ford business. I had been in the car business for nearly 30 years, having started with Ford as a graduate. I left Ford for a large number of years and rejoined about 7 years ago. Staggeringly I found little had changed. The company is run completely from the top down, both with a fear factor and an assumption that grade means knowledge. People are cogs in a machine. The company thinks like a half baked 1950's army, and makes a massive division between foot soldiers, sergeants, captains and generals. Generals are good at barking orders, expecting them to be fulfilled and then widening themselves from the outcomes. They often operate with a separate code of conduct, whilst declaring there to be only one. I think the recent debacle about one exec using company planes to go to Florida every week says it all.

Product wise the company says a lot and does very little on the basic line ups in the US. I visited the studios some years ago and was amazed to see no cars in development, only facelifted trucks and SUV. Then finally out comes some retro stuff basking in a US time period of cash rich post war consumerism, most of which has no appeal now to the wider audience. The Thunderbird was withdrawn early, witha press statement that this had been the plan! The GT40 clone was a great example of fiddling whilst Rome burns and a hope to distract attention from the real problem...no good cars for ordinary folk. As time goes on and money runs out this problem is now almost impossible to fix. That and the fact that the basic brand now sits in a progressively shrinking no mans land, with budget brands selling better quality at a lower price and premium brands offering better value and content, means the writing is on the wall for the FoMoCo.

What does it stand for in the millenium? Does anyone really care?

The management at the top have largely grown with the company which until 2001 had been successful for at least a decade, so it is hard for them to know how to deal with their own failure to change the culture, market approach, customer offering and design. Investment tip? Get out before the whole lot goes down the pan.

Me? I hope the pension fund can bear up against the inevitable, but I am not entirely banking on it.

Shame really, Henry Ford was a great man, the company has done great things, but now it is a husk. Lets hope it doesn't blow in the wind

2 stars vote downvote upReport

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