Ford narrows loss, offers buyouts
DEARBORN, Mich. (AP) - January 24, 2008 Ford is offering buyouts to its 54,000 U.S. hourly workers in a
bid to cut costs, Chief Executive Alan Mulally said. The company
will also adjust production schedules as demand sags.
In a conference call with analysts and media, Mulally said the
United Auto Workers union agreed to two rounds of buyouts at its
U.S. plants, with workers expected to leave the company by either
March 1 or April 1. He said the bulk of the separations were
expected to occur in the second quarter. The buyouts come in
addition to a round of buyouts in 2006, when 33,600 U.S. hourly
workers left the company.
Ford lost $2.8 billion, or $1.30 per share in the fourth
quarter, narrower than a loss of $5.6 billion, or $2.98 per share,
in 2006. The full-year loss of $2.7 billion, or $1.35 per share,
was significantly better than 2006, when Ford lost $12.6 billion,
or $6.72 per share.
"Overall, our plan is working and we continue to show
progress," Mulally said.
Dearborn-based Ford reported revenue of $44.1 billion for the
fourth quarter, up from $40.3 billion in the year-ago quarter. The
company reported full-year revenue of $172.5 billion, up from
$160.1 billion in 2006.
Excluding special items, Ford lost 20 cents per share for the
quarter and 19 cents per share for the year, in line with Wall
Street's expectations. Analysts surveyed by Thomson Financial had
predicted a loss of 19 cents per share for the quarter and 17 cents
per share for the year.
Special items for the year included a $705 million charge for
separation programs in North America and a $208 million gain from
the sale of Aston Martin.
Ford shares fell 8 cents to $6.22 in morning trading Thursday.
The company lost $3.5 billion for the year in its North American
automotive operations, narrower than a loss of $6.0 billion in
2006. Ford said higher net pricing and lower costs helped offset
losses from lower sales and unfavorable exchange rates. Full-year
revenue for the region was $70.5 billion, up from $69.4 billion a
year ago.
In the fourth quarter, Ford lost $1.6 billion in North America,
compared with a loss of $2.7 billion in the year-ago quarter.
Fourth-quarter revenue was $17.0 billion, up from $15.1 billion a
year ago.
Ford took a hit in the U.S. in 2007 when it reduced low-profit
sales to rental-car fleets by a third. In another blow to the
company, Toyota Motor Corp. outsold Ford to become the No. 2
automaker by U.S. sales in 2007, a position Ford had held for 75
years.
Ford reported a full-year profit of $997 million in Europe, more
than double its 2006 profit of $455 million. Ford said the
improvement was due to continued cost reductions, higher net
pricing and higher sales. Full-year European revenue was $36.5
billion, up from $30.4 billion in 2006. Ford reported a
fourth-quarter profit of $223 million on revenue of $10.4 billion
in Europe, up slightly from $218 million on revenue of $8.8 billion
a year ago.
Earnings also more than doubled in South America, where Ford had
a full-year profit of $1.2 billion, up from $551 million a year
ago. Full-year revenue improved to $7.6 billion from $5.7 billion a
year ago. For the quarter, Ford posted a profit of $418 million in
the region, up from $114 million a year ago, and revenue of $2.4
billion, double its 2006 revenue.
Ford's Premier Automotive Group, which includes the luxury
Jaguar, Land Rover and Volvo brands, posted a full-year profit of
$504 million, compared with a loss of $344 million a year ago. Ford
said it reduced costs across all brands and saw higher sales and
higher net pricing at Land Rover. Full-year revenue for the brands
was $33.2 billion, up from $30.0 billion in 2006.
Ford doesn't break out results for its luxury brands, but said
Volvo incurred a loss for the year.
Ford recently decided to keep Volvo but is planning to sell
Jaguar and Land Rover. Earlier this month, Ford selected Indian car
maker Tata Motors Ltd. as the top bidder for the two British
brands.
The luxury brands posted a $59 million profit for the fourth
quarter, compared with a profit of $174 million in the year-ago
quarter. Ford said the decline was explained by adverse currency
exchange rates and product mix at Volvo, which broke even for the
quarter, while Jaguar and Land Rover made a profit. Revenue for the
unit was $9 billion for the quarter, up from $8.6 billion a year
ago.
Ford's credit division, Ford Motor Credit Co., posted a $775
million profit for the year, down from $1.3 billion a year ago as
it was hit by higher borrowing costs, higher depreciation expenses
for leased vehicles and other factors.
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