- The Washington Times - Friday, January 30, 2009


Ford Motor Co. said Thursday that it lost $5.9 billion in the fourth quarter and burned through $5.5 billion in cash, pushing the automaker to the worst annual loss in its 105-year history as sales slumped worldwide.

The second-largest U.S. automaker lost $14.6 billion in 2008 but said it still would not seek federal loans. With a precarious year ahead, Ford announced plans to cut 1,200 jobs at its credit arm and borrow $10.1 billion from an existing line of credit in case the economy worsens.

Chief Executive Officer Alan Mulally said on a conference call with reporters and industry analysts that the company plans further restructuring actions that will be announced at a later date.

Ford said it lost $2.46 per share in the three months ended Dec. 31, compared with a loss of $2.8 billion, or $1.13 per share, for the year-ago period.

Revenue fell to $29.2 billion, down 36 percent from $45.5 billion in the fourth quarter of 2007.

The results missed Wall Street’s expectations. Excluding special items, the company reported a $1.37 per share loss for the quarter. On that basis, analysts polled by Thomson Reuters expected a fourth-quarter loss of $1.30 per share on revenue of $27.1 billion.

Ford shares fell 8 cents, or 3.9 percent, to $1.95 in afternoon trading.

Dearborn-based Ford announced that it has reached agreement with the United Auto Workers union to end the “jobs bank” in which laid-off workers get most of their pay, although the effective date is still being negotiated.

Chrysler LLC ended its jobs bank Monday, and General Motors Corp. has said its will end next week.

Ford also said it would not come to the aid of struggling parts supplier Visteon Corp., unlike GM, which has spent billions helping its former parts unit Delphi Corp. emerge from bankruptcy. Ford spun off Visteon, based in Van Buren, Mich., in 2000.

“I think Ford and Visteon are truly in different places,” Mr. Mulally said. “They have really diversified their portfolio.”

Ford said special items accounted for $1.4 billion of its fourth-quarter net loss, largely because of personnel reductions and investment losses on money set aside for a union-administered trust that will take over retiree health care costs in 2010. Ford has about $2 billion in investments in that account, which can be used to fund operations if needed.

The Treasury Department agreed last month to lend $13.4 billion to GM and $4 billion to Chrysler, saving Ford’s U.S.-based competitors from bankruptcy.

Company spokesman Mark Truby said Ford’s position on seeking federal loans was unchanged. It asked for a $9 billion line of credit from the government but has said it has enough cash to make it through 2009 and doesn’t intend to use government loans unless economic conditions worsen.

“We don’t plan to or foresee using it,” Mr. Truby said Thursday.

Ford’s cash burn rate slowed from $7.7 billion in the third quarter. The company said it had $13.4 billion cash on hand as of Dec. 31 and plans to receive the $10.1 billion from its secured credit line Tuesday.

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