Ford Reports $5.8 Billion in Losses
More evidence of the slowing economy.
FORD, the second-biggest US car maker, reported a $US5.8 billion ($7.6 billion) third-quarter loss as sales continued to slump and the costs of shedding jobs mounted in North America. Ford also said it would restate five years of earnings because of accounting changes.
The loss, Ford’s biggest in 14 years, widened from $US284 million in 2005’s third quarter, the company said. Excluding costs for asset write-downs and shedding jobs, the loss was $US1.2 billion, in line with analysts’ estimates.
The automaker is planning on returning to profitability in 2009. Automotive sales for Ford have fallen 8.6% this year. My guess is we’ll see more job losses at Ford in the not too distant future. But hey, the economy is doing grrreat!
Well, I’m Against Reports $5.8 Billion in Losses.
Pleased to meet you, Against. I’m With Reports $5.8 Billion in Losses…
Steve, your last paragraph is misleading as the original article states “the carmaker’s (Ford’s)sales have fallen 8.6% this year.” Last I heard, Toyota was having a banner year in sales, and Honda’s was a bit off from last year. This is not a sign of an overall cooling off in auto sales in the US, but rather a lack of interest in the Big-3’s products.
One company’s misfortunes in the auto industry does not reflect the economy’s state of being. In fact what’s happening with all the big 3 doesn’t really do it either.
There are many profitable companies out there that would argue things are quite well. I’m not saying all things are good but we need a better measure than Ford’s mismanagement.
DC Loser,
Ooops, you’re right, I meant to write that sales were off by 8.6% for Ford. I’ll change it.
Steve P.,
The problem is that things are bad for GM as well. As DC Loser notes things appear pretty bleak for the Big 3 here in the U.S. Now that doesn’t mean the economy is doing bad, by itself, but we also have a softening real estate market and other factors pointing to a weakening economy, yet the rhetoric is the economy is great, strong, etc.
Don’t buy the political rhetoric from a sub-group of the population who make a living by lying.
Steve, I’ve had contact with Ford folks nearly every day for the last 20 years, have seen the various reorganizations and re-focusings, and, frankly, I doubt that Ford will be able to shrink to grow. The corporate culture just doesn’t support the idea.
Quite to the contrary I suspect that the folks who are still stuck there will hang on to their jobs for dear life and become even more demoralized than they are now, further diminishing productivity.
The big challenge is still on the horizon: when Chinese-made autos enter the American market. When that happens in earnest the careful system of quotas and agreements built up over the last generation won’t be worth a damn.
Hold on to your seats, we’re in for a bumpy ride.
Uhm… Go Mopar! 🙂
Cheap cars that don’t suck.
How hard is it, people?
But apparently top management’s jobs aren’t depending on that.
Anderson, GM and Ford can’t survive on cheap cars that don’t suck. Those don’t produce a high enough return on each vehicle produced to maintain the companies. It’s not just a top management problem. It’s a structural problem. Reminiscent of the failing spoke-and-hub model of the airline industry.
note to those of you who wish to blame workers for this mess….100% of all their wages for a year would not cover a percentage point of this quarter’s so-called loss. great accounting. as my high school algebra teacher used to say “son; ya know liar’s may figger, but figgers don’t lie”! we’ve seen this sort of thing before, my grandchildren will still be buying new fords.
The economy is great! How dare you question it??
And inflation is dead too. If you don’t believe me, just go to the store and buy a few bags of groceries…
Crap, I hate this. GM and Ford are tanking, no question. Does this mean, ipso facto, that the economy’s headed for recession? Nope.
US Steel isn’t looking so hot either, but that’s because of something that most democrats and too many republicans don’t understand:
Wealth is created when efforts and resources are moved from lower- to higher-valued uses.
Toyota makes better cars than ford and GM.
Oh my paws and whiskers, what a freaking shock.
Companies going out of business are a sign that 1) they were poorly run (certainly possible here,) 2) they were no longer in a position to exploit the relative value of use. (also possible here.)
Anyhoo, Amazon’s breaking its earning records, and so is Jabil Circuit. Which means the economy is rip-roaring along at something like 25% growth.
Gee, cherry-picking news articles to confirm previously established partisan political dogma is fun.
Not real good economics, though.
Dave,
Cheap cars may have a lower margin, but expensive, sucky cars with high margins still return zero $$ if they aren’t what people want & don’t sell. A low-margin sale is better than a high-margin pile on the lot any day…
Alarmingly misleading.
Look, if your quality is lower, and your price is higher, however marginally, you’re going to loose a chunk of buyers to the remander of the market. Both the quality and the price fall directly in the lap of the Unions. Quality because they’ve had to cheap up on thd design so as to be able to still make a profit after the inflated wages… and the higher prices as well, for the same reason.
This is a direct result of unions. It’s that simple.
bithead, your facts are all wrong!
If so, you’ve done naught to prove it.