Ford announces Q3 loss of $5.8 billion
Our Corporate Bureau
23 October 2006
Ford Motor Co. today announced its highest quarterly loss of $ 5.8 billion (Rs 26,384 crore) in 14 years — hit by the expense of its ongoing cost-cutting plan that includes restructuring charges related to planned job cuts in North America, and the decline of its profitable truck sales. .
Ford's turnover during the third quarter, down 6 per cent compared to last year to $32.6 billion, is 30 times higher than in the same period last year. Leaving out the provision for its cost cuts — including 45,000 redundancies — the loss shortened to $1.2 billion (Rs 5,458 crore).
The loss was its largest since the fourth quarter of 1992, when it lost $8.1 billion.
The company also said that it would restate its financial results from 2001 through second quarter of 2006, citing an accounting error on interest rate derivatives used to hedge its long-term Ford, is closing 16 plants and cutting up to 45,000 jobs in North America by 2008. In the same period last year, it had a loss of $284 million.
One of the 'Big Three' US car firms (General Motors and Chrysler are the other two), Ford has seen a major decline in the sales of its profitable pick-up trucks and sports utility vehicles. The sales of these vehicles have declined as petrol prices have risen sharply in the US.
An increasing number of buyers are opting for smaller engine or hybrid cars, from Japanese auto makers like Toyota.