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Ford reports $5.9 billion loss for fourth quarter of 2008

 
1 889 views Jan 29, 2009

Ford CEO Alan Mulally insists that the carmaker does not need any federal money despite its $5.9 loss in the 4th quarter

Ford CEO Alan Mulally insists that the carmaker does not need any federal money despite its $5.9 loss in the 4th quarter

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Despite being the only Detroit 3 carmaker to decline the federal government’s bailout offer, Ford has revealed that it is still doing it tough by reporting a substantial $5.9 billion loss for the fourth quarter of 2008. This figure roughly equates to just under $500 million lost each week or about $2.46 per share, and compares with a net loss of $2.8 billion for the same period 12 months prior.

Citing a sharp decline in vehicle demand, Ford’s financial performance suffered in nearly every market around the globe. The carmaker lost money in its North American, European, and Asia-Pacific operations, with only its South American unit and Mazda stake generating any income. One of the worst individual performers was Ford’s Volvo subsidiary, which alone lost $736 million in the fourth quarter and will soon be on the open market.

Some good news was that Ford’s fourth-quarter cash burn rate was slower than the $7.7 billion lost in the third-quarter, and that its market share actually increased in the U.S. and Europe.

Ford insists that it has sufficient liquidity to fund its business plan and product investments for the coming months, revealing that it finished 2008 with $24 billion in available liquidity. The carmaker also has funds from a temporary asset account, which equates to an additional $2 billion.

Importantly, Ford also reconfirmed that, based on current planning assumptions, it won’t need a bridge loan from the U.S. government. It will, however, draw on available credit lines to the tune of $10.1 billion, which it expects to receive by February 3.

According to its own predictions, the carmaker expects to break-even in 2011.



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Comment (1)

  1. ma_Chris avatar Chris Posted: 1/29/2009 6:26am PST

    wow... big loss but really could you expect any less? but remind me again.. why the hell did they sell a controlling share of mazda.. for all of what.. a billion dollars? i would have rather seen a 6.9 billion loss and know they still had mazda. should be interesting to see how this compares to GM and chrysler.. and what toyota and honda are doing.
     
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