CHICAGO, United States (AFP) — Ford Motor Co. announced Thursday a quarterly loss of 8.7 billion dollars amid hefty writeoffs as the sputtering auto giant said it would accelerate its vast reorganization program.
The second-quarter results include eight billion dollars in special charges to write down the value of Ford's assets and to recognize losses from auto leasing.
Excluding special charges, the operating loss was 1.0 billion dollars for the second-largest US automaker, or 64 cents per share, worse than Wall Street estimates of a loss of 27 cents a share.
Ford said the results prompted a stepping up of its transformation plan including "the addition of several new fuel-efficient small vehicles in North America and a realignment of its North American manufacturing."
The company said as part of its realignments, it will continue to offer "targeted hourly buyouts" in coordination with union contracts "to secure competitive employment levels."
Ford also said it remains on track to reduce costs for white-collar jobs by 15 percent in North America by August 1.
The plan also calls for the introduction of six of Ford's European small cars to the US market and an extension of turbocharged engines to help fuel economy in other models.
The moves is "a significant acceleration of its transformation plan" and includes "a realignment of its North American manufacturing."
"We continue to take decisive action in response to the rapidly changing business environment and remain absolutely committed to the four elements of our business transformation plan," said Ford president and chief executive Alan Mulally.
"Our European and South American operations are robust and profitable. We have momentum in Asia. And we are uniquely positioned to leverage our global assets and the global strength of the Ford brand to quickly bring more small, fuel-efficient vehicles to North America."
Ford's second quarter revenue was 38.6 billion dollars, down from 44.2 billion a year ago before the company sold its Jaguar, Land Rover and Aston Martin nameplates. Excluding those brands, revenue would have been down slightly, with lower volume partly offset by favorable exchange.
Special charges includes a writeoff of 5.3 billion dollars for Ford's North American assets and 2.1 billion dollars for Ford credit.
Ford said it was speeding up its reorganization in North America "because of deteriorating economic conditions," that have hurt demand for cars and due to "a significant shift" away from large pickup trucks and traditional sport utility vehicles.
Despite the woes in the US market, Ford managed a profit of 582 million dollars in Europe and 388 million in South America.
In addition to bringing six small vehicles to North America from the its European lineup, Ford is speeding up plans for its EcoBoost turbocharged engine and new four-cylinder engines that deliver better fuel economy. It is also boosting hybrid production and converting three existing truck and SUV plants for small car production, beginning this December.
"We continue to take fast and decisive action implementing our plan and responding to the rapidly changing business environment," said Mulally. "Ford is moving aggressively using our global product strengths to introduce additional smaller vehicles in North America and to provide outstanding fuel economy with every new product."
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