DETROIT (Reuters) – Ford Motor Co posted a sharply narrower fourth-quarter loss on Thursday after cuttingcosts and boosting margins on vehicles and said it expects a net lossfor the full year 2008.
The nation’s No. 3 automaker, which has struggled with decliningsales and sliding market share in the United States, said it would takefurther cost-cutting actions on its home turf, including offeringbuyouts to all of its unionized work force.
Ford reported a fourth-quarter net loss of $2.75 billion, or $1.30per share, compared with a loss of $5.63 billion, or $2.98 per share, ayear earlier.
The loss from continuing operations, excluding one-time items, was20 cents a share. On that basis, analysts expected a loss of 19 cents ashare, according to Reuters Estimates.
Fourth-quarter revenue came in at $44.1 billion, up from $40.3 billion a year earlier.
"Although our automotive operations are improving on ayear-over-year basis, the U.S. economy is slowing and the outlook forthe auto industry remains challenging," Ford Chief Executive AlanMulally said in a statement.
The U.S. auto market, the world’s largest, has been hurt by aslowing economy, a slumping housing market and tighter credit marketsthat pinched less credit-worthy borrowers.
U.S. auto sales fell for the second consecutive year in 2007 and theconsensus view among Wall Street analysts and high-profile investorspoints to a further decline this year.
LABOR COST CUTS
Ford is about to announce buyouts for all 54,000 of its factoryworkers represented by the United Auto Workers union, as part of alabor contract reached last year.
Analysts have hailed the contract for its potential to slash thecompany’s labor costs by allowing it to hire new workers at half thewage rate of current employees. The pact also shifts retireehealth-care obligations to a new trust fund.
Ford cut 6,500 factory jobs in North America during the thirdquarter, taking its total work force reduction to about 33,600 sincelate 2005.
In the crucial North American market, Ford posted a narrower pre-taxloss of $1.6 billion in the fourth quarter, compared with a loss of$2.7 billion a year earlier.
That improvement reflected higher pricing as the automaker pulledaway from cut-rate sales to car rental companies and held back fromoffering consumer incentives such as zero-percent financing.
Ford’s global automotive unit reported a pre-tax loss of $889 million for the quarter.
For the full year 2007, Ford’s North American auto unit reported a pre-tax loss of $3.5 billion.
Ford forecast a loss in its automotive unit for the full year 2008but said it still expects to be profitable in North America and in itsauto operations in 2009.
Ford’s finance arm, Ford Motor Credit, said net income dropped 33percent to $186 million in the fourth quarter. The unit reported netincome of $775 million for 2007 and said it expects about the sameresults in 2008.
(Reporting by Jui Chakravorty Das and David Bailey; editing by John Wallace)
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