Ford Motor Company today announced a quarterly loss of $5.9 billion, capping a nightmarish year, but said it had 'sufficient liquidity' to fund its turnaround plan without US government aid.
The number two US car maker's results showed a sharp widening of its losses as car sales were slammed in the fourth quarter by a deep economic crisis and credit squeeze.
But Ford said that unlike rivals GM and Chrysler, it had enough cash to keep operating as it executes a restructuring plan.
'Based on current planning assumptions, it does not need a bridge loan from the US government, barring a significantly deeper economic downturn or a significant industry event, such as the bankruptcy of a major competitor that causes disruption to the company's supply base, dealers or creditors,' Ford said.
The company's fourth quarter loss was more than double the deficit the same time in 2007 of $2.8 billion. Revenues plunged some 33% to $29.2 billion in the three month period, amid weak sales and the divesting of its Jaguar division.
For all of 2008, Ford posted a whopping loss of $14.57 billion, compared with a $2.7 billion dollar in all of 2007. Revenues for the year fell to $146 billion from $172 billion.
'Ford and the entire auto industry faced an extraordinary slowdown in all major global markets in the fourth quarter that clearly had an impact on our results,' its president and CEO Alan Mulally said.
'We continued to take the decisive actions necessary to lower production to match the lower worldwide demand and reduce costs, which we expect will allow us to significantly reduce negative operating cash flow in 2009 and position Ford for growth when the economy rebounds,' he added.
The Detroit giant said it 'has sufficient liquidity to fund its business plan and product investments.'
The iconic US car maker has shed thousands of jobs and closed plants in an effort to cut costs, and sold off its Premier Automotive Group that included Jaguar.
Ford said today that it would cut another 1,200 jobs at its Ford Motor Credit unit in response to weak conditions.
Its cash-strapped competitors GM and Chrysler were granted $13.4 billion in government loans in order to keep their operations going amid the sudden downturn.
After initially requesting a $9 billion line of credit, Ford later told Congress it had sufficient cash on hand to get through the sales slump.
US car sales fell 18% last year to their lowest level since 1992 and are forecast to fall by up to three million vehicles this year to between 10.5 and 12 million units.
Sales have hovered between 16 and 17 million vehicles for the past decade and have not been below 12 million since the recession of 1982 when the US had 74 million fewer people than today.
