DETROIT - Ford Motor swung to a loss in the third quarter as sales of high-margin 4WD sport utility vehicles declined and its key North American unit remained in the red.
Chairman and chief executive William Clay Ford jnr vowed to present a restructuring plan in January to revive the
company's deteriorating North American automotive operations.
Ford said returning his family's company to financial health will require a "dramatically different business structure" and said the carmaker will outline the steps to achieving profitability early next year, including "significant plant closings where facilities don't fit our strategy moving forward" in North America.
The No 2 US carmaker, facing a deepening financial crisis, reported a net loss of US$284 million ($403 million), or 15USc a share, compared with a profit of US$266 million, or 15USc a share, a year earlier.
Excluding special charges, the company lost US$191 million, or 10USc a share.
Ford said it expects full-year profit to be at the lower end of its forecast of US$1 to US$1.25 a share.
The third-quarter loss, the first for Ford since the fourth quarter of 2003, follows a protracted decline in its US market share. US sales of Fords are down 1.3 per cent so far this year despite a massive discount programme that helped clear inventory of unsold vehicles.
Ford and cross-town rival General Motors, which reported a US$1.6 billion quarterly loss earlier this week, have seen margins squeezed by intense competition in the US market and by a dramatic slowdown in sales of profitable mid-size and large 4WD vehicles amid high petrol prices.
The companies are also beset by higher costs and a cut in their credit ratings to "junk" status this year.
In North America, Ford lost US$1.2 billion during the quarter, before taxes and excluding special items.
Ford shares are down more than 40 per cent for the year, compared with a 1.3 per cent decline in the S&P 500 index.
The shares currently trade at about 7.7 times estimated 2006 earnings, well below the average multiple of 16 for components of the S&P 500 index.
- REUTERS
