DEARBORN, Mich–Ford Motor Co. said Friday it lost $129 million in the third quarter as the struggling automaker burned through $7.7 billion in cash.
The automaker also said it will cut about 2,300 more white-collar employees in North America as it tries to weather the worst economic downturn in decades.
Ford said it lost six cents per share for the quarter, compared with a loss of $380 million, 19 cents per share, a year ago.
The company posted a pretax loss of $2.7 billion from continuing operations. This partly offset by a $2-billion gain as the company shifted retiree health care liabilities to a trust run by the United Auto Workers.
Ford's global automotive operations had a pretax loss of $2.9 billion for the quarter, compared with a pretax loss of $362 million a year earlier.
Sales fell 22 per cent to $32.1 billion from $41.1 billion due to lower volume and the sale of Jaguar and Land Rover.
Excluding special items, Ford lost $1.31 per share, worse than Wall Street expected. Analysts surveyed by Thomson Reuters predicted a loss of 94 cents per share on sales of $28 billion.
Dearborn-based Ford reported its worst three-month performance ever in the second quarter, when it lost nearly $8.7 billion.
The cash burn – in which a company spends more money than it takes in – was far higher than the $2.1 billion Ford consumed in the second quarter.
Ford said the cash burn primarily reflected automotive losses, changes in working capital and payments to its credit arm to reduce interest rates for buyers. It was exacerbated by sales drops and production cuts of 500,000 fewer vehicles from second-quarter levels, resulting in $3 billion less in incoming cash for the quarter.
Chief financial officer Lewis Booth would not say if he expects the cash burn will continue at the present levels, but said he is confident the company can make it through 2009.
"With our present assumptions, we are comfortable with our liquidity position," Booth told reporters.
"I think it goes without saying, forecasting the future at the moment is extremely difficult. Trying to find out just exactly what is happening with the consumer is really tough."
Industry analysts say that if the economy doesn't improve, Ford could run out of money sometime after 2010.
The company reported having $18.9 billion in cash on hand on Sept. 30, down from $26.6 billion at the end of the second quarter.
U.S. automakers have approached the American government for low-interest loans as they try to weather the global economic slowdown. Ford is also among automakers that are talking with the European Commission and other governments about loans.
Ford said it will cut North American production in the fourth quarter by 40,000 units more than announced in September, primarily with shift reductions and temporary plant shutdowns.
In September the company announced a fourth-quarter production cut of 171,000 units over the fourth quarter of last year, mainly in trucks.
The salaried job cuts, Ford said, equate to about 10 per cent of its North American white-collar workforce of 22,600.
It said it has no plans to offer more buyouts or early-retirement packages to blue-collar workers.
Ford also announced that some vehicle programs will be deferred, although it described these moves as minor timing changes.
Ford said it lost $2.6 billion pretax in North America, compared with a loss of $1 billion in the year-ago period.
It recorded a pretax profit of $480 million in South America, compared with $386 million last year. In Europe, the company made $69 million, a sharp drop from the $293 million in the year-ago period.
Ford's Asia-Pacific operations made $4 million, down from $30 million. It lost $1 million on its interest in Mazda, compared with a profit of $14 million in the third quarter of last year.
Volvo lost $458 million, wider than the $167 million loss last year. Ford Motor Credit Co. had a pretax profit of $161 million, far lower than the $546 million in the same quarter last year.
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It no wonder why they are going busted.
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