For the fourth quarter of 2008, Ford US has reported a net loss of USD$5.9 billion, for a grand total of USD$14.6 billion in losses for the year - the largest annual loss in the company's history. These losses come on top of a USD$12.6 billion loss in 2006 and a smaller - but still hefty - USD$2.7 billion loss in 2007.
Despite the flood of red ink running through its sales ledger, Ford has said it will not be looking for access to the US government's auto aid package.
While GM and Chrysler now have their hands deep in US taxpayer's pockets, Ford US said in a statement accompanying the announcement of its fourth quarter loss, that it has "sufficient liquidity" to fund its planned restructure. While it has secured agreement for USD$9billion in emergency loans from the US Government, it has not needed to draw on them. Yet...
Ford, you may recall, had secured much of its re-financing prior to the bottom dropping out of financial markets following the Lehmann Bros collapse. Perhaps it read the tea-leaves better than GM and Chrysler... certainly, it was in deeper trouble earlier.
The year ahead will be a very strange one for those watching the US car industry closely. For GM, Ford and Chrysler, every day brings more diabolical news. Both Ford and GM had a drop in US sales of over 30-percent for the month of December compared to December 2007.
To add to the bad news, Ford's finance devision, Ford Motor Credit, has announced it is to cut 1200 jobs, around 20-percent of its current workforce.
Despite the run of poor sales and increasing losses, Ford is not entirely pessimistic about the year ahead (though it does seem to consider the bankruptcy of a 'major competitor' something of a possibility:
"Based on current planning assumptions, (Ford) 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," the Ford statement said.
Ford Boss Alan Mullaly summed up the current situation:
"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," he said.
Ford expects sales to fall a further 10-percent this year. So, while times are tough now, things will likely worsen before they get better.
Somehow, you can't help thinking that the likelihood of Ford being able to trade out of its difficulties without accessing the secured US Government credit, falls somewhere between "fat chance" and "no hope".