DETROIT — The Ford Motor Company, the only Detroit automaker not being propped up by billions of dollars in government loans, said on Thursday that it lost $14.6 billion last year, making 2008 its worst year in history as a result of the biggest sales slump in decades.þþStill, the company said it had “sufficient liquidity to fund its business plan and product investments.” It finished 2008 with $24 billion in cash, though most of that is borrowed.þþFord, which says it is financially healthier than its cross-town rivals General Motors and Chrysler, reiterated that it did not need federal aid unless the economy worsens significantly or one of its competitors files for bankruptcy protection.þþ“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,” Ford’s chief executive, Alan R. Mulally, said in a statement. “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.”þþFord lost $5.9 billion, or $2.46 a share, in the fourth quarter alone, compared with a loss of $2.8 billion, or $1.33 a share, in the final months of 2007. Auto sales in the United States plummeted in the fourth quarter, as tight credit markets kept many would-be buyers from obtaining loans and the recession, which began in December 2007, kept even more people from even setting foot in a dealership. þþAnd the months ahead do not look promising. Many economists expect that the economy will continue to contract until July at the very least, but at a slowing pace in the second quarter. That would make this the longest recession since the 1930s, outlasting the two record-holders, the mid-1970s and early 1980s downturns. And the unemployment rate, which jumped to a 16-year-high of 7.2 percent in December, is expected rise even more.þþFourth-quarter revenue for Ford was $29.2 billion, 36 percent less than the $45.5 billion in took in a year earlier. The company depleted its cash reserves at a rate of $2.4 billion a month.þþExcluding special charges, Ford’s loss in the quarter was $1.37 a share. On that basis, analysts surveyed by Thomson Reuters expected a loss of $1.30.þþFord’s full-year loss of $14.6 billion, or $6.41 a share, was more than five times larger than its 2007 loss of $2.7 billion, or $1.38 a share. It was also more than the 105-year-old company’s 2006 loss of $12.7 billion, the previous record.þþTo give itself more of a financial cushion as it tries to get its restructuring back on track, the company said it planned to draw $10.1 billion more from its available credit lines in the first quarter. This month, the company borrowed $2 billion from funds that intended for a new union-managed trust that will cover retiree health care costs.þþ“Given the instability of the capital markets with the uncertain state of the global economy,” Mr. Mulally said, “we believe it is prudent to draw these credit facilities at this time.”þþFord also said Thursday that the United Automobile Workers union has agreed to end its controversial jobs bank program, which pays factory workers after their jobs have been eliminated. The company is still negotiating the terms of that change.þþChrysler eliminated its jobs bank this week, and G.M. will end its program on Monday.þþTogether, Chrysler and G.M. have borrowed $13.4 billion from the federal government to avoid bankruptcy. Ford initially said it wanted a $9 billion credit line to tap if needed but changed its position after Congress balked at the companies’ requests. The Bush administration eventually approved taking money from the Treasury Department’s Troubled Assets Relief Program.þþIn addition to the automaker, the Ford Motor Credit Company, the company’s financial arm, reported a net loss of $1.5 billion in 2008, compared with net income of $775 million in the quarter a year earlier. The lender said that it would cut about 1,200 jobs or 20 percent of its work force.þþ
Source: NY Times
