DETROIT — The Ford Motor Company said on Friday that it lost $1.4 billion in the first quarter, but that it has enough money to survive the year, even as its two domestic rivals edge closer to bankruptcy.þþFord, the only Detroit automaker not being kept afloat by the government, said it had $21.3 billion in cash as of March 31, after going through $3.7 billion of its automotive cash reserves in the quarter. That is only about half of the $7.2 billion it used in the fourth quarter, even though sales were lower from January to March.þþExecutives said they expect the company to slow the rate at which it burns cash as the year goes on. Shares of Ford surged 15 percent to $5.16 in morning trading on the New York Stock Exchange, briefly touching a seven-month high.þþ“Our results in the first quarter reflected the extremely difficult business environment and weak demand for autos around the world,” Ford’s chief executive, Alan R. Mulally, said in a statement. “Despite the challenges, Ford made strong progress on our transformation plan by gaining share with strong new products, slowing operating-related cash outflows, reducing outstanding debt, lowering our structural costs and reaching new agreements with the U.A.W.”þþThe company’s loss, equal to 60 cents a share, compared with a profit of $70 million, or 3 cents a share, in the first quarter of 2008. Excluding one-time items, including the benefit of a debt restructuring and a charge related to the potential sale of its Volvo brand, Ford lost $1.8 billion after taxes, or 75 cents a share. That loss is roughly $1 billion smaller than analysts expected.þþFord said it was “on track to meet or beat its financial targets,” including a goal of eliminating operating losses by 2011. It said that structural costs in its automotive business were reduced by $1.9 billion in the quarter and that it expected to exceed its goal of a $4 billion reduction for all of this year.þþ“That gets us off to a really good start and gives us a lot of confidence that we can continue to remove the waste from the system and improve our productivity,” Mr. Mulally said on a conference call with analysts and reporters.þþRevenue was $24.8 billion, 37 percent lower than the $39.2 billion in the period a year ago.þþFord’s automotive operations lost $1.9 billion on sales of 973,000 vehicles in the quarter. That is down from $622 million in the first quarter of 2008, when it sold 558,000 more vehicles.þþThe company lost $637 million in North America, where new-vehicle sales across the industry are mired in their worst slump since the early 1980s. Ford Motor Credit, the automaker’s lending arm, reported a pre-tax loss of $62 million, down from a $64 million profit in the first quarter a year ago.þþWhile General Motors and Chrysler march toward possible bankruptcy, Ford has managed to separate itself from the pack by forgoing federal aid and maintaining investments in developing new products.þþEven though it lost a record $14.6 billion in 2008, Ford has enough cash on hand to last through at least 2010, Patrick Archambault, an analyst with Goldman Sachs, said this week. Mr. Archambault upgraded his rating on Ford stock to “buy.”þþ“Unlike G.M., we do not foresee bankruptcy at Ford,” Mr. Archambault wrote to his clients. “With G.M. and Chrysler likely to file for bankruptcy in coming weeks, in our view, we think the stage is set for a sea change in the structure of the U.S. auto industry.”þþAnother analyst, Brian A. Johnson of Barclay’s Capital, said recently that he was “increasingly comfortable” that Ford can maintain sufficient liquidity to fund its operations.þþBut Ford is healthy only relative to the other Detroit carmakers. Its sales were down 43 percent in the first quarter, compared to a 38 percent decline for the industry over all. The company is counting on its upcoming Taurus sedan and new Fusion hybrid sedan, along with a recently started program that covers monthly payments for buyers who lose their jobs, to draw more customers.þþMany Ford dealers say they are already seeing more customers trading in vehicles built by G.M. and Chrysler. “Ford may actually benefit from market share losses as it picks up ‘Buy American’ consumers who may shun the other two companies (either on political grounds of not supporting bailouts or on concerns of purchasing from a bankrupt company),” Mr. Johnson wrote in a note to clients this week.þþChrysler could file for bankruptcy protection as soon as next week and is working to form an alliance with the Italian automaker Fiat, as directed by the Obama administration’s automotive task force. G.M. has until June 1 to develop a more aggressive restructuring plan and to reach deals with the United Automobile Workers union and its bondholders.þþFord’s unionized workers already ratified changes to their 2007 contract that are expected to save the automaker at least $500 million a year. Ford eliminated its jobs bank program, which allowed laid-off workers to continue collecting most of their salary, and persuaded the union to accept stock in place of up to $6.5 billion in contributions to a new health-care fund for retirees. It is expected to push the union for any additional concessions granted to G.M. or Chrysler, as well.þþThe company also cut its automotive debt by $9.9 billion, or 38 percent, through a restructuring program that concluded earlier this month.þþ
Source: NY Times
