Ford Motor Company said that it lost USD 1.4 billion in the first quarter and that it did not plan to seek federal aid even as its two domestic rivals faced the possibility of bankruptcy.
Ford said that it had USD 21.3 billion in cash as of March 31st 2009, after going through USD 3.7 billion of its automotive cash reserves in the quarter. That is better than the USD 5.5 billion it used in the fourth quarter, even though sales were lower from January to March 2009 period.
Mr Alan R Mulally CEO of Ford said that "Our results in the first quarter reflected the extremely difficult business environment and weak demand for autos around the world. 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 UAW."
The loss is compared with a profit of USD 70 million 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 USD 1.8 billion after taxes. That is roughly USD 1 billion less than analysts expected but USD 2.3 billion worse than the profit it posted a year ago.
Ford said it that was on track to meet or beat its financial targets, including a goal of eliminating operating losses by 2011. It said that automotive structural costs were reduced by USD 1.9 billion in the quarter and that it expected to exceed its goal of a USD 4 billion reduction for all of this year.
Mr Mulally said that "Clearly, these continue to be challenging days for the global auto industry. I remain encouraged by the progress Ford is making to allow us to operate through the downturn and emerge as a lean, globally integrated automaker poised for profitable growth when the economy rebounds. Ford continues to take decisive actions working with all of our stakeholders to ensure our long term competitiveness."
Ford’s automotive operations lost USD 1.9 billion on sales of 973,000 vehicles in the quarter. That is down from USD 622 million in the first quarter of 2008, when it sold 558,000 more vehicles. It lost USD 637 million in North America, where new vehicle sales across the industry are mired in their worst slump since the early 1980s.
