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Ford to slash 10% of its US workforce

Text by REUTERS

Latest update : 2008-12-09

US car giant Ford has announced a net loss of $129 million for the third quarter. Despite this being an improvement on the same period last year ($380 million), the company will cut 10% of its American workforce.

Ford Motor Co posted a $2.98 billion quarterly operating loss on Friday amid the auto industry downturn and the credit crisis that has spread from North America to other regions of the world.

 

Ford, which has accelerated plans to shift North American production toward more fuel-efficient cars, said it would cut salaried expenses by another 10 percent, following on a program that cut such costs 15 percent earlier in 2008.

 

The company said its automotive unit had burned through $7.7 billion of cash during the third quarter due to production cuts and other factors, ending the period with a cash position of $18.9 billion, including marketable securities.

 

Liquidity, including available credit, totaled $29.6 billion.

 

The automaker also said it would explore divestitures of other assets and use equity for debt swaps and other incremental sources of financing to support its balance sheet.

 

The net loss narrowed to $129 million, or 6 cents per share, from $380 million, or 19 cents per share, a year earlier.

 

Ford's loss from continuing operations, excluding one-time items, was $1.31 per share, compared with analysts' expectations for 94 cents per share, according to Reuters Estimates.

 

Analysts have increasingly focused on whether Ford and rival General Motors Corp have the cash needed to ride out an auto sector downturn that spread from the United States, where sales hit a quarter-century low in October. GM reports its quarterly results later on Friday.

 

Ford shares closed at $1.98 Thursday on the New York Stock Exchange.

Date created : 2008-11-07

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