DEARBORN, United States (AFP) - Struggling US auto giant Ford Motor Co. posted a mammoth third-quarter net loss of 5.8 billion dollars as restructuring costs hammered its earnings.
Ford also revealed it would restate results from 2001 through to this year's third quarter, "to correct the accounting for certain derivative transactions" by its consumer credit division.
Ford's newly appointed chief executive, former Boeing executive Alan Mulally, said the results were "clearly unacceptable" and vowed to make more of the smaller, fuel-efficient vehicles pioneered by Japanese automakers.
Mulally, in an interview with trade publication Automotive News published after the earnings report, ruled out an alliance with Renault-Nissan in the near term.
The Ford CEO was quoted as saying that such a partnership would send Ford in the "wrong direction" as it would distract the company from its restructuring plan.
Mulally said he has had no contact with Renault-Nissan CEO Carlos Ghosn but Ford could consider alliance talks in the future -- "but right now I like our focus."
His comments came in the wake of Renault-Nissan's collapsed alliance talks with General Motors earlier this month. After that collapse, the French and Japanese partners said they were open to an alliance with another North American partner.
Ford's loss for the third quarter ended September 30 included heavy provisions for its hard-hitting restructuring plan, which foresees 16 plant closures in North America and the elimination of 45,000 jobs by 2008.
Excluding those provisions, its loss came to 1.2 billion dollars, compared to 191 million dollars before exceptional items a year earlier.
That translated into a loss of 62 cents per share, a penny more than Wall Street's average forecast of 61 cents.
The Ford group's turnover in the quarter was down 6.0 percent at 32.6 billion dollars.
Ford said its poor performance in the past three months reflected "operating challenges" in North America, Asia-Pacific and Africa, and its Premier Automotive Group (PAG) division.
"We are committed to dealing decisively with the fundamental business reality that customer demand is shifting to smaller, more efficient vehicles," Mulally said.
"Our focused priorities are to restructure aggressively to operate profitably at lower volumes, and to accelerate the development of new, more efficient vehicles that customers really want."
Like its Detroit rival General Motors, Ford has struggled against an onslaught on its home turf by Asian carmakers led by Japan's Toyota.
At a time of high fuel prices, customers have been shunning the US manufacturers' gasoline-guzzling pick-up trucks and sport utility vehicles.
Ford's share price closed down 11 cents, or 1.4 percent, at 7.90 dollars.
Ford reiterated its target to save five billion dollars in cost reductions by 2008, which Banc of America Securities auto analyst Ronald Tadross called "modest" compared to a similar amount planned by the profitable Toyota.
"It looks natural that Ford's margins should go up significantly from current levels, but a close assessment of the competitive landscape makes it a significant challenge," he said.
PAG, comprising Jaguar, Volvo, Land Rover and Aston Martin, had a pre-tax loss of 593 million dollars in the third quarter, up from 108 million a year before. But Ford said its European operations should turn a profit this year.
Ford said in August it was looking to sell Aston Martin, immortalised by fictional superspy James Bond.
Announcing the earnings recalculation, Ford said that it had discovered that since 2001, certain interest rate swaps conducted by Ford Motor Credit Co. to hedge interest rate risk to the group's debt had been incorrectly stated.
"We will correct our accounting for these types of derivative instruments," said Ford's chief financial officer, Don Leclair.
"We remain committed to strong internal controls and reporting transparency."
Ford also revealed it would restate results from 2001 through to this year's third quarter, "to correct the accounting for certain derivative transactions" by its consumer credit division.
Ford's newly appointed chief executive, former Boeing executive Alan Mulally, said the results were "clearly unacceptable" and vowed to make more of the smaller, fuel-efficient vehicles pioneered by Japanese automakers.
Mulally, in an interview with trade publication Automotive News published after the earnings report, ruled out an alliance with Renault-Nissan in the near term.
The Ford CEO was quoted as saying that such a partnership would send Ford in the "wrong direction" as it would distract the company from its restructuring plan.
Mulally said he has had no contact with Renault-Nissan CEO Carlos Ghosn but Ford could consider alliance talks in the future -- "but right now I like our focus."
His comments came in the wake of Renault-Nissan's collapsed alliance talks with General Motors earlier this month. After that collapse, the French and Japanese partners said they were open to an alliance with another North American partner.
Ford's loss for the third quarter ended September 30 included heavy provisions for its hard-hitting restructuring plan, which foresees 16 plant closures in North America and the elimination of 45,000 jobs by 2008.
Excluding those provisions, its loss came to 1.2 billion dollars, compared to 191 million dollars before exceptional items a year earlier.
That translated into a loss of 62 cents per share, a penny more than Wall Street's average forecast of 61 cents.
The Ford group's turnover in the quarter was down 6.0 percent at 32.6 billion dollars.
Ford said its poor performance in the past three months reflected "operating challenges" in North America, Asia-Pacific and Africa, and its Premier Automotive Group (PAG) division.
"We are committed to dealing decisively with the fundamental business reality that customer demand is shifting to smaller, more efficient vehicles," Mulally said.
"Our focused priorities are to restructure aggressively to operate profitably at lower volumes, and to accelerate the development of new, more efficient vehicles that customers really want."
Like its Detroit rival General Motors, Ford has struggled against an onslaught on its home turf by Asian carmakers led by Japan's Toyota.
At a time of high fuel prices, customers have been shunning the US manufacturers' gasoline-guzzling pick-up trucks and sport utility vehicles.
Ford's share price closed down 11 cents, or 1.4 percent, at 7.90 dollars.
Ford reiterated its target to save five billion dollars in cost reductions by 2008, which Banc of America Securities auto analyst Ronald Tadross called "modest" compared to a similar amount planned by the profitable Toyota.
"It looks natural that Ford's margins should go up significantly from current levels, but a close assessment of the competitive landscape makes it a significant challenge," he said.
PAG, comprising Jaguar, Volvo, Land Rover and Aston Martin, had a pre-tax loss of 593 million dollars in the third quarter, up from 108 million a year before. But Ford said its European operations should turn a profit this year.
Ford said in August it was looking to sell Aston Martin, immortalised by fictional superspy James Bond.
Announcing the earnings recalculation, Ford said that it had discovered that since 2001, certain interest rate swaps conducted by Ford Motor Credit Co. to hedge interest rate risk to the group's debt had been incorrectly stated.
"We will correct our accounting for these types of derivative instruments," said Ford's chief financial officer, Don Leclair.
"We remain committed to strong internal controls and reporting transparency."
