Ford reports 1.2 Billion Loss in First Quarter

The Ford Motor Company swung to a $ 1.2-billion (U.S.) loss, its biggest in more than four years, as sales declined and costs to cut jobs and close plants increased.

The automobile manufacturing Company-headquartered in Dearborn, Michigan, United States, reported a 1.2-billion U.S. dollar loss in the first quarter as it started an expensive restructuring effort amid weak U.S. sales, leaving Ford executives frustrated but driven them to go ahead with their plan to cut 30,000 jobs and remake the No. 2 auto maker.
Founded by Henry Ford, the automaker-Ford in its twentieth century’s period of greatest productivity along with General Motors and Chrysler were known as Detroit's "Big Three" automaker companies that dominated the American auto market.

The first quarter deficit of 64 cents per share contrasted with a profit of $ 1.21 billion, or 60 cents per share, in the 2005 first quarter. Revenue sank 9 % to $ 41.1-billion from $ 45.1-billion a year ago, as auto sales in the United States declined. It was Ford's largest fall off since the fourth quarter of 2001, when the company posted a $ 5.07-billion loss due to $ 4.1-billion in costs for a previous restructuring plan of Chief executive William Clay Ford Jr., which also contained costs to cut jobs and close plants.

Chief executive William Clay Ford Jr. had ingeminated yesterday that the current plan will restore North American profits by 2008. The company reported that it is looking forward to cut second-quarter auto production in North America 1.7 percent from year-earlier levels, to 890,000 cars and trucks.

Keeping out the one-time items such as restructuring charges, Ford said it earned $ 458-million, or 24 cents a share just below analysts' estimates. Ford's stock fell 63 cents, or 7.92 per cent, to close at .32 on the New York Stock Exchange, approaching its 52-week low of $ 7.13.

The sales results of Ford were in blunt contrast to its bigger cross-town competitor General Motors Corp., which reported record quarterly revenue and a smaller loss for the quarter yesterday. GM’s deficit of $ 323-million for the quarter compared with a loss of $ 1.3-billion the previous year. General Motors has already started its own North American restructuring after losing $ 10.6-billion last year.

Ford chairman Bill Ford said in a statement, “This transformation is not going to be quick and it isn't going to be painless, it involves risks and the financial rewards won't be immediate. But in the end, I believe we'll get there.