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DEARBORN, Mich. (Jan. 29) - Ford Motor Co. said Thursday it lost $5.9 billion in the fourth quarter and burned through $5.5 billion in cash, pushing the automaker to the worst annual loss in its 105-year history as sales slumped worldwide.

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The second-largest U.S. automaker lost $14.6 billion in 2008 but said it still would not seek federal loans. With a precarious year ahead, Ford announced plans to cut 1,200 jobs at its credit arm and borrow $10.1 billion from an existing line of credit in case the economy worsens.

Chief Executive Alan Mulally said on a conference call with reporters and industry analysts that the company plans further restructuring actions that will be announced at a later date.

Ford said it lost $2.46 per share in the three months ended Dec. 31, compared with a loss of $2.8 billion, or $1.13 per share, for the year-ago period.

Revenue fell to $29.2 billion, down 36 percent from $45.5 billion in the fourth quarter of 2007.

The results missed Wall Street's expectations. Excluding special items, the company reported a $1.37 per share loss for the quarter. On that basis, analysts polled by Thomson Reuters expected a fourth-quarter loss of $1.30 per share on revenue of $27.1 billion.

Ford shares fell 5 cents, or 2.5 percent, to $1.98 in afternoon trading.

Dearborn-based Ford announced that it has reached agreement with the United Auto Workers union to end the "jobs bank" in which laid-off workers get most of their pay, although the effective date is still being negotiated.

Chrysler LLC ended its jobs bank Monday, and General Motors Corp. has said its will end next week.

Ford also said it would not come to the aid of struggling parts supplier Visteon Corp., unlike GM, which has spent billions helping its former parts unit Delphi Corp. emerge from bankruptcy. Ford spun off Van Buren Township-based Visteon in 2000.

"I think Ford and Visteon are truly in different places," Mulally said. "They have really diversified their portfolio."

Ford said special items accounted for $1.4 billion of its fourth-quarter net loss, largely due to personnel reductions and investment losses on money set aside for a union-administered trust that will take over retiree health care costs in 2010. Ford has about $2 billion in investments in that account, which can be used to fund operations if needed.

The Treasury Department agreed last month to lend $13.4 billion to GM and $4 billion to Chrysler, saving Ford's U.S-based competitors from bankruptcy.

Company spokesman Mark Truby said Ford's position on seeking federal loans was unchanged. It asked for a $9 billion line of credit from the government but has said it has enough cash to make it through 2009 and doesn't intend to use government loans unless economic conditions worsen.

"We don't plan to or foresee using it," Truby said Thursday.

Ford's cash burn rate slowed from $7.7 billion in the third quarter. The company said it had $13.4 billion cash on hand as of Dec. 31 and plans to receive the $10.1 billion from its secured credit line Tuesday.

"We took this action because of our concerns about the growing instability of the capital markets," Mulally said of the borrowing.

Chief Financial Officer Lewis Booth said the company is tapping the credit line only to make sure it's available and not to fund its operations. Ford hasn't needed a government bailout because it borrowed funds and set up credit lines totaling $23.5 billion in 2006 and 2007 to prepare for a downturn.

"We are confident that our burn rate will be substantially slower in 2009," Booth told reporters Thursday morning.

He said Ford cut costs in its automotive sector by $1.4 billion in the fourth quarter compared with the same time in 2007, and $4.4 billion for the full year.

Ford's annual loss of $14.6 billion compares with a loss of $2.7 billion in 2007. Before 2008, the company had its worst year in 2006 when losses reached $12.6 billion.

Booth said Ford still is on track to break even in 2011, but the company anticipates worldwide sales to fall more than 10 percent in 2009. Ford sees improvement later this year, however, as government stimulus packages take effect.

"Things are so volatile," Booth said. "This is unprecedented."

Ford said it plans to invest $14 billion over seven years to produce fuel-efficient vehicles, allowing it to qualify for up to $5 billion in loans from the U.S. Energy Department by 2011.

Congress allocated $25 billion to the Energy Department for loans to automakers so they can develop new fuel-efficient technologies.

Vehicle sales in the U.S. are at their lowest levels in 26 years as consumers face tight credit markets and economic uncertainty. Ford's U.S. sales plunged 20.5 percent in 2008, and its market share fell slightly to 15 percent from 15.4 percent in 2007.

That uncertainty has spread to Europe as well, where sales have dropped. Markets such as South America, typically a bright spot for Ford, are also slowing.

The company posted a quarterly pretax profit of $79 million from its investment in Mazda Motor Co. In November, Ford sold a large portion of its 33.4 percent stake in the Japanese automaker.

Ford Motor Credit Co. reported a pretax loss of $372 million, compared with a profit of $263 million in the year-ago quarter. The financing arm said the job cuts it announced Thursday would cut 20 percent of its work force and were needed because of lower auto sales and the planned reduction in receivables from Mazda, Jaguar and Land Rover. Ford sold the latter two brands in March to Tata Motors Ltd. of India.

Ford is still considering a sale of its Volvo unit, which lost $736 million in the quarter.

Copyright 2009 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

2009-01-29 07:06:42

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284 comments

Ddokken69 12:11:39 AM Jan 31 2009

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I own a small auto repair shop in Virginia and have been working on cars for the better part of twenty years now, and all I can say is the big three, Ford, GM, and Chrysler are in the shape the in now because of the junk that they build. All three makers have issues with certain areas of their vehicles that are just piss poor quality and design. Most of the problems were doomed to fail from the start. For instance, Ford was one of the first to start using the plastic intake manifold on their cars. Now Im no rocket scientist but what the hell were they thinking when they came up with that idea knowing that motors deal with intense heating and cooling issues that plastic is not suitable for. Then GM and chrysler have some of the worst emission systems ever made that are always setting off the check engine light causing owners to have to have their cars scanned for problems. Now for instance GM has had another brainfart in getting all their alternators which say Delco on them but are made

ASmith8397 08:50:18 AM Jan 30 2009

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I own a 1993 Ford Tempo and it is still running very good. I have no plans to buying a newer model because I might not have as much luck with it. Ford will always be my top choice for buying cars.

Blovetheusa 08:42:40 AM Jan 30 2009

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At least Ford is standing up and acting like a real business. As a lifelong GM guy I can promise you that when they sat in front of the morons in congress and begged for money they lost my business. We have many company vehicle that are replaced every two years and GM was not invited to bid on the 2009-2010 business. Ford was the only American car company that was.

LTCRO 08:12:59 AM Jan 30 2009

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I have no sampathy for american car makers, the last ford I owned (2001 F-150) was a sharp truck but even at low milage parts just fell off it. I really liked the truck but the workmanship sucked. Even when I was in an accident thet totalled the truck the airbag didn't work. The Chevy vette I own now is so undependable I had to buy a Honda just to use as a primary. Build a dependable vehicle and stop wrapping yourself in the flag.

Lercel4 08:05:43 AM Jan 30 2009

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I own 2 Chevy SUV`s, but I respect that this company is not wanting to take that dirty Government money.........................our money

FriChi62 07:58:20 AM Jan 30 2009

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They should ask ACORN for the money. They're getting $5.2 billion, curtesy of our tax dollars.

FERALTYGER 07:22:19 AM Jan 30 2009

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If Obama and all his sycophants weren't crooks (this includes Bush) they would have told the banks and big business to look up the definition of capitalism. Big business and government has always been in bed together. It's the only reason we ever go to war anymore. The crook machine in Washington also should have said to the auto industry begging for handouts (of which Ford hasn't yet) that if they want a bailout they'd only get it if they invented an aircar (they do exist) so that we could get the damn vampire OPEC, off America's neck. Instead Obama is freeing terrorists, telling the Arab world they have nothing to fear from America, and overrulling the 3 branch government system by signing into law that over turns a Supreme Court ruling and opens up the court system to tons of litigation. The change you wanted isn't the change we're already all having to deal with sheeple.

GeorgePetersenJr 06:59:34 AM Jan 30 2009

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How does their new MUSCLE CAR lineup look ??? ... It is guaranteed to spend more time in the shop than all previous models ... They might even sell one or two (in Saudia) in the next year or three ...

Killerbeez007 06:50:10 AM Jan 30 2009

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I have a Mustang shelby 500 :)

LAIL MTN 1 04:55:33 AM Jan 30 2009

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I agree with Bingling. Check out the CEO'S salary and benefits. In all the big companies this is a constance problem. Cut employes and their salaries. Put more work on all other employes. Unions are to blame also. If the CEO's and Unions would conform to give a dawm about the company instead of selfishness this would still be a great country. Also the government can't keep up the people that don't want to work. If you have to take a drug test to get a job. Why don't the people on welfare and unemployement have to take the same test. Think what that will save the tax payers.Uncle Bill

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