Thursday, July 24, 2008
DETROIT — The Ford Motor Company, stunned by abysmal sales of its most profitable vehicles and a sudden shift in consumers’ tastes, said Thursday that it lost $8.7 billion in the quarter, its worst ever, and would overhaul its North American plants to focus on small cars.
The loss, equal to $3.88 a share, was mostly the result of $8 billion in write-downs because of falling demand for and resale values of gas-thirsty pickups and sport utility vehicles in the United States. Ford took charges of $5.3 billion charge related to lower asset values in North America and $2.1 billion on the lease portfolio at its financing arm, the Ford Motor Credit Company.
The news sent Ford shares tumbling nearly 10 percent in morning trading.
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Excluding the write-downs and other charges, the company lost $1 billion from continuing operations, down from a profit of $483 million a year ago. It lost $1.3 billion in North America, where $4-a-gallon gasoline has caused consumers to clamor for more fuel-efficient vehicles.
Ford said it would cut production for the rest of the year by an additional 105,000 vehicles, for a total reduction of 26 percent compared with the second half of 2007.
Then, it plans to overhaul three truck factories in North America so they can build small cars and double production of gas-electric hybrid vehicles next year.
This article was posted: Thursday, July 24, 2008 at 10:20 am