Ford Motor Company has announced that it has lost $129 million in the third quarter of this year. In addition to steep losses, the automaker also indicated it burned through $7.7 billion in cash. As if this news wasn’t depressing enough, Ford also announced it will be cutting even more jobs, about 2,260 white-collar jobs to be exact. As the North American automotive market continues to limp along, Ford is struggling to make progress.
The dismal third quarter reporting was preceded by Ford’ worst quarter ever, where it lost about $8.7 billion in the second quarter. However, this quarter’s cash burn was far higher, and reflected pretax automotive losses, changes in working capital and payments to its credit arm to reduce interest rates for new car buyers. Because of immediate needs within this quarter, Ford said it would not expect the steep burn rate to continue into the next quarter.
Although forecasting the liquidity of Ford and other automakers is difficult considering the current economic conditions, slipping sales have hampering many of Ford’s efforts to boost sales, even despite having many all-new models within its lineup. I-5 Ford has enjoyed the addition of new models such as the latest Ford Focus and Flex crossover, but sales across the nation continue to be low. Auffenberg Ford and others are still waiting for more vehicles that are coming down the Ford pipeline, such as a the new Focus and Fiesta from Europe.
With a global economic slowdown being felt by Ford and their dealers, the domestic automakers have continued to lobby the Bush administration to provide a stimulus to help them stay afloat, which a Houston used car dealers‘ buyers hope happens soon. Ford in particular is also seeking help from European governments as well.
Ford’s North American production is expected to be reduced by about 40,000 units this quarter. These production cuts will hopefully allow Ford to better align production with falling demand. But Ford also wants to increase small car production, which Ford dealer Denver are certainly happy about as their customers demand efficiency.
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Updates on Ford’s finances can be found here.
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