DEARBORN, Michigan: The misery of Ford Motor Company seemingly knows no bounds, with the automaker last week posting the worst ever annual result in its 103-year history, a stupefying loss for 2006 of $12.7 billion (€9.82bn; £6.47bn).
The figures are worse than most analysts expected and reflect how Ford's grip on the core North American market continues to slip as drivers lose their appetite for SUVs and other gas guzzlers. In addition, warns Ford ceo Alan Mulally, the market will remain tough for the next three quarterly periods.
The former Boeing executive, who was appointed to the top Ford job in September, acknowledges the climb out of the slump will be arduous, but he remains firm in his assessment that it can be achieved.
He is confident the much-trumpeted Way Forward recovery plan will deliver results. The company is shedding around 38,000 hourly workers and 14,000 white-collar employees. It has also reached agreements to close sixteen plants in a bid to become more competitive.
Mulally comments: "We know where we are, we are dealing with it, and we are on plan."
He adds that the company will continue to review its costs, looking for more cuts as it gains efficiencies from building more cars worldwide in more efficient factories.
Cfo Don Leclair says the company is on target to achieve its goal of cutting $5bn in annual costs by 2008, compared with 2005 levels.
Industry observers believe the challenge will lie in predicting consumer tastes, managing the long lead times to develop new cars and trucks and getting the vehicles to market.
Data sourced from Financial Times online; additional content by WARC staff