Ford to stop losses by 2011

Ford to stop losses by 2011

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By Drew Johnson

Ford may have posted a first quarter loss of $1.43 billion but the Michigan automaker says that its restructuring program is right on track. Ford announced on Thursday at its annual shareholder meeting that the company is on pace to break-even or even turn a profit in 2011.
Helping Ford’s cause, shareholders approved Ford’s plan to fund retiree healthcare at the meeting, according to Automotive News. The move should not only help Ford towards its goal of profitability but will likely keep the Dearborn-based automaker out of bankruptcy court.
Ford Executive Chairman Bill Ford acknowledged the entire industry is facing an “economic crisis of historic proportions”, but added he was confident in Ford’s far-reaching restructuring plans.
Ford CEO Alan Mulally echoed Ford’s sentiments. “We are confident that we will not only survive this downturn, but that we will emerge as a lean, globally integrated company poised for long-term profitable growth,” he said. Ford is the only of the Big Three not to have received government funding.
Ninety-eight Ford shareholders attended the meeting, including the Rev. Jesse Jackson.
15 COMMENTS
1. Borat441 days ago
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  I think I’ve heard this before.
  
  Reply
2. johnnycanuck441 days ago
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  “Billy. Billy! The other day, I was going down on my girlfriend, I said to her, “Jeez you got a big pussy. Jeez you got a big pussy.” She said, “Why did you say that twice?” I said, “I didn’t.”
  [Billy stares blankly]
  See, cuz of the echo.”
  
  Reply
3. Borat441 days ago
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  Johnny, Brazilian shaved cats have a definite affect on you
  
  Reply
4. JakeK66441 days ago
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  I think Johnny’s been Cheesing too much…But HILLARIOUS!
  
  Reply
5. carstuff441 days ago
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  I posted this on the last Ford subject way down the row and doubt anyone read it so I will post it again.
  
  Very good news that the CEO feels Ford will be profitable in 2011 but they will be under $10 billion in cash by at least the first quarter of 2010 if they continue to burn over $1 billion /month as they have been. This will mean they will need to come up with more money from somewhere.
  
  Ford lost $1.8 billion in the first quarter, however they burned thru $3.7 Billion in cash or $1.2 billion/month.
  
  “On an after-tax basis, Ford lost $1.8 billion in the quarter, compared with a profit of $477 million a year ago.
  
  Ford closed the quarter with $21.3 billion in automotive cash on hand. Cash flow remained negative at $3.7 billion in the quarter.”
  
  Reply
6. yarddog82abn441 days ago
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  FUNNY, I ALWAYS THOUGHT YOU POST A “LOST” SO THAT YOUR COMPANY CAN GET A TAX CREDIT…
  
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7. Bankruptcy2009441 days ago
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  Carstuff you don’t run Ford’s Books and I don’t care even if you were an Excellent CPA of which I can tell your NOT. But Ford does have Cash coming in every day on a month to month and the burn as you have been obviously mesmerized by what the media told you on the cuff what Ford may be burning though does not account for the amount of Cash coming in the Front DOOR. Ford does Bring home plenty of cash so there you GO. Your Wrong again!
  
  Canuck you got that all wrong to. Your line should be as you stole that from Arnold from Predator I told my wife that i’d like alittle pussy, she said ‘Me too, mine’s as big as a house’” … Jeez you got a big pussy.” She said, “Why did you say that twice?
  
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8. carstuff441 days ago
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  Bankruptcy, I am not a CPA. Not sure how I am wrong since I am only listing the data and not making any opinions or stating anything that could be construed as wrong. I do not claim to run their books.
  
  I will ask again. Can someone explain the debt in the yahoo finance link and the $150 billion debt while GM has $50 billion? Am I missing something?
  
  All 3 domestics have cash coming in. Unfortunately more is going out to pay legacy and debt cost. That is why all 3 have huge monthly cash burns of over $1 billion each. This is what bankruptcy will partially take care of for Chrysler/GM.
  
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9. pollax441 days ago
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  Ford has 2 types of debt. Their automotive division has about $15 billion of debt while the financing division is holding the rest.
  
  The reason the financing division has so much debt is because of all the auto loans that are outstanding. Once everyone pays back their auto loans, Ford will have a lot less debt.
  
  GM doesn’t have a financing division anymore so that’s why they appear to have a lot less debt than Ford but in reality it is Ford that has a lot less debt.
  
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10. carstuff440 days ago
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  Pollax, thanks for the answer on the debt. That does make sense! Does Ford own 100% of their finance company?
  
  I guess Ford could always bankrupt only the finance arm and lose the debt that way.
  
  Where did you get the $15 billion? In just the last 6 months they have borrowed $21.5 billion and none of that is paid off.
  
  OK I found this, Ford is in very good shape debt wise.
  
  The Ford Motor Company has announced that it has completed more of its financial restructuring initiatives, lessening its debt by some $9.9 billion (from a starting place of $25.8 billion at the end of last year). The company says this move will lower its annual interest costs by more than $500 million. Ford and its financing arm, Ford Credit, are using 468 million shares of stock and $2.4 billion in cash to reach that figure.
  
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11. carstuff440 days ago
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  Pollax, so how much cash does Ford have on hand?
  
  I think this is it:
  
  “Ford lost $1.4 billion in the first quarter, after losing a record $14.7 billion in 2008, and decreased its cash from $28.7 billion in the first quarter of 2008 to $21.3 billion in cash for Q1 2009. In the first quarter the company also consumed $3.7 billion in cash.”
  
  So the $21 billion should keep them liquid for one year ($10 billion liquidity wall assumed) if they can get the cash burn rate down to $1 billion. Hopefully by then sales will be trending back up and cash burn will slow.
  
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12. leftwingagenda440 days ago
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  while issuing stock was a bit of a bummer, that’s a sweeter pill to swallow than standing hat in hand before the fed…when ford’s stock had been beaten down below 2 bucks a share, i figured some of that beat down was irrational, because gm and ford were seemingly being lumped together as failing companies…ford has continued to differentiate themselves, though, so that made the under-2 bucks a share price seem like a bargain…so far, that’s played out pretty well, and i don’t see that trend changing in the short term…
  
  i am curious how many dealerships they have, though, and whether they’d benefit from ditching some…
  
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13. Bubs Solo440 days ago
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  carstuff
  reuters had an article recently and stated that the car division had approx 16b of debt. I too did not understand the discrepancy between that number and the yahoo finance reports until now.
  Thanks for the explanation Pollax.
  
  Reply
14. Bubs Solo440 days ago
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  Carstuff
  Even if sales stay $hitty Ford’s cash “burn” should be lessened because of the deals with the unions, Debt conciliation(smaller interest payments to lenders) and reduction in fixed operations costs(improved quality and hence fewer warranty repairs).
  
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15. carstuff440 days ago
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  Bubs, I am hoping that is true. However they used up about $1.3 billion per month in the first quarter. We will have to wait and see what happens in the 2nd quarter.
  
  Asw far as dealers Ford is almost as bad as GM with the number of dealers. I actually do not buy into the argument that too many dealers cost the OEM’s much money. Yes there is some extra GM manpower in the field but it not that huge of a cost. The biggest issue is profitability at dealers since they are competing with each other instead of other marques dealers. This also hurts resale value.
  
  Reply
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