Anusha
01-26-2007, 08:13 AM
Thursday January 25, 2007
How do you lose $12.7 billion and stay in business?
It's a question many who work for the Ford Motor Company may be asking themselves Thursday, after the giant automaker announced it lost that amount in 2006.
It's the biggest hit the pioneering car company has taken in its 103-year history.
The loss is far worse than its previous deficit of $7.39 billion set in 1992.
Most analysts who watch the automotive industry closely were expecting Ford to take a dive, but this was beyond even their expectations.
The company has been hit hard by foreign competitors who have literally been stealing its thunder. Rising gas prices, a turn to more fuel efficient cars, union wage demands and the perception that Japanese vehicles are better quality have all impacted the bottom line.
And in the end, the answer to their old slogan "Have you driven a Ford lately?" has been a resounding "no".
The company admits it's trying to turn things around. But that's coming at the expense of the little guy.
Ford's restructuring plan includes closing 16 plants and cutting 45,000 jobs across North America - including an engine factory in Windsor.
Fortunately, the automaker intends to slightly expand its operations in Oakville, so workers there are mostly safe for now.
But overall, things aren't looking good. Because of a drop in demand, Ford reduced production by 22 percent and instituted a big buyout offer for union members that saw another 38,000 jobs disappear. Sales in the U.S. alone are down eight percent.
The company hopes to be back in the black by 2009, but until then times remain tough for the firm that virtually created the entire industry a century ago.
:shocked: :shocked: :shocked:
How do you lose $12.7 billion and stay in business?
It's a question many who work for the Ford Motor Company may be asking themselves Thursday, after the giant automaker announced it lost that amount in 2006.
It's the biggest hit the pioneering car company has taken in its 103-year history.
The loss is far worse than its previous deficit of $7.39 billion set in 1992.
Most analysts who watch the automotive industry closely were expecting Ford to take a dive, but this was beyond even their expectations.
The company has been hit hard by foreign competitors who have literally been stealing its thunder. Rising gas prices, a turn to more fuel efficient cars, union wage demands and the perception that Japanese vehicles are better quality have all impacted the bottom line.
And in the end, the answer to their old slogan "Have you driven a Ford lately?" has been a resounding "no".
The company admits it's trying to turn things around. But that's coming at the expense of the little guy.
Ford's restructuring plan includes closing 16 plants and cutting 45,000 jobs across North America - including an engine factory in Windsor.
Fortunately, the automaker intends to slightly expand its operations in Oakville, so workers there are mostly safe for now.
But overall, things aren't looking good. Because of a drop in demand, Ford reduced production by 22 percent and instituted a big buyout offer for union members that saw another 38,000 jobs disappear. Sales in the U.S. alone are down eight percent.
The company hopes to be back in the black by 2009, but until then times remain tough for the firm that virtually created the entire industry a century ago.
:shocked: :shocked: :shocked: