Dearborn, Mich. – Ford Motor Co.’s blue oval continued to bleed red ink in the third quarter, with the company posting a $5.8 billion loss Monday because of sagging North American sales and huge costs associated with a massive restructuring plan.
It was the largest quarterly loss in more than 14 years for the nation’s second-biggest automaker, and company officials predicted things would get worse in the fourth quarter as market share drops and Ford pays for further plant closures to bring manufacturing in line with lower demand.
Ford’s losses come to $7.24 billion for the first nine months of the year, compared with a $1.87 billion profit for the same period last year.
Some analysts worried that Ford could face a cash squeeze before it begins to realize savings from its restructuring plan.
“It’s going to take awhile for those benefits to be evident in better earnings and cash flow,” said Moody’s Investors Service analyst Bruce Clark, who predicted that Ford would not see substantial savings until 2009.
Ford could be in dire shape if the economy slows or if there’s a strike as the auto companies negotiate with the United Auto Workers union next year, Clark said.
Also Monday, Ford said it plans to restate its earnings for 2001 because of accounting errors involving derivative transactions in its credit company. The restatement is expected to affect financial results from 2001 until the third quarter of this year.
