Ford offers buyout to all hourly workers,loses $2.8B in Q4
DEARBORN, Mich. (AP) — Ford Motor (F) said Thursday it will offer buyout and early retirement packages to all 54,000 U.S. hourly workers in an effort to cut more jobs and replace workers with those making a lower wage.
It announced the buyout plan on the same day it reported a loss of $2.8 billion in the fourth quarter and $2.7 billion for the year as gains in worldwide markets outside the United States were dragged down by continued weakness in North America.
Chief Executive Alan Mulally said the new round of buyouts was negotiated with the United Auto Workers union.
He said the first round would be offered immediately to workers who had been employed at already closed plants in Atlanta, St. Louis, Edison, N.J., and Norfolk, Va. Those offers close Feb. 28.
Employees are expected to leave the company by March 1, Mulally said during a conference call with reporters and industry analysts to discuss the company's 2007 earnings. Although the plants have been closed, some workers continue to get salary and benefits under the job protection provisions of the company's contract with UAW.
A message seeking comment was left with a UAW spokesman.
The second round of buyouts would go to workers at all other U.S. Ford locations, opening the week of Feb. 18 and closing March 17. Mulally said workers who take packages in this round would likely leave the company starting April 1, with all of them gone by year's end.
The company said it has reduced its total U.S. hourly workforce by 35,500 since the end of 2005. Ford said it had 99,500 at the end of 2005, and that figure dropped to 64,000 by the end of last year.
It also said its straight-time auto assembly capacity has been reduced from 3.6 million vehicles in the fourth quarter of 2005 to 2.9 million in the same quarter of last year, due largely to personnel reductions.
Mulally said the company's operations are improving but the outlook for U.S. sales in 2008 is grim.
Ford lost $1.30 a share in the fourth quarter, narrower than a loss of $5.6 billion, or $2.98 a share, in the year-earlier quarter. The full-year results, which resulted in a loss of $1.35 a share, were significantly better than 2006, when Ford lost $12.6 billion, or $6.72 a share.
Ford reported revenue of $44.1 billion for the fourth quarter, up from $40.3 billion. The company reported full-year revenue of $172.5 billion, up from $160.1 billion.
Excluding special items, Ford lost 20 cents a share for the quarter and 19 cents a share for the year, in line with Wall Street's expectations. Analysts surveyed by Thomson Financial had predicted a loss of 19 cents a share for the quarter and 17 cents a share for the year.
Special items for the year included a $705 million charge for separation programs in North America and a $208 million gain from the sale of Aston Martin.
Ford lost $3.5 billion for the year in its North American automotive operations, narrower than a loss of $6 billion in 2006. Ford said higher net pricing and lower costs helped offset losses from lower sales and unfavorable exchange rates. Full-year revenue for the region was $70.5 billion, up from $69.4 billion a year ago.
In the fourth quarter, Ford lost $1.6 billion in North America, compared with a loss of $2.7 billion in the year-ago quarter. Fourth-quarter revenue was $17 billion, up from $15.1 billion a year ago. Ford took a hit in the U.S. in 2007 when it reduced low-profit sales to rental-car fleets by a third.
Ford reported a full-year profit of $997 million in Europe, more than double its 2006 profit of $455 million. Ford said the improvement was due to continued cost reductions, higher net pricing and higher sales. Full-year European revenue was $36.5 billion, up from $30.4 billion in 2006. Ford reported a fourth-quarter profit of $223 million on revenue of $10.4 billion in Europe, up slightly from $218 million on revenue of $8.8 billion a year ago.
Earnings also more than doubled in South America, where Ford had a full-year profit of $1.2 billion, up from $551 million a year ago. Full-year revenue improved to $7.6 billion from $5.7 billion a year ago. For the quarter, Ford posted a profit of $418 million in the region, up from $114 million a year ago, and revenue of $2.4 billion, double its 2006 revenue.
Ford's Premier Automotive Group, which includes the luxury Jaguar, Land Rover and Volvo brands, posted a full-year profit of $504 million, compared with a loss of $344 million a year ago. Ford said it reduced costs across all brands and saw higher sales and higher net pricing at Land Rover. Full-year revenue for the brands was $33.2 billion, up from $30.0 billion in 2006.
Ford doesn't break out results for its luxury brands, but said Volvo incurred a loss for the year. Ford recently decided to keep Volvo but is planning to sell Jaguar and Land Rover. Earlier this month, Ford selected Indian carmaker Tata Motors as the top bidder for the two British brands.
The luxury brands posted a $59 million profit for the fourth quarter, compared with a profit of $174 million in the year-ago quarter. Ford said the decline was explained by adverse currency exchange rates and product mix at Volvo, which broke even for the quarter, while Jaguar and Land Rover made a profit. Revenue for the unit was $9 billion for the quarter, up from $8.6 billion a year ago.
Ford's credit division, Ford Motor Credit, posted a $775 million profit for the year, down from $1.3 billion a year ago as it was hit by higher borrowing costs, higher depreciation expenses for leased vehicles and other factors.
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Print | posted on Thursday, January 24, 2008 10:50 AM