Volvo Loses Big for Ford, While Jag and Land Rover Profit
Ford’s Premier Auto Group was profitable in 2007 as Jaguar and Land Rover, which are now on the auction block, ended the year in the black. The small profit offset losses at Volvo, which was badly hurt by the decline in the value of the U.S. dollar.
Don Leclair, Ford’s chief financial officer, disclosed the information about Ford’s three European brands Thursday as the company reported a net loss of $2.7 billion for 2007. Ford’s losses for the past two years now exceed $15.3 billion and the company does not expect to be profitable in 2008, Ford executives said, citing the continuing pressure from slow economic growth in the U.S.
Leclair and Ford president and CEO Alan Mulally reiterated while Ford will proceed with the sale of Land Rover and Jaguar, it is planning hang on to Volvo despite the new operating loss and a one-time write-off of $2.4 billion linked to the sliding dollar. Ford didn’t disclose the size of the operating loss. The red ink is certain to increase pressure on Volvo’s management to reduce costs or find a way to build vehicles in the U.S.
Mulally, however, also emphasized Ford was making steady progress towards returning Ford to profitability in 2009 despite the economic difficulties in the United States, which has already forced the company to trim first quarter production.
Mulally said Ford’s market share in the U.S. dropped to 12.8 percent in 2007 when it wound up trailing Toyota Motor Corp. in total sales in the U.S. for the first time ever.The company also is finalizing a new “global product plan” that will feature more crossovers and passenger cars, he said.
Leclair said the blue-collar buyout offers will be very similar to the early retirement package Ford offered in 2006 when it was starting its restructuring. Some 12,000 Ford employees or about 22 percent of the company’s hourly workforce was now “retirement eligible,” meaning they had worked for Ford for 30 years or more, Leclair said.
© Source: thecarconnection
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