Ford Faces Steep Losss

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Last updated at: (Beijing Time) Thursday, December 06, 2001

Ford Faces Steep Losss

Ford Motor said Wednesday that its fourth-quarter losses will be larger than expected mainly because it is boosting credit loss reserves due to the weakened U.S. economy.

Ford Motor said Wednesday that its fourth-quarter losses will be larger than expected mainly because it is boosting credit loss reserves due to the weakened U.S. economy.

The automaker said it expected to report a loss of 50 cents a share, before one-time items, for the last three months of the year.

Previously, the company said it expected an improvement from its third-quarter loss of 28 cents a share, although turning a profit would be difficult. Analysts surveyed by Thomson Financial/First Call had been expecting a loss of 14 cents a share for the quarter.

The primary reason for the lower forecast was increased credit loss reserves reflecting weakened economic conditions, it said. In addition, Ford said marketing and product costs remained at high levels.

The warning follows an announcement Monday that Ford will reduce retirement and health benefits for 45,000 white-collar workers and lay off 630 people to save about $300 million a year.

Ford has been plagued by eroding sales, questions about vehicle quality and the ongoing Firestone tire crisis.

Ford announced in August it would cut 4,000 to 5,000 salaried positions by the end of 2001.

More cutbacks are expected when Ford details a broader restructuring plan next month.

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