Ford Motor Company back in the red

PLUMMETING US vehicle sales, particularly SUVs, has forced Ford to slash its full-year earnings forecast.

The company is also planning to axe a further five per cent of its North American workforce and close three of its 19 assembly plants to stem the flow of red ink.

The world’s number-two car-maker after General Motors also warned that its core automotive business may not be profitable this year "due to a weaker outlook for vehicle sales" because of rising oil prices.

Earnings guidance is being downgraded sharply, from a range of $US1.25 to $1.50 a share to between $1 and $1.25. It reported a net loss of US0.15 cents a share, or $US284 million, for the third quarter, its first loss since the fourth quarter of 2003.

This compares with net income of US0.15 cents a share, or $US266 million, in the third quarter of 2004.

Ford’s sales have fallen 1.3 per cent this year in the US despite a huge discount program to clear stock.

It reported a 38 per cent slide in first quarter profits in April to $US1.2 billion. At the time it admitted it would miss the target it had set of $7 billion in annual profits by 2006.

One of the few brights spots on the Ford balance sheet is its Asia-Pacific and African operations.

The 2005 third quarter combined pre-tax profit for Ford Asia-Pacific and Africa/Mazda was $US133 million, an improvement of $85 million compared with a profit of $48 million for the same period last year.

For the third quarter of 2005, Ford Asia-Pacific and Africa reported a pre-tax profit of $21 million, a decline of $14 million from a $35 million pre-tax profit a year ago.