The new year could not come quickly enough for US car maker Ford after posting its worst ever results in 2006. The company lost a record ten billion euros. Chief Executive, Alan Mulally explained away the bad news, saying Ford had made an effort to overhaul itself , and was ahead of schedule in its restructuring, but that financial results had yet to show any signs of progress.
Most Wall Street analysts had forecasted a far smaller loss. Rising fuel prices have impacted on all car manufactures but Ford is heavily reliant on sales of pick-up trucks and four-wheel drive vehicles for its profits – both of which have slumped as petrol has risen.
Then there’s the fierce competition from Japanese rivals such as Toyota, whose profit in 2005 incidentally matches the Ford loss last year. About 40 percent of Ford’s production line workers, some 30,000 employees have agreed to leave in return for a buy- out and around 14,000 office jobs are to go. 16 Factories in North America are due to close. Mulally says he plans to operate the company profitably at lower volumes and with a product mix which better reflects an increased consumer demand for smaller, more fuel efficient vehicles.