Ford Motor Co. reported a fourth-quarter loss of $519 million, marking the first quarterly loss for the nation's second-largest automaker in eight years.
The losses contrast with a profit of $314 million, or 68 cents a share, posted by Ford during the 1989 fourth quarter, which included a $424 million charge for the sale of its Rouge Steel subsidiary. Ford's last quarterly loss was in late 1982, when it lost $236 million during the final quarter.Further, Ford Chairman Harold A. Poling said "near-term profitability will be difficult to achieve primarily because of the overall weakness in the U.S. and key overseas markets, aggravated by uncertainties surrounding the hostilities in the Middle East and continuing strong competitive pressures worldwide."
Poling also said Ford has intensified efforts to cut costs and conserve cash.
"Our North American Automotive Operations are accelerating their aggressive 1990-1995 cost-reduction plans, including salaried employee cost reductions," he said. "Overseas, we also have major cost-reduction efforts under way, including substantial reductions in personnel costs."
Ford's worldwide revenues during the quarter remained flat from year-ago levels, at $24.2 billion. But automotive sales during the latest quarter declined 7.5 percent to 1,436,000 vehicles.
For all of 1990, Ford earned $860.1 million, or $1.86 a share, down a steep 78 percent from 1989 earnings of $3.84 billion, or $8.22 a share. Worldwide revenues rose slightly to $97.7 billion, from $96.1 billion in 1989.
Ford's after-tax returns on sales fell to a scant 0.2 percent last year, compared with 3.9 percent in 1989. Cash and marketable securities of its automotive operations were $6.1 billion at year end, with debt at $7.4 billion. Capital spending for the year was $7.3 billion.
Despite maintaining a profit for all of 1990, Ford lost $17 million in its U.S. automotive operations, virtually erasing its $1.1 billion profit earned in that sector during 1989.
Ford blamed lower vehicle production, high buyer incentive costs and higher new product development expenses for the steep decline.