DEARBORN, Mich. — Ford Motor Co. today reported a first quarter net loss of $1.4 billion, or 60 cents per share. This compares with net income of $70 million, or 3 cents per share, in the first quarter of 2008.
Ford’s first quarter 2009 pre-tax operating loss, excluding special items, was approximately $2 billion, a decline from a profit of $686 million a year ago. On an after-tax basis, Ford lost $1.8 billion in the first quarter, or 75 cents per share, compared with a profit of $477 million, or 20 cents per share, a year ago.
"Our results in the first quarter reflected the extremely difficult business environment and weak demand for autos around the world," said Ford President and CEO Alan Mulally. "Despite the challenges, Ford made strong progress on our transformation plan by gaining share with strong new products, slowing operating-related cash outflows, reducing outstanding debt, lowering our structural costs and reaching new agreements with the UAW."
Ford finished the first quarter with $21.3 billion in automotive gross cash and reiterated that based on current planning assumptions it does not expect to seek a bridge loan from the U.S. government.
In the first quarter, Ford took a number of actions to strengthen its overall business, and also started discussions with interested parties regarding the sale of Volvo.
Ford and Ford Motor Credit Co. executed actions to reduce Ford’s debt obligations by $10.1 billion at par value and lower the company’s annual cash interest payments by more than $500 million. Of that $10.1 billion, $2.4 billion in debt obligations were reduced in the first quarter and will be reflected in Ford’s first quarter financial statements. The remainder was reduced on April 8, and will be reflected in Ford’s second quarter results. In addition, as previously announced, Ford drew $10.1 billion under its secured revolving credit facility, providing protection against the instability of the capital markets and the uncertain state of the global economy.
Additionally, Ford negotiated and ratified modifications to its collective bargaining agreement with the United Auto Workers union that will lower the company’s overall labor costs in the U.S. by about $500 million annually. The company announced a new buyout program for U.S. hourly employees that will be completed in the second quarter. Ford also reached an agreement in principle with the UAW which, subject to court and other approvals, would allow the company to settle up to half of its future cash VEBA obligations with Ford common stock.
Based on current planning assumptions, Ford said it remains on track to meet or beat its financial targets, including the target for its overall and North American automotive pre-tax results to be breakeven or better in 2011, excluding special items.
"The successful debt restructuring, coupled with previously announced agreements with the United Auto Workers, will strengthen Ford’s balance sheet and will result in significant savings going forward," said Lewis Booth, Ford executive vice president and chief financial officer. "On the product side, our global lineup has never been stronger. We remain hopeful that the government stimulus actions around the world will help improve auto demand, particularly in the second half of this year."
