Re: Ford Posts Loss of $5.8 Billion, Worst Since '92

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<DIV><FONT face=Tahoma>New York Times</FONT></DIV></NYT_BYLINE><NYT_TEXT> <DIV id=articleBody> <P><FONT face=Tahoma>DEARBORN, Mich., Oct. 23, 2006&nbsp; The </FONT><FONT face=Tahoma>Ford Motor Company</FONT><FONT face=Tahoma> reported its worst financial results in more than 14 years Monday and warned that its business was likely to worsen further in the months ahead, as it and other Detroit auto companies struggle to reinvent themselves.</FONT></P></DIV></BLOCKQUOTE> <DIV dir=ltr><FONT face=Arial size=2>For such an interesting conversation piece, this thread sure has resulted in a lot of idiotic responses!&nbsp; Wow!&nbsp; </FONT></DIV> <DIV dir=ltr><FONT face=Arial size=2></FONT>&nbsp;</DIV> <DIV dir=ltr><FONT face=Arial size=2>I notice there's no mention of special restructuring charges in this announcement, so we need that.&nbsp; Here&nbsp;it is:&nbsp; </FONT></DIV> <DIV dir=ltr><FONT face=Arial size=2>"Excluding restructuring and other special charges, Ford said it lost $1.2 billion, or 62 cents per share, from continuing operations."&nbsp; </FONT></DIV> <DIV dir=ltr><FONT face=Arial size=2></FONT>&nbsp;</DIV> <DIV dir=ltr><FONT face=Arial size=2>That gives us an idea of the hemmoraging rate, but no the amount of money that's actually gone. Some of the restructuring charges can be real money, but a lot of it's fake. Can't tell from this.&nbsp; Check these out:</FONT></DIV> <DIV dir=ltr><FONT face=Arial size=2></FONT>&nbsp;</DIV> <DIV dir=ltr><FONT face=Arial size=2>"The charges included $2.2 billion to re-value assets in North America and $1.6 billion to decrease the value of Jaguar and Land Rover assets."&nbsp; That's not money.&nbsp; Just some numbers on a&nbsp;paper. So, of the 5.8 Billion, 3.8 is fake.</FONT></DIV> <DIV dir=ltr><FONT face=Arial size=2></FONT>&nbsp;</DIV> <DIV dir=ltr><FONT face=Arial size=2>"<!--StartFragment --><FONT face="Times New Roman" size=3> Ford also took an $861 million charge for jobs bank benefits and employee separations due to its plans to idle factories in North America, a $259 million charge for continued global personnel reduction and a $437 million charge for the cost of employee retirements that occurred earlier than planned. "&nbsp; There were also some special gains that make these numbers balance out (or at least I hope so).&nbsp; </FONT></FONT><FONT face=Arial size=2>This is real money, but it's not money they actually paid out already.&nbsp; It's money that they are going to have to pay (really!) so they are considering it like it's already gone.</FONT></DIV> <DIV dir=ltr><FONT face=Arial size=2></FONT>&nbsp;</DIV> <DIV dir=ltr><FONT face=Arial size=2>Other interesting information: Their sales revenue fell 10% year-over-year. The market share is down to 15.5%. The economy is strong, and consumers have a lot of spending money.&nbsp; If the economy worsens, they will be in an awful world of hurt.&nbsp; Just awful.</FONT></DIV> <DIV dir=ltr><FONT face=Arial size=2></FONT>&nbsp;</DIV> <DIV dir=ltr><FONT face=Arial size=2>Now- - anybody remember how many billions they have to operate on?&nbsp;&nbsp; Here it is:</FONT></DIV> <DIV dir=ltr><FONT face=Arial size=2>"<!--StartFragment --><FONT face="Times New Roman" size=3> Ford also said it had $23.6 billion in cash available at the end of the quarter, but it was exploring the possibility of using its automotive assets as collateral to borrow cash to maintain liquidity as losses and restructuring costs mount. The company expects to spend about $3.5 billion more of its cash by the end of the year. "</FONT></FONT></DIV> <DIV dir=ltr><FONT face=Arial size=2></FONT>&nbsp;</DIV> <DIV dir=ltr><FONT face=Arial size=2>I think they have about 2 years before they run out of money. This AP article from Monday mentions that they're going to have to borrow money to pay for the turnaround.&nbsp; They can't borrow money like a normal company. They'll have to offer collateral to borrow anything.&nbsp; I've never heard of that - I think this is about as far into a death spiral as you can fall.&nbsp;Wonder if they can turn it around.</FONT></DIV></BODY></HTML>
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