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Thursday July 24, 10:51 PM2ND LD: Ford sinks into red in 2nd qtr after 1st-qtr rebound(Kyodo) _ (EDS: ADDING INFO AT LEAD, 7TH TO 10TH GRAFS)Ford Motor Co., pummeled by the gas price surge and a growing shift in consumer preferences for smaller cars, said Thursday its net balance in the second quarter fell into the red with an $8.7 billion loss, compared with a $100 million profit in the first quarter. Ford blamed the loss in the April-June period mainly on $8 billion in pretax special charges for assets whose values have been eroded against the backdrop of the slowing U.S. economy. The charges include $5.3 billion related to impairments of its North American operations' long-lived assets, as well as $2.1 billion for impairments of its credit arm's car lease-related assets, Ford said in a press release. The net loss in the three months to June 30 compares with a net profit of $750 million in the second quarter of 2007, according to the automaker. Ford also said it will speed up its product transformation plan by adding to its model lineup several new fuel-efficient small vehicles in North America such as the next-generation Ford Fiesta and Ford Focus cars. "We continue to take decisive action in response to the rapidly changing business environment," Ford President and Chief Executive Officer Alan Mulally said in the release. "We are uniquely positioned to leverage our global assets...to quickly bring more small, fuel-efficient vehicles to North America." Ford said it will convert three existing North American truck and sport utility vehicle plants for small car production, with the first conversion beginning this December. Specifically, an assembly plant in Cuautitlan, Mexico, will be converted to start producing the new small Fiesta car for North America in early 2010. In addition, Ford will convert its plant in Wayne, Michigan, which now makes the Ford Expedition and Lincoln Navigator full-size SUVs, to start manufacturing small cars in 2010. Conversion work will begin this December. On top of these steps, Ford will upgrade the small Fiesta and Focus cars, in both four-door and five-door versions, in 2010. During the April-June period, Ford's global sales shrank to 1,561,000 units from 1,773,000 units a year before. Pretax loss in the period came to $1.0 billion. The figure does not include the one-off charges. Overall revenue came to $38.6 billion, down from $44.2 billion a year earlier. If the revenue figure is adjusted to exclude lost sales at Jaguar Land Rover and Aston Martin operations that were sold to other automakers, the degree of revenue shrinkage would be milder, it added. Ford acknowledged it is facing serious challenges stemming from the gasoline price surge, which has induced "a significant shift away from large pickup trucks and traditional SUVs in North America." Ford noted that it had improved initial quality of Ford-brand vehicles in the United States at a faster rate than the industry average, as evidenced by good readings in a J.D. Power and Associates survey. |
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