Eddy Elfenbein submits: The official announcement came. Ford said that by 2012, it will cut as many as 30,000 jobs and shut down 14 plants. The plan is expected to save $6 billion a year by 2010.
The company reported earnings of eight cents a share, two cents more than last year. For the year, Ford made $1.04 a share, down from $1.73 a share in 2004. The stock is currently trading about 8% higher. The real number to watch at Ford is the pre-tax loss for North American operations. For the second quarter, Ford lost $907 million, and then another $1.2 billion in the third quarter. Today, Ford said that it only lost $143 million in the fourth quarter.
Excluding all the one-time charges, Ford made 26 cents a share for the quarter while Wall Street was expecting just a penny a share. The stock is currently trading about 8% higher. Bloomberg lays out some of the details Ford faces:
Ford had 122,877 employees in its North American auto operations at the end of 2004, including 35,000 salaried employees. Detroit-based GM, Ford's bigger U.S. rival, had 173,000 U.S. employees in North America at the end of September 2005, down from 181,000 at the end of 2004. GM had 106,000 hourly and 36,000 salaried U.S. employees at the end of September.
"If Toyota and Honda weren't in the market, Ford and GM would be in fine shape," said Sean Egan, managing director of Egan-Jones Ratings Co. in Haverford, Pennsylvania, said today before the restructuring announcement. "We don't see anything on the horizon that is going to substantially change the slide."
The plan is Bill Ford's second restructuring since becoming CEO in 2001. Toyota passed Ford, which sold 6.8 million cars and trucks worldwide last year, as the world's No. 2 automaker in 2003. Toyota has said it expects to report 2005 sales of 8.09 million cars and trucks. Wagoner said earlier this month GM sold 9.17 million cars and trucks worldwide last year.
Ford in 2005 had the capacity to build 4 million vehicles annually in North America at 16 assembly plants. Last year, the company sold 2.95 million of its North American-built Ford, Lincoln and Mercury models in the U.S.
Ford's U.S. sales overall fell 5 percent in 2005 compared with an industrywide gain of 0.5 percent. The company was hurt by a decline in sales of profitable sport-utility vehicles. The Explorer mid-size SUV hit a 15-year sales low in November and fell 29 percent for 2005.
The company's North American car and truck plants operated at 79 percent of capacity in 2005, according to Harbour Consulting of Troy, Michigan. That was the lowest of six automakers surveyed by the consulting company. Toyota was No. 1, with its North American plants operating at 111 percent of capacity.