Detroit After unveiling Ford Motor Co.'s record $12.7 billion loss for 2006, the company's chief executive officer offered assurance to plant workers, engineers, managers, dealers and others stunned by the news.
"We are at the bottom," Alan Mulally told the Detroit Free Press on Thursday afternoon.
He pledged that 2007 would end on a stronger note as the company progresses through a massive restructuring, though more losses are expected.
The costs of the restructuring, and a sweeping consumer shift away from Ford's most profitable pickups and sport utility vehicles, helped bring the company to this low point. The breathtaking loss reported Thursday represented a total of $1,925 for each of the 6.6 million cars and trucks Ford sold around the world last year.
The loss was the worst annual performance in the company's 103-year history. In automotive history, it is exceeded only by General Motors Corp.'s $23.5 billion loss in 1992, when retiree benefit accounting changed. The last three months of the year, in which Ford posted a $5.8 billion loss, also scored as the company's worst year-end quarter and the second-worst quarterly result in its history.
Mulally, appointed to his post in September after being credited with driving a turnaround at the Boeing Co., acknowledged that the climb out of the hole will be arduous, but he remained firm in his assessment that it could be accomplished.
"For the next few quarters, it's going to be worse year over year, but at the year end, 2007, overall it will be better," Mulally said. "And we will be back on our plan towards profitable growth in 2009."
Mulally in Lawrence
Alan Mulally - the Ford president and chief executive officer who grew up in Lawrence and graduated from Lawrence High School and Kansas University - will tour the company's Kansas City Assembly Plant this morning in Claycomo, Mo. For coverage of his visit, keep checking back here online, watch 6News at 6 p.m. on Channel 6 and see Saturday's Journal-World.
Ford shares seemed to get a little vote of confidence Thursday. The stock price shot up in the early morning after the earnings announcement, before closing at $8.22, nearly the same as the day before.
The shrinking of Ford, which will close 16 plants and eliminate 44,000 jobs, is expected to be the easy part.
The challenge comes in predicting consumer tastes, managing the long lead times to develop new cars and trucks and getting the vehicles to market as Ford burns through an estimated $17 billion in cash through 2009.
Although Wall Street generally remains skittish on Ford, some have expressed confidence that the automaker has stashed away enough cash and credit to survive until 2009.
By then, more than 70 percent of Ford's lineup for the Ford, Mercury and Lincoln brands will be new or freshened, and the company predicts that its troubled North American unit, which sells vehicles in the U.S., Canada and Mexico, will return to the black that year.