Ford US loses $5.5 billion in fourth quarter of 2008
January 30, 2009 by Matt Brogan
Ford, the only US car manufacturer operating without federal loans, burned through $5.5 billion in cash during the final three months of 2008.
Ford finished the year with cash reserves of $13.4 billion. The company said it is drawing down $10.1 billion in available credit lines immediately because of concerns about unstable capital markets and the uncertain economy.
The company reported a net loss of $5.9 billion for the fourth quarter, compared with a loss of $2.8 billion a year earlier, capping its third straight year without a profit.
“Ford and the entire auto industry faced an extraordinary slowdown in all major global markets in the fourth quarter that clearly had an impact on our results,” CEO Alan Mulally said in a statement.
Some analysts say Ford needs at least $10 billion on hand to continue running its operations. At the fourth-quarter cash burn rate of $1.83 billion a month and not taking other steps into account, Ford was on a pace to cross that threshold by the end of February.
CFO Lewis Booth said today that won’t be the case, because the company’s expects to deplete its cash reserves more slowly this year.
“We look at our burn rate every day,” Booth said. “We are confident that our burn rate will substantially slow in 2009, including in the first quarter.”
Ford said it has adequate liquidity and is taking steps to bolster it, including the conversion of a temporary asset account with the UAW. Discounting any cash used during January, the company’s cash reserves now stand at about $26 billion.
However Ford burned less cash in the fourth quarter than it did in the July-September period, when it went through $7.7 billion. Ford finished the third quarter with $18.9 billion in gross cash.
For all of 2008, revenue fell to $139.3 billion from $173.8 billion.
Print it: 
*****PRIMO!*****
Looks like the GovCo hand out aint going to last that long….
I think that is enough, send them into Chapter-11, why should the auto-industry get special treatment, when small mun-n-dad and other buinesses are going bust.
Said it before and say it again, they have THEMSELVES to blame 100%, building overpriced s*hit that nobody wants to buy anyway.
Ford and GM = TheEnd.
C is saved by FIAT, maybe someother company can save FORD and GM, should NOT be the GovCo.
Cheers
F-0
Hi F-0,
Ford doesn’t have any GovCo hand out.
Small to medium size cars are the future…
JOHN^^^
Its only a matter of time before FORD puts its snout in the trough.
They are doing it tough, like all the others.
Cheers
F-0
“Small to medium size cars are the future… ” – Only if people stop being obese and kids stop growing taller and bigger each generation…
Heading for extinction. All those working in Ford should start looking for another job, or risk unemployment.
Frugal one …….what Fed loan did Ford get? NONE!! They still have liquidity and will try not to access loans. Only GM and Chrysler have got loans from US Gov. Get your facts right……
I get such a laugh with these forum sometimes…
Is Ford the only auto company feeling the pinch at the moment?
ummm no.
F-O please explain Toyota’s first loss in it’s history and how they are accepting various goverment incentives in parts of the globe.
Ford US is running on it’s own cash, they planned a line of credit 2 years ago.
At this rate Ford will be hitting the soups kitchen with GM and Chrysler…..
Rack and Pinion – read Frugal Ones comment again…. he said Its only a matter of time before FORD puts its snout in the trough.
Which means that although they don’t have their snouts in the trough at the moment…. he expects them to join GM and Chrysler who have already received US Gummint support.
Heading for extinction , get your head out of it . their not the only ones having a hard time
I know send thses people who dont know what there doing to South Korea and they can get shown how to run a car company Hyundai/Kia could show not just Ford but other car companies as they all seem to be in trouble.Global sales for H/K and profits are growing.
Anyone who was shocked about this report or thinks it’s the beginning of the end, should have a wider look at the industry. Those masters of ??making money / creative accounting?? have even admitted they made a loss last year. Actually if you look at the figures, Ford’s last qaurter and YTD result for ‘08 versus ‘07, compared to Toyota and a few others, aren’t that bad. It’s just that both years were losses for Ford. As opposed to a large proffit & then a large loss.
You really think a 1.7 billion dollar loss over 1 year for a company worth 100 billion (Toyota) is comparable to a 5.5 billion dollar loss over 3 months for a company worth 4.4 billion (Ford) Frontman?
Research the issue then come back…
I have done plenty of research on GM / F / TM Adam; it seems you have not if you continue to be in denial over Fords financial position.
It’s shaky even on the best estimates. It has cash reserves of 13 billion, and that line of credit you mentioned adds a further 10 billion.
So at this rate Ford will run out of money at the end of the year, unless the global economy picks up by then. Last time I checked, economists were not predicting a ressurgency until at least the middle of 2010.
If you are so optimistic about Fords future I encourage you to put money into Ford shares which are trading at their lowest levels (when adjusted for inflation) in decades.
RoFlmaTiC,
thats if the cash burn rate remains at that level.
if you did do further reasearch or just read the article you are commenting on, you would see that the burn rate will be much lower this year.
No one has really gotten into what caused the excessive burn rate nor why the predicted burn rate will be much better.
A true balance sheet needs to be seen for the reasons as to why such predictions have been set
Well off course Ford are going to try to put on a brave face to the market to avoid its share price tumbling.
But what they say will happen and what does happen are different things. Their predicted loss per share for Q4 was a little over $1. It turned out to be $2.46!
Although Ford might seem to be financially strong to have 23 b of liquidity in hand, the truth is that this 4th quarter loss now puts Ford’s asset / liability deficit up at around 8 billion dollars. This makes every share worth about negative $3.50!
Though that’s tiny when compared to GM’s whopping $-100 dollars per share
Well may we remember the 70’s ,the UK and a car industry on its knees producing garbage cars , riddled with faults, management as corrupt as the unions .
Into your tardis and move to the USA 2009 , dejavu .
The american car industry will fall just like the UK , trouble is it will take the OZ industry with it , which is sad .
The euro and asian giants will have no interset in buying the brand names this time , no need to , there credibility is stuffed .