Ford goes into a bigger spin

Ford has posted a $14.6bn record loss, but says it doesn't need government aid. Refreshingly bullish...

Last Updated: 06 Nov 2012

The car giant's annual loss for 2008, equivalent to £10.2bn, was the biggest in its 105-year history - surpassing its previous record in 2006, when it shed $12.6bn. Industry forecasters predict American car sales in 2009 to hit their lowest level since 1982; that's after an 18% fall last year. So it's hardly surprising that Ford's finances have gone into a spin.  

Still, despite a crash that would have sent most companies careening off the corporate freeway and putting in frantic calls for a recovery vehicle, Ford has said that it doesn't need help from a government bail-out. Unlike rivals GM and Chrysler, the group is suggesting it's in a strong enough position to apply the jump-leads itself.

Having burned through $5bn in the last quarter, Ford's cash reserves currently stand at $13bn. But it says it has sufficient liquidity to go it alone, with $10.1bn in cash it can draw on this quarter through existing credit lines.

It's just a shame it can't spare a bit of that cash for its own subsidiaries. Just today the Swedish government revealed that Volvo, the Swedish carmaker owned by Ford, has requested a €475m loan from the European Investment Bank. Ford said today that Volvo made a loss of $736m in the fourth quarter. Still, at a time when the taxpayer's money is being used to prop up everything from cars to banks, it's reassuring to hear a company like Ford with the confidence to go it alone. Let's hope it really is confidence and not hubris.

Earlier this month, chairman William Clay Ford Jr said Ford wouldn't take taxpayers' cash ‘unless the world implodes'. Of course, given the IMF's cataclysmic economic predictions yesterday, those taxpayers may be digging in their pockets sooner than his comment implied.  

In today's bulletin:
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Honda shuts Swindon as Japan's woes get scary for UK
Davos Day Two: More talk, more action
Ford goes into a bigger spin
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