Ford Motor reported a record $14.6 billion full-year loss last night but said it would have the cash to survive the worst downturn in auto sales in decades without a US government bailout.
Ford plans to cut some 2,500 white-collar jobs and draw down its remaining credit line after burning through $5.5 billion of cash as global auto sales plunged.
The automaker posted a deeper-than-expected $5.9 billion fourth quarter net loss. Ford has reported net losses totalling nearly $30 billion over the past three years.
For the year, Ford burned through $21 billion but said it expected that it would be able to better conserve cash in 2009 if US sales stabilize in the second half as it expects.
The second largest car-marker said it would draw down $10.1 billion remaining on its credit line and defer $2 billion in payments pledged to a trust aligned with the United Auto Workers to add to its cash position in the first quarter.
"We took this action because of our growing concerns about the instability of the capital markets," Ford Chief Executive Alan Mulally told analysts in a conference call.
Analysts lauded Ford under Mr Mulally with having the foresight to borrow heavily in 2006, before credit markets shut down and auto sales plunged in 2008.
"They're doing what they can to take costs out but the other side of the equation - sales - has got to recover," said Erich Merkle, an independent auto analyst.
Ford's captive credit arm, Ford Motor Credit, said it would cut 1,200 jobs, or 20 percent of its staff. For its auto operations, Ford said it had almost completed 1,300 white-collar job cuts that it began in November.
Ford said the UAW had also agreed to suspend its jobs bank, dropping a program that had guaranteed nearly full wages and benefits for workers after their jobs were eliminated. Ford had about 1,500 UAW workers in its jobs bank at the end of 2008.
Reuters