DETROIT (AP):
Ford Motor Co., which disappointed Wall Street with a $123 million second-quarter loss, is starting a review of poorly performing units, including Jaguar, with an eye toward possible sale of some operations, according to a published report.
Ford also is considering forming an alliance with other automakers, a move that General Motors Corp. is considering, The Wall Street Journal reported Wednesday. It based the report on unidentified people close to the situation.
"We have nothing to announce at this time," Ford spokesman Tom Hoyt told The Associated Press Wednesday morning.
Losing market share
Ford has been losing market share to Asian manufacturers for a decade and has been badly stung by high gas prices because big trucks and sport utility vehicles account for a majority of the vehicles it sells. For the first time last month, it sold fewer vehicles than Toyota Motor Corp. in the U.S.
According to the report, the Dearborn, Michigan-based auto-maker is naming former investment banker Kenneth Leet to lead the review of its ailing operations. Leet headed merger and acquisition teams for Goldman Sachs Group Inc. and Bank of America Corp.
The newspaper said the team will consider whether Ford should sell some underperforming brands or seek alliances with other automakers. It said the team also will look at what Ford should do with its financing arm, Ford Credit. The unit's borrowing costs have risen because of Ford's credit downgrades below investment grade.
Production cut
Ford acquired Jaguar in 1989. Last month, Ford lowered the financial goal for its Premier Auto Group, which includes Jaguar, Volvo, Aston Martin and Land Rover. Ford sold 224,447 vehicles in July, down 35 per cent from 346,429 in July 2005. Toyota's July sales totaled 241,826 vehicles, up 12 per cent from 216,417 a year earlier.
Ford's 'Way Forward' restructuring plan, launched six months ago, calls for shedding 25,000 to 30,000 jobs and closing 14 plants by 2012. By year's end, the company will have cut production capacity 15 per cent and will be a third of the way toward its targeted number of employee cuts, Chief Executive Bill Ford has said.
The company's loss of $123 million, or seven cents per share, for the April-June period contrasted with a profit of $946 million, or 47 cents per share, in the second quarter of last year. Revenue fell 6 per cent to $41.97 billion from $44.55 billion.
