Ford Reports Net Loss of $2.8 Billion in 4Q 2008
Ford Motor Co. struggles in the fourth quarter of 2008 without any help from the federal government. The company burned through funds amounting to $5.5 billion in the last stretch of the previous year.
The car manufacturer finished 2008 with a $13.4 billion cash reserves. Ford will be drawing down available credit lines of $10.1 billion to address concerns on the rocky global economy.
Ford files a net loss amounting to $5.9 billion for the 4th quarter of 2008 compared to a year over year $2.5 billion. The car manufacturer closes 2008 as its third year of not earning any profits. Pretax operation loss was recorded on their books at $3.7 billion compared to $620 million in 2007.
The whole of the auto industry faced an unusual major slowdown in markets all over the globe recorded during the last three months.
Economist estimates the needs of Ford to stand at $10 billion to keep its operations running. Looking at its trend of burn rate, Ford without doing anything, can only survive until the end of February. The car manufacturer is expected to deplete its funds slower this year though.
Ford explains that they have enough liquidity to keep everything on a healthy level. Without any cash expenditures this January, the company will have a reserve of $26 billion.
The revenue of Ford dropped significantly by 36%. Its total income for the 2008 4Q is $29.2 billion amid the US recession.
Ford asked for a government bail out aid of $9 billion in December but declared that it will only use the funds when the economy further drops.