Ford Motor Company is one of the oldest, and historically one of the most successful American auto manufacturers. "Historically" is the key term here. Ford has been loosing money for years now, and its stock has price steadily declined. It is now near the 8$ value, a mere 1/5 of what it was just in 1998 (For Ford's stock chart see: http://mwprices.ft.com/custom/ft2-com/html-interactivecharting.asp?osymb=F&ocountrycode=&expanded=true&subtab=1&colMode=&pageNum=&company=NEW&industry=&region=&extelID=&isin=&ftep=&sedol=34537086&FTSite=FTCOM&symb=F&countrycode=&t=e&s2=&q=F&time=3yr&freq=1dy&compidx=SP500%7E3377&indName=aaaaa%7E0&sid=205397&ma=0&maval=9&uf=0&lf=1&type=8&lf2=0&lf3=0&comp1=&comp2=&comp3= )
Today Ford announced whooping 5.8$ Bln Q4 loss, totaling its 2006 loss to 12.7$ Bln, making it the biggest loss in the company's history. These figures are attributed to major decline in global auto sales, as well as high costs of a painful restructuring process that Ford is undergoing (More on that: http://biz.yahoo.com/ap/070125/earns_ford.html?.v=28 ).
Ford is not the only auto manufacturing giant in trouble, as the rest of the US "big three" GM and Chrysler (a division of DaimlerChrysler) also struggle. The Wall Street Journal reports that GM and Ford cut down more than 70,000 jobs in 2006. Their oversea Far East based competitors (like Toyota, Honda and Hyundai) are giving the American auto makers a hard time.
With such a serious situation, the domestic manufacturers are looking towards the government for help. It seems that this time, they actually might get help. In his annual "State of the Union" address the President announced a few policy elements that could be of great help for the American auto industry. The new energy policy and possible obligation to use alternative fuels such as ethanol should give the domestic auto makers some edge over the competition. On top of that, a possible reform of the health care system could lower the costs that the big three carries in employees benefits and health care plans (The whole story on that: http://online.wsj.com/article/SB116969452776887202.html?mod=home_whats_news_us ).
The question is, whether the automakers are going to be able to take advantage of this and build on it to successfully compete with oversea competition. The forecasts for the auto industry in 2007 are supposedly better than for 2006, the next months will show how Ford and GM use those opportunities.
Today Ford announced whooping 5.8$ Bln Q4 loss, totaling its 2006 loss to 12.7$ Bln, making it the biggest loss in the company's history. These figures are attributed to major decline in global auto sales, as well as high costs of a painful restructuring process that Ford is undergoing (More on that: http://biz.yahoo.com/ap/070125/earns_ford.html?.v=28 ).
Ford is not the only auto manufacturing giant in trouble, as the rest of the US "big three" GM and Chrysler (a division of DaimlerChrysler) also struggle. The Wall Street Journal reports that GM and Ford cut down more than 70,000 jobs in 2006. Their oversea Far East based competitors (like Toyota, Honda and Hyundai) are giving the American auto makers a hard time.
With such a serious situation, the domestic manufacturers are looking towards the government for help. It seems that this time, they actually might get help. In his annual "State of the Union" address the President announced a few policy elements that could be of great help for the American auto industry. The new energy policy and possible obligation to use alternative fuels such as ethanol should give the domestic auto makers some edge over the competition. On top of that, a possible reform of the health care system could lower the costs that the big three carries in employees benefits and health care plans (The whole story on that: http://online.wsj.com/article/SB116969452776887202.html?mod=home_whats_news_us ).
The question is, whether the automakers are going to be able to take advantage of this and build on it to successfully compete with oversea competition. The forecasts for the auto industry in 2007 are supposedly better than for 2006, the next months will show how Ford and GM use those opportunities.
