Ford Will Delay Reporting of Its 3rd-Quarter Results November 17, 2006
The Ford Motor Company said it needed several more days to finish restating previous years’ earnings.
DEARBORN, Mich., Nov. 9 – For the second time this year, a Detroit automaker will be late filing an earnings report with the Securities and Exchange Commission because of accounting errors.
The Ford Motor Company said Thursday that it needed several more days to finish restating previous years’ earnings, the first time in recent memory that the automaker has sought an extension for a quarterly filing. Ford said on Oct. 23, when it reported a preliminary third-quarter loss of $5.8 billion, that it would have to restate its earnings since 2001 because of incorrect accounting of derivatives linked to interest rates by its finance arm, Ford Motor Credit Company.
Ford also said it would eliminate one of two shifts at a factory 10 miles from its headquarters that builds sport utility vehicles, and the Dana Corporation, an auto parts supplier, announced that it planned to close eight plants in North America.
Ford said it would need a few more days before it filed its third-quarter earnings report, which it expected to file by Tuesday.
“I think it makes sense, considering what we’re looking at in terms of restating, that we might need a couple more days,” said a Ford spokeswoman, Becky Sanch.
The delay comes eight months after General Motors delayed filing its 2005 annual report, in which it revised its loss to $10.6 billion, from $8.6 billion. G.M. also restated earnings for the first and second quarters of this year, and earlier this week it filed a report showing a third-quarter loss of $24 million less than it had previously reported.
Both G.M. and Ford have been grappling with slow sales, particularly of their most profitable vehicles – trucks and sport utility vehicles – and drastically cutting jobs and expenses in attempts to regain profitability. Nearly one-third of G.M.’s 113,000 unionized workers accepted buyout offers this summer, and Ford’s 75,000 hourly employees have several more weeks to decide whether they want to take a similar offer.
Ford said it would eliminate one of two shifts at its Michigan Truck Plant, which builds two newly redesigned S.U.V.’s, the Ford Expedition and Lincoln Navigator. The move is expected to eliminate at least one-quarter of the 2,800 jobs at what was the world’s most profitable auto plant in the 1990′s, when the popularity of S.U.V.’s was at its peak.
Ford said it was cutting production by 21 percent in the fourth quarter, to its lowest level in 25 years. G.M. and the Chrysler Group, a division of the German-American automaker DaimlerChrysler, have also reduced output because of declining market share.
Those cuts have added to the misery being felt by parts suppliers like Dana, which said that it not only planned to close eight North American plants but would also try to renegotiate its labor contracts and seek to eliminate retiree health care costs. It also said it would reduce operations at three other plants.
Dana, based in Toledo, Ohio, filed for bankruptcy protection in March. The company, which makes brakes, axles and other components, said it intended to reduce annual expenses by as much as $540 million.
“We expect to continue to move manufacturing capacity from the U.S. to lower-cost countries, such as Mexico, while maintaining and improving the productivity of our final assembly operations in the U.S.,” Dana said in a regulatory filing. Dana currently has 46,000 employees at 116 factories worldwide, including 66 in North America.
Its third-quarter sales were down $110 million, or 5 percent, from a year ago, although previous cost-cutting moves helped the company shrink its net loss to $356 million, from $1.27 billion last year.
Dana did not say how many jobs would be affected or which plants would be closed, which are in addition to eight plants that have already been shut down or told they would close this year. The company’s chief executive, Michael J. Burns, told employees in a letter yesterday that he would make a detailed announcement within the next month.
Dana is one of several large suppliers operating under bankruptcy protection, which also include the Delphi Corporation and Tower Automotive. The automakers’ recent production cuts have made reorganizing and emerging from bankruptcy more difficult.
“Dana does have some new business coming on with Ford that’s going to help them stabilize the production flow through 2007,” said James Gillette, director of supplier analysis at CSM Worldwide in Northville, Mich. “The last four or five months were, and the next 12 months are going to be, very difficult.”
- Posted in : Ford,Uncategorized
- Author : arnold
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