Abysmal quarter, $8.7 billion in losses.
The company did say, however, that it has "sufficient liquidity to weather the latest downturn in the U.S. auto market without additional borrowing." But say management is wrong: If Ford did have to raise money, would it have a dilutive effect?
This is an important question, since the company said it's expecting the economic downturn to be prolonged: "With oil prices remaining 'high and volatile' and no relief for the high prices for steel and other commodities," turnaround is unlikely before 2010.
Now, if I were a Ford shareholder, my first thought upon reading that would be: "Fantastic - 2010. So I just have to hang on to this stock and hope for an economic turnaround and wait for at least a year and a half before the company gets on the road to a meaningful recovery?"
Though Ford's prediction may well prove correct, this is an extremely downbeat forecast - one that could cause investors to flee and analysts to backpedal even more than they already have.
And 2010 may even be an overly optimistic estimate: Though Ford said that it plans to shift production at plants in Michigan and Kentucky from trucks to small cars, it won't be able to double its capacity to make fuel-efficient 4-cylinder engines till 2011 - and won't bring 6 European small car models to the States before the end of 2012.
It will, however, double its production of hybrids in 2009.
But still - think of the cars Ford's bringing out: Forbes points out that "The European models being brought over include the Ford Fiesta, Ford Focus, [and] Ford TransitConnect."
Note to Ford: You know why consumers buy Hondas, or Toyotas (TM)? Yes, they're fuel efficient, but they also look good. If you think people are going to be lining up to buy Fiestas - good luck with that.
Ford closed at $5.11, down 92 cents a share or 15.26%.
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