US Auto Industry in Meltdown as Ford Loses Record $8.7 BillionCompanies / US Auto's Jul 24, 2008 - 12:00 PM GMT
The Ford motor companies stock price fell sharply by more than 10% following news of a worse than expected second quarter record loss of $8.7 billion, this follows a first quarter profit of $100 million. Ford has been witnessing a near meltdown in sales from a year earlier with auto sales down 28%, and truck sales down 36%, as following the surge in gas prices the once profitable SUV's have now become a liability by clogging up dealer forecourts with unsold inventory and thus contributing to the sales meltdown.
The stock price seems destined towards a break of 23 year lows seen at the start of this month..
The company also saw revenues plummet from $44.2 billion to 38.6 billion. Ford announced a series of initiatives in an attempt at revive the auto companies fortunes including:
• Developing new fuel efficient small cars and crossovers to North American product lineup. This includes six European small vehicles that are coming to the North American market.
• Converting three large truck and SUV plants to small car factories with retooling to begin this December.
• Upgrading of the Ford, Lincoln and Mercury models by end of 2010.
• Doubling hybrid vehicle production and models during 2009.
• Doubling the capacity for North American four-cylinder engines by 2011.
• Ford also aims to improve fuel economy on every new model.
By Nadeem Walayat
Copyright © 2005-08 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.
Nadeem Walayat has over 20 years experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 150 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.
Nadeem Walayat Archive
© 2005-2013 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.