US problems fuel huge Ford loss

The results put more pressure on chief executive Bill Ford

Ford's shares have tumbled nearly 6% after it reported a $1.19bn (£629m) loss for the past three months.

The car giant, trying to stem falling sales in its home market, has incurred huge costs from its planned series of job cuts and plant closures.

Ford's North American unit made a $2.9bn loss in the first three months of 2006, leading its boss to say he was "not satisfied" with the performance.

Ford is cutting 30,000 jobs and closing 14 plants by 2012 to reduce its costs.

Falling sales

The quarterly loss was Ford's largest in four years and is in marked contrast to its performance last year, when it made a $1.2bn profit in the corresponding period.

We are not satisfied with our performance Bill Ford, Ford chief executive Check Ford shares

Ford's US car sales fell nearly 3% in the first quarter of 2006, continuing a year-long trend which has seen a decline in the popularity of its sports utility vehicles.

Overall, Ford's revenues dropped 9% to $41.1bn.

The firm's sweeping restructuring programme - designed to return its US business to profitability by 2008 - meant it has been saddled with $1.7bn in one-off financial charges.

These relate to redundancy payments and other costs incurred in reducing its manufacturing base.

Excluding these, Ford said it made a $458m profit over the period.

Sticking to promises

Ford's boss said he would not be swayed from his objective of transforming the business by the huge loss.

"We have said we intend to restore automotive profitability in North America by no later than 2008 and we remain committed to deliver on our promise," said chief executive Bill Ford.

Ford is trying to transform its US business

"While we are not satisfied with our performance, particularly a loss in North America automotive, we are encouraged by the success in our global operations," he added.

Ford and General Motors have lost US market share to more efficient Japanese competitors such as Toyota in recent times.

The company is also facing huge employee healthcare and pension liabilities.

Ford's shares were down 5.8% at $7.49 in early afternoon US trading.

Yesterday General Motors said it had narrowed its quarterly loss to $323m.