Downturn in Europe contributes to record dollars 7.4bn Ford loss

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The Independent Online
FORD yesterday reported a record loss of dollars 7.4bn ( pounds 5.2bn) for 1992, much of it due to an accounting change in the US but also because of deepening losses in Europe.

While Ford's North American car making operations would have broken even without a one-off dollars 6.9bn charge for future healthcare expenses, the company lost dollars 1.3bn in Europe. Jaguar, the luxury car maker, accounted for dollars 400m of Ford's losses in Europe.

No breakdown was given for Ford's losses in Britain, although they are understood to have been significantly lower than the record pounds 487m loss recorded in 1991.

Ford's dollars 7.4bn loss overtakes IBM's dollars 5bn loss for 1992 as the largest in corporate history. But it is likely to be eclipsed today by General Motors, which is expected to announce a loss last year at least three times that of Ford because of huge retirement liabilities.

Outside the US, Ford reported operating losses of dollars 1.1bn for 1992 compared with dollars 970m in 1991 and took an additional dollars 419m charge to cover the cost of making 10,000 of its 95,000 European workers redundant.

In an otherwise optimistic assessment of 1993's prospects Ford's chief executive, Harold Poling, suggested the company might for the first time in years sell fewer cars in Europe, about 13.6 million, than in North America.

This is in stark contrast to comments last month by Ford's president, Alexander Trotman, who predicted that Britain would lead the company's turnaround.

Ford's European market share slipped from 12 to 11.4 per cent last year as it sold nearly 100,000 fewer cars - mainly due to the phasing out the best- selling Sierra.

Its performance was worse in the UK. Ford's market share slumped by more than two points to just over 22 per cent as the market remained in deep recession.

'In Europe we are responding to economic and competitive challenges, as evidenced by our recent restructuring of operations,' Mr Poling said.

Despite the losses, however, he said that its European product plans remained intact with the launch of Ford's new mid-size Mondeo on schedule for next month.

Ford's dollars 1.5bn worldwide operating loss compares with a dollars 3.2bn loss for 1991, largely due to improved sales in the US, where it gained market share. The Ford Taurus surpassed Honda's Accord in total sales, thanks to a year-end flurry of sale incentives.