Ford Motor revealed yesterday that it lost $15m (£8m) a day at its core north American division in its third quarter and said it would announce a new round of plant closures and cost reductions in January to try to revive its business.
America's second biggest car maker followed its larger rival, General Motors, in saying it was suffering from both slumping sales of expensive sports utility vehicles and high fixed-labour costs, making it unable to compete effectively in the global market.
Ford's overall third-quarter loss was $284m, while it notched up a $1.2bn loss in north America. In Europe, the company went further into the red due to higher steel and plastic costs, recording a $55m loss from $33m a year earlier.
Bill Ford, Ford's chairman and chief executive and the great grandson of the company's founder Henry Ford, said there would be "significant" plant closures announced next year.
"We face many challenges in this competitive and difficult environment. We will continue to take the actions necessary to return our core business to sustainable profitability," Mr Ford said.
Don Leclair, Ford's chief financial officer, added that the fourth quarter was expected to be "another extremely competitive period".
Mr Ford said he would announce a long-awaited turnaround plan for Ford in late January as the Michigan-based company struggles, along with other American car makers, with low-cost competition in Asia.
The plan will be the second restructuring effort by Mr Ford. In the past few years, he has sliced 10,000 jobs around the world and closed several plants, including the Browns Lane manufacturing centre in Coventry in the UK. The nearby Solihull factory may also be closed if the Land Rovers it makes do not improve in quality.
Last month, Ford turned its attention to its supply chain, saying it would cut its number of suppliers in half and sign long-term contracts with the rest to try to shave billions from its costs.
Analysts have been encouraged by the effect of the cost cuts, which have stemmed losses in Europe and improved the performance of its London-based Premier Automotive Group.
The luxury division, which makes Land Rovers as well as Jaguars, Aston Martins and Volvos, narrowed its loss to $108m in the third quarter from $171m. Ford ascribed the improvement to new products, especially a new Land Rover model, resulting in higher prices.
Ford is trying to complete another part of its drive to revive its competitiveness by agreeing lower wages and benefits with the United Automobile Workers union. GM announced earlier this week that it had signed a breakthrough agreement under which it will save $3bn annually.Reuse content