Automobiles 26 Jan 2007 08:44 am

Ford Posts Record Annual Loss

by Sean Hackbarth

Crashed Ford

Ford (F) lost money with a style never seen in the company’s history. Henry Ford must be exasperated in the afterlife. They reported losing $12.7 billion in 2006. My first question: Where did it all go? My second question: How do you lose that much money? That answer is easy. When your profits rely on gas guzzling cars and trucks when gas prices shoot up along with high labor costs and a floundering premium car brand group you too can lose that much money.

CEO Alan Mulally hopes the car company will see a profit finally by 2009. He’s closing down plants and paying off workers to cut costs. More importantly Ford needs to make cars people want to drive. The Edge is a good start, and getting a Mini Cooper-like Fiesta here would work. Now, they have to get their act together on hybrids. Oil prices may have gone down recently but India and China crave energy. That strategic economic situation means future oil increases. Don’t think Toyota and Honda aren’t planning for that.

[Crash pic via cielo on Flickr.]

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