Our manufacturing base relies on the automotive industry. Less than what it used to but still to a high degree. We already are facing the closing of one Ford Plant in Maumee, Ohio and today brings this news:
DEARBORN, Mich. (AP) — Ford Motor Co. lost a staggering $12.7 billion in 2006, an average of $1,925 for every car and truck it sold and the worst loss in the company's 103-year-history.
The company that invented the assembly line and whose name was a byword for the auto industry warned it will bleed cash for two more years before it has a shot at making money.
Ford's loss, reported Thursday, came amid slumping demand for sport utility vehicles and other gas guzzlers and huge restructuring costs tied in part to the planned closure of 16 plants.
Last year's loss surpassed Ford's old record of $7.39 billion set in 1992.
A fourth-quarter loss of $5.8 billion helped drive up the red ink, which for the year amounted to $6.79 per share versus a profit of $1.44 billion, or 77 cents a share, in 2005.
I suppose it could be worse:
Although huge, the losses were far from the largest quarterly or annual corporate deficits on record — Time Warner Inc. reported a $97.2 billion loss in 2002, largely due to new accounting rules about how to value assets. Ford could not rely on accounting rules, however, to explain its total.
Ford's loss also wasn't the worst annual total in the auto industry. General Motors Corp. lost $23.4 billion in 1992, due mainly to accounting rule changes on health care liabilities
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