Chicago Tribune

CHICAGO – Ford Motor Co. posted its first quarterly loss in nearly two years Thursday, as expected, but the No. 2 automaker disappointed some on Wall Street by not moving faster on a broader restructuring plan.

Ford’s third-quarter loss of $284 million, or 15 cents a share, is in contrast to a $266 million profit a year earlier.

Chairman and Chief Executive Bill Ford Jr. had raised expectations in August that news on plant closings would accompany third-quarter results. He said Thursday that will happen in January to give a new North American management team time to review the plans.

This month, Ford installed Mark Fields as president of the Americas and Anne Stevens as chief operating officer, key positions overseeing the North American automotive operations, the company’s largest unit, which lost $1.2 billion last quarter.

“I’m allowing that new team to come in and make their own assessment,” Ford said in explaining the delay. Fields and Stevens are to report back to Ford in December.

JP Morgan analyst Himanshu Patel was disappointed by Ford’s lack of speed and specifics compared to General Motors Corp., which announced accelerated cost-cutting moves Monday after posting a $1.6 billion loss.

“We continue to favor GM over Ford due to the former’s more favorable 2006 product cycle and its more aggressive restructuring approach,” Patel said in a note to investors.

Ford’s stock fell 5 cents, to $8.42, in New York Stock Exchange trading Thursday. That’s 6 cents above its 52-week low. GM was unchanged at $28.38. Profits have disappeared at both as rising gas prices have accelerated a sales decline of sport-utility vehicles, their most profitable models.

“I think it’s reasonable to give the new management time to look over the details, though I don’t know how Ford’s plans are going to change,” Burnham Securities analyst David Healy said.

In a conference call with analysts and media, Bill Ford said Fields and Stevens will simply tweak Ford’s restructuring efforts, begun in 2002. Neither was available to comment Thursday.

“We’ve done a lot this year already. What is to come in January is a further fine-tuning of the plan,” Ford said. “We are already well down the road to where we’re heading.”

Ford is trimming nearly 3,000 salaried positions this year, has announced it will close an assembly plant in Lorain, Ohio, and is selling its Hertz rental car unit for $5.6 billion. In addition, the company is forging long-term relationships with suppliers to lower costs and improve quality.

Ford also bailed out Visteon Corp., which it spun off in 2000, “without a lot of brinkmanship,” Bill Ford said in a reference to GM allowing its former parts affiliate Delphi Corp. to fall into bankruptcy. Ford prevented that by taking back 23 Visteon facilities in North America with plans to sell or close most.

Ford said more cuts in salaried positions are coming as well as union jobs though he wouldn’t discuss the number or timing of those or of plant closings.

“There will be sacrifices throughout the company, from top to bottom,” he said.

How deep Ford’s cuts will go depends in part on the outcome of negotiations with the United Auto Workers on health care costs. Ford expects to receive concessions similar to those GM negotiated with the UAW.

The union said Thursday that UAW retirees who receive annual pensions of more than $8,000 from GM will pay about $750 more per year for family coverage under the agreement. For the first time, retirees would pay monthly premiums of $10 for individuals and $21 for families, plus higher deductibles and prescription co-payments.

Active workers would have higher co-pays and defer $1 per hour in wage increases the next two years to help finance retiree health care.

“UAW-GM active workers and retirees have long enjoyed some of the best health care coverage of any individual workers in America, and they will continue to do so under the terms of the tentative agreement,” UAW President Ron Gettelfinger said at a news conference in Detroit.

GM said the concessions would cut $1 billion from its annual health care bill, currently $5.6 billion, if ratified by UAW members. Ford’s savings would be lower because it has fewer workers and retirees, but Bill Ford wouldn’t discuss an amount.

Ford said he hopes to obtain a similar agreement by January. That could hinge on whether GM’s UAW workers agree to the cuts and how long that takes.

And it’s the automaker’s first quarterly loss since the fourth quarter of 2003. Ford still expects a full-year profit of about $1 per share.

The $1.2 billion loss in North American auto operations offset a $901 million profit at Ford Motor Credit, the company’s most profitable unit. North America lost $907 million in the second quarter, mainly due to falling SUV sales.

The company lowered its fourth-quarter production schedule in North America to 810,000 vehicles, 20,000 less than its previous forecast, because of an October sales slowdown affecting foreign brands as well as domestic.