Ford (F) says it does not need any TARP money. Its fourth quarter earnings have to make Wall St. and Congress question that.

The No.2 US car company reported a fourth quarter net loss of $5.9 billion, or $2.46 per share compared with a net loss of $2.8 billion, or $1.33 per share in the period a year ago.The corporation’s revenue for the last quarter of 2008 was $29.2 billion, down from $45.5 billion a year ago. The decline was due, in part, to lower volume, the sale of Jaguar Land Rover and exchange translation.

In the press release, Ford still says it does not need a dime of outside money. Not likely

Ford cut its global auto operating costs by $1.4 billion in the fourth quarter. If sales in the US fall to ten million units this year, that may not be enough to get Ford back to break even.

Ford has another large problem which will make repairing the company difficult. It profits from outside the US are collapsing. Up until earlier in 2008, the firm was able to count on operating income in places like Latin America and Asia to carry some of its earnings load.

But, for the last quarter, Ford South America reported a pre-tax profit of $105 million, compared with $418 million a year ago. The company’s Asia Pacific and Africa’s units ran at a pre-tax loss of $208 million compared with a profit of $10 million in the quarter a year ago. And, in Europe, Ford had a pre-tax loss of $330 million, compared with a profit of $223 million a year ago.

Ford’s international operations have become as much of a boat anchor as its US business is.

Ford still has over $20 billion of cash and cash equivalents on it balance sheet. That may be enough money to get it though the recession. But, if car sales worldwide drop as much in 2009 as they did in 2008, Ford’s ability to continue without assistance goes away

Douglas A. McIntyre

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