Ford’s (F) fourth quarter report was nothing short of a disaster.
The company lost $5.8 billion. Excluding restructuring costs, the number was $2.1 billion. Worldwide automotive revenue for the quarter were $36 billion down from $40.7 billion a year ago.
Vehicles sales for the year were 6.6 million compared to 6.8 million in 2005.
Sales of large pick-ups, Ford’s bread and butter, fell 12% and sales of its Explorer SUV fell 25%.
There is a temptation to believe that the vision of the new Ford as a smaller, more profitable company will work. It won’t. Scale and multiple brands and models are the key to holding share as Toyota relentlessly attacks the US market. Simple getting smaller is simply going out of business.
Ford can cut costs all it wants. If its share of market drops to the 14% in the US that it has mentioned, the chances of ever recovering with a defeated dealer network and a product line a fraction the size of those from GM (GM) and TM (TM) is virtually zip.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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