Ford has announced the biggest quarterly loss in its 105-year history only weeks after selling Jaguar Land Rover to Tata Motors of India for £1.15 billion.
The US company, which stripped JLR’s figures out of its results statement for the April-June period, said it was in the red to the tune of $8.7 billion (£4.4 billion), or $3.88 a share.
The deficit, which compared with a net profit of $750 million (£379 million) in the same period last year, was largely due to the £8 billion cost of restructuring the business and layoffs at its North American operations, although the continuing slump in sales of its erstwhile flagship SUVs and trucks also played a part.
It was the sixth loss in eight quarters since chief executive Alan Mulally joined the Blue Oval company from planemaker Boeing with a brief to put the brakes on its prolonged decline in fortunes.
Revenue for the Michigan-based car company was $38.6 billion (£19.5 billion) compared with $44.2 billion (£22.3 billion) last time.
“Adjusted to exclude Jaguar Land Rover and Aston Martin (which Ford sold last year) from 2007 results, revenue would have been down slightly, with lower volume, adverse product mix and lower net pricing, partly offset by favourable exchange,” Ford said in its results statement.
One bright spot is the performance of Ford of Europe, where pre-tax profits rose to $582 million (£294 million) from $262 million last time.
Ford is doing particularly well in Europe thanks to its better mix of models and cost reductions. Revenues from the region rose to $11.5 billion (£5.8 billion) from $9.2 billion.
At Volvo, the only survivor of Ford’s old Premier Automotive Group of European luxury brands, there was red ink on the profit and loss column for the second quarter running.
Losses at the Swedish manufacturer – which is thought to be the next candidate on the auction block – rose to $120 million (£70 million) from $91 million a year ago.
Losses from the North American automotive operations rose massively, from $270 million (£136 million) last time to $1.3 billion (£657 million).
That was blamed on “unfavourable volume and mix, especially in the full-size pick-up truck and traditional SUV segments and unfavourable net pricing,” Ford said.
Ford has been left high and dry in its home markets in North America, hit by a combination of soaring pension and healthcare costs, record fuel prices and the ability of its foreign competitors to produce the smaller, less thirsty, models that budget-conscious buyers are now demanding.
Its bigger Detroit rival, General Motors, has been similarly hit, but is much further down the road to recovery.
The cost of pulling itself out the ditch is proving to be colossal. So far Ford has shut 12 factories and axed 38 per cent of its North American workforce which amounts to some 51,000 jobs.
But ultimately, the bloodbath is expected to yield $5 billion of annual operating costs by the end of this year compared with 2005.
A further 15 per cent of jobs in the region are to go in the coming weeks.
Ford also said it would be significantly accelerating its plan to introduce new fuel-efficient vehicles in North America. Under the plan, the company said it will increase hybrid production and convert three plants used for trucks and SUVs to small car production, starting in December.