Altruistica

"Altruistica": Seeking a return to full financial disclosure and regulatory oversight. A financial market analysis blog for "entertainment purposes" only by an experienced CFA seeking new hedge fund engagements for investment writing and analysis. The author has experience investing internationally, running a hedge fund, making angel investments, and helping launch five startup companies. Investors should do their own due diligence.

29 November 2006

Ford is Imploding -Faster than Even GM

Ford- $11B in 2007 losses, div eliminated-SOOO MUCH GOOD NEWS

Ford-F sees deterioration in overall earnings in 2007-Bloomberg

Sees 2006 pre-tax special items cash costs of $10B-$11B.

Ford-F suspending dividend in 2007-Dow Jones
Cash Drain: Ford said last month it expects a cash drain ``for the near to medium term'' on automotive losses and job-cutting costs. The company said it's ``exploring various financing strategies, including secured financing involving a substantial portion'' of its automotive operations. Competition from Japanese carmakers including Toyota Motor Corp. is also causing Ford to lose market share in the U.S. Toyota sold more cars and light trucks in the country than Ford in July, a first for any month. Ford's U.S. sales have fallen 7.4 percent this year through October, while Toyota's have risen 12.2 percent.

Ford-F's hourly buyout acceptances reach 38,000 this year
As part of a key objective of its North American turnaround plan, Ford Motor Company confirmed that so far this year about 38,000 of its UAW-represented hourly workers have accepted package offerings for voluntary separations from the company.

F Over 35,000 workers accept Ford buyout-Detroit News
More than 35,000 of Ford's (F) blue-collar workers, about half of its U.S. factory work force, have accepted buyouts and will leave the company by next September. Ford's goal had been to cut 30,000 hourly jobs by 2008, and this news is expected to provide a major boost to the company's effort to cut costs and return to profitability in 2009.

Ford-F announces plans for debt financing
Ford Motor Company announced that it plans to obtain financing totaling approximately $18 billion in order to address near- and medium-term negative operating-related cash flow, to fund its restructuring, and to provide added liquidity to protect against a recession or other unanticipated events.The financing transactions consist of: New five-year senior secured revolving credit facility of approximately $8 billion that is intended to replace Ford's existing unsecured credit facilities of $6.3 billion; senior secured term loan of approximately $7 billion; and nsecured capital market transactions of approximately $3 billion, which may include unsecured notes convertible into Ford common stock. The size of the individual components of the financing may vary depending on market conditions.

Ford cuts jobs, output at Kentucky SUV plant-Bloomberg
Ford (F) plans to cut jobs and production capacity at a Kentucky plant that makes the Explorer SUV. The plant in Louisville employs 3,800 and is the only factory that manufactures the Explorer. Sales of mid-size Suvs have fallen 26% this year through October.

AND THEN, OF COURSE, THERE's A DERIVATIVE PROBLEM
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=adgNu3WS1ZYg

The accounting changes involve the use of derivatives by Ford Motor Credit, the finance arm of the Dearborn, Michigan- based automaker. Ford Credit didn't follow accounting standards when using derivatives to hedge the interest-rate risk from longer-term debt, Ford said last month. The company, in slides prepared for a conference call, said it has ``fully remediated'' its financial controls for derivatives.

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