Wall Street Awaits Ford's Retooling

Shares drifted lower Thursday amid reports that the automaker will announce huge job cuts and heavy losses

Ford Motor Co. (F) shares tumbled on Sept. 14, after a report that the struggling automaker expects to lose as much as $9 billion this year.

The Detroit News said Sept. 14 that Dearborn (Mich._-based Ford projects its worldwide automotive operations will lose nearly $6 billion this year, and the company as a whole could lose as much as $9 billion once restructuring costs are factored in, according to internal company forecasts.

Ford Chief Financial Officer Don Leclair's office prepared a Sept. 6 report projecting that Ford's global automotive operations will post a pretax loss of $5.6 billion to $5.9 billion, excluding non-recurring charges. The projected loss would be a nearly six-fold increase over Ford's $1 billion pretax global automotive loss last year, The Detroit News reported.

Ford's stock was down nearly 1% to $9.10 per share in afternoon trading on the New York Stock Exchange.

The company plans to announce details about an accelerated North American restructuring plan on Friday Sept. 15. "We think the company may announce more aggressive plant closing, employee reduction or buyout plans, and other cost saving steps, but we believe it is too early for newly hired president & CEO Alan Mulally to have his imprint on the program," Standard & Poor's Corp. analyst Efraim Levy said in a research note Thursday.

Levy said changes in the management team might be part of the discussion. "Regardless of what is announced tomorrow, we expect the rest of 2006 to be poor, and see continued losses in 2007 before special items." (S&P, like BusinessWeek.com, is owned by The McGraw-Hill Companies.)

Ford has been losing ground against its competition as it grapples with factors such as labor costs and problematic factory output.