DEARBORN, Mich. - Ford Motor Co. lost a staggering $12.7 billion in 2006 - an average of $1,925 for every car and truck it sold.
The company that invented the assembly line and whose name was a byword for the auto industry warned that it would bleed cash for two more years before it has a shot at making money.
Ford's loss, reported yesterday, was the worst in the company's 103-year history and came amid slumping demand for sport-utility vehicles and other gas-guzzlers and huge restructuring costs tied in part to the planned closure of 16 plants.
Last year's loss surpassed Ford's old record of $7.39 billion, set in 1992.
A fourth-quarter loss of $5.8 billion helped drive up the red ink, which for the year amounted to $6.79 a share vs. a profit of $1.44 billion, or 77 cents a share, in 2005.
Although huge, the losses were far from the largest quarterly or annual corporate deficits on record - Time Warner Inc. reported a $97.2 billion loss in 2002, largely due to new accounting rules about how to value assets.
Ford's annual loss also was not the worst in the auto industry. General Motors Corp. lost $23.4 billion in 1992, mainly because of accounting-rule changes on health-care liabilities.
Ford predicted more losses for this year and in 2008, but the Dearborn-based company said its restructuring plan was on track for profitability in 2009.
"We know where we are. We are dealing with it, and we're on plan," chief executive officer Alan Mulally told reporters and industry analysts in a conference call.
Several analysts said the loss was not surprising, given Ford's high costs and falling market share and sales. Ford's future is cloudy at best, given the deficit that it must overcome, analysts said.
Ford, which lost $6 billion on North American operations alone, said it expected to burn up $10 billion in cash to run its business through 2009 and to spend an additional $7 billion to invest in new products.
The fourth-quarter loss was the worst final quarter in Ford's history and its second-worst quarterly performance. Ford lost $6.7 billion in the first quarter of 1992.
Excluding special items, Ford lost $1.50 a share in all of 2006, worse than Wall Street predicted. Fourteen analysts surveyed by Thomson Financial expected a loss of $1.35 a share for the year, excluding special items.
The company's shares closed up 2 cents, or 0.24 percent, at $8.22 on the New York Stock Exchange.
Ford, faced with increasing competition from overseas rivals such as Toyota Motor Corp., is banking on the restructuring to pull it through the next two years. Mulally, hired from aerospace giant Boeing Co., is leading the drastic efforts to turn around the company.
Ford mortgaged its assets to borrow up to $23.4 billion to pay for the restructuring and to cover losses expected until 2009. About 38,000 hourly workers have signed up for buyout or early-retirement offers, and Ford plans to cut its white-collar workforce by 14,000 with buyouts and early retirements.
Chief financial officer Don Leclair said Ford expected favorable results from its automotive business in 2007.
But because of interest on its debt, he said, "total automotive results are expected to be worse in 2007 than in 2006."