Ford Sees Losses, Charges

Ford Motor Co. said Wednesday that it expected to continue losing money this year on its crucial North American auto operations and could take $1 billion in pretax charges to cover costs including its recently announced restructuring plan.

The comments, contained in the company’s annual report filed with the Securities and Exchange Commission, are Ford’s first detailed guidance on its 2006 performance.

The company, which lost almost $4 billion on automotive operations in 2005, told analysts last year that it would no longer provide regular financial estimates because it wanted investors to focus on its plan to stabilize its market share and to make its auto operations profitable.

Ford has said that it expects its North American automotive unit to be profitable again no later than 2008, and repeated that assertion in its filing.

In the report, Ford said it expected to take $250 million in charges this year to cover costs of reducing its hourly payroll and another $250 million against the value of plants and equipment.

Some of those charges could be taken this quarter, the company said.

Ford said it expected the number of union employees who are guaranteed wages and benefits if they are laid off because of a plant closure “to grow in the near term.” The company is assessing if these costs “should be accrued in the first quarter of 2006.”

Ford said last month that as part of its “Way Forward” restructuring plan it would close 14 North American facilities, including seven assembly plants, and reduce its North American hourly payroll by as many as 30,000 jobs by 2008.

Ford and General Motors Corp. are trying to reduce their North American staffing and production capacity as a result of their shrinking market share.

Ford also said it would budget about $7 billion this year on capital spending, which includes equipment purchases and research and development.

Ford shares fell 2 cents to $7.95.