Ford Motors hit by losses of more than €2bn

FORD Motor Co, with US sales shredded by the worst financial crisis since the Great Depression, has posted a third-quarter operating loss of $2.98 billion (€2.33bn).

The company said it used up $7.7bn (€6bn) in cash and would cut more salaried jobs.

The per-share operating loss of $1.31 (€1.02) was wider than the 93 cent (73c) average of 10 analyst estimates compiled by Bloomberg.

Those figures exclude a gain for shedding future retiree medical bills under a new union contract that enabled Ford to post a net loss of $129 million (€101m).

Sales plunged 22% to $32.1bn (€25.1bn), draining Ford’s cash as the second-largest US car maker pared production and its workforce to match dwindling demand. Automotive gross cash totalled $18.9bn (€14.8bn) on September 30, compared with $26.6bn (€20.8bn) on June 30.

“Investors are focused on cash accrual and cash burn,” Dan Poole, senior vice president of equity research at National City Bank in Cleveland, said before results were released.

National City’s $34bn (€26.6bn) in assets include Ford shares.

Ford’s operating loss may have heralded similar results for General Motors Corp, the biggest US automaker, when it reported on its third-quarter performance later last night.

Ford rose 6.1% to $2.10 (€1.64) at 7:37am before regular New York Stock Exchange composite trading. The shares tumbled 71% this year before yesterday.

Cash Plan Ford disclosed steps to improve cash by as much as $17bn (€13.3bn) through 2010.

Salaried-personnel costs will be reduced by an additional 10% by the end of January, expanding on a 15% reduction this year, Ford said.

Merit-pay increases for salaried personnel will be eliminated in 2009. The company also will suspend matching contributions for 401(k) retirement accounts for US salaried employees starting on January 1.