Ford Motors expecting massive operating losses due to restructuring charges

Ford Motors expecting massive operating losses due to restructuring charges

Ford is one of the top three automobile manufacturers in the North American market. The competition from Japanese automakers like Toyota and Honda has resulted in company making big losses in their domestic market.

As a result, the company had to announce massive job cuts and is also closing down several of their loss making plants. Ford has now stated that they are expecting their North America car-making operations to post a pretax loss this year.

This would result in Ford dragging their worldwide automotive operations into the red for the second consecutive year. Ford is expecting to take a pretax $1 billion restructuring charge on the money-losing operation in 2006. However, they are also determined to return to profitability in the coming two years.

Ford’s market share in the US market has shrunk considerably in the last couple of years. It is now closer to a disappointing 17% with their three main brands. Rising fuel costs and dropping preference for SUVs in the US market has resulted in Ford taking a beating with companies like Honda, Toyota, Nissan, and Hyundai managing to do good business.