Ford
NEWS
Contact: News Media: Investment Community: Shareholder Inquiries: Media Information Center:
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Oscar Suris Equity: Raj Modi 800-555-5259 or 1-800-665-1515
313-322-1524 313-323-8221 313-845-8540 media@ford.com
osuris@ford.com fordir@ford.com stockinf@ford.com
Fixed Income:
Rob Moeller
313-621-0881
fixedinc@ford.com
FOR IMMEDIATE RELEASE
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FORD UPDATES EARNINGS GUIDANCE FOR 2005
o Full-year earnings guidance now $1.00 to $1.25 per share vs. earlier
guidance of $1.25 to $1.50 per share, excluding special items and
discontinued operations.
o Weaker North America automotive results now anticipated due to expectations
for lower vehicle sales and continued supplier-related challenges.
o Lower tax rate assumption and stronger results from Ford Motor Credit
contributing to increased second-quarter earnings guidance of $0.30 to
$0.35 per share, excluding special items.
o Additional salaried-related cost-cutting actions announced.
DEARBORN, Mich., June 21, 2005 - Ford Motor Company today reduced its full-year
earnings per share guidance for 2005, as the profit outlook for the Company's
North America automotive operations worsened due to a weaker outlook for vehicle
sales and continued supplier-related challenges.
The Company said its 2005 full-year earnings guidance was being reduced to a
range of $1.00 to $1.25 per share, down from previous guidance of $1.25 to $1.50
per share, each excluding special items and discontinued operations.
In addition, the Company raised its second-quarter earnings guidance to a range
of $0.30 to $0.35 per share, excluding special items, primarily because of a
reduced tax-rate assumption (full-year rate of 15%) and
stronger-than-anticipated results from Ford Motor Credit. Previously,
second-quarter earnings guidance had been in the range of breakeven to $0.15 per
share, excluding special items. (Anticipated special items and charges related
to discontinued operations for 2005 are detailed at the end of this release.)
During the Company's first-quarter conference call in April, Chairman and Chief
Executive Officer Bill Ford said the Company would respond to its significant
operating challenges through an acceleration of its business plan. Since then
the Company has:
o Signed a Memorandum of Understanding with Visteon Corp., its largest
supplier. The transaction is expected to close by September 30, 2005,
and over time will lead to a steady flow of more competitively priced,
high-quality parts, systems and components.
o Announced an S-1 filing for its wholly-owned Hertz Corp. - a first
step toward a possible initial public offering of a portion of the
rental car company. The filing indicated that, following any initial
public offering, Ford would expect to completely divest its stake in
Hertz.
In addition, the Company announced today several actions aimed at further
reducing the Company's salaried-related costs this year. They include:
o A 5% reduction in salaried positions in Ford's North America
operations by October 1, 2005 and a 10% reduction in the operation's
use of agency and purchased services by July 1, 2005. This is in
addition to actions announced in April which reduced about 1,000
salaried positions.
o The elimination of 2005 bonuses for salaried management employees
worldwide.
o The suspension of the Company's 401(k) matching grant for salaried
employees, effective July 1, 2005.
The Company also said it is evaluating options for reducing personnel-related
costs outside of North America.
"Although we have increased our earnings guidance for the second quarter,
challenges continue to mount, especially in our North America automotive
operations," said Don Leclair, executive vice president and chief financial
officer. "We're taking steps immediately to reduce further our salaried-related
costs this year; these are a continuation of a series of actions we plan to take
to address our operating challenges. We remain committed to improving our cost
structure, optimizing our global footprint, and making essential investments for
the future."
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Full year and second quarter 2005 earnings-per-share guidance excludes the
effect of special items and discontinued operations, which are presently
estimated to include charges or effects related to the following items:
2nd Quarter Full Year
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Premier Automotive Group Improvement Plan $(0.01) $(0.03)
Investments in Fuel Cell Technologies 0 (0.05)
Sale of Non-Core Business 0 (0.02)
Visteon (0.10) (0.16)
Personnel Reductions (0.03) (TBD)
Tax Rate Normalization 0.16 0.16
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Subtotal $ 0.02 $(0.10)
Discontinued operations 0 0.02
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TOTAL $ 0.02 $(0.08)
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Ford Motor Company, a global automotive industry leader based in Dearborn,
Michigan, manufactures and distributes automobiles in 200 markets across six
continents. With more than 324,000 employees worldwide, the company's core and
affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover,
Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford
Motor Credit Company and The Hertz Corporation.
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SAFE HARBOR
Statements included or incorporated by reference herein may constitute "forward
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements involve a number of risks, uncertainties,
and other factors that could cause actual results to differ materially from
those stated, including, without limitation:
o greater price competition resulting from currency fluctuations,
industry overcapacity or other factors;
o a significant decline in industry sales, particularly in the U.S. or
Europe, resulting from slowing economic growth, geo-political events
or other factors;
o lower-than-anticipated market acceptance of new or existing products;
o economic distress of suppliers that may require us to provide
financial support or take other measures to ensure supplies of
materials;
o work stoppages at Ford or supplier facilities or other interruptions
of supplies;
o the discovery of defects in vehicles resulting in delays in new model
launches, recall campaigns or increased warranty costs;
o increased safety, emissions, fuel economy or other regulation
resulting in higher costs and/or sales restrictions;
o unusual or significant litigation or governmental investigations
arising out of alleged defects in our products or otherwise;
o worse-than-assumed economic and demographic experience for our
postretirement benefit plans (e.g., investment returns, interest
rates, health care cost trends, benefit improvements);
o currency or commodity price fluctuations, including rising steel
prices;
o changes in interest rates;
o a market shift from truck sales or from sales of other more profitable
vehicles in the U.S.;
o economic difficulties in any significant market;
o higher prices for or reduced availability of fuel;
o labor or other constraints on our ability to restructure our business;
o a change in our requirements or obligations under long-term supply
arrangements pursuant to which we are obligated to purchase minimum
quantities or a fixed percentage of output or pay minimum amounts;
o additional credit rating downgrades;
o inability to access debt or securitization markets around the world at
competitive rates or in sufficient amounts;
o higher-than-expected credit losses;
o lower-than-anticipated residual values for leased vehicles and
higher-than-expected lease return rates; and
o increased price competition in the rental car industry and/or a
general decline in business or leisure travel due to terrorist
attacks, acts of war, epidemic disease or measures taken by
governments in response thereto that negatively affect the travel
industry.