Ford posts loss; plans cuts, possible asset sales

By David Bailey and Poornima Gupta

DETROIT (Reuters) - Ford Motor Co posted a worse-than-expected quarterly loss on Friday, burning $7.7 billion of cash in its automotive business amid slowing global demand that threatens the future of the U.S. auto industry.

Ford, whose automotive unit ended the quarter with $18.9 billion in cash including marketable securities, set new deeper salaried cost cuts and said it would explore asset sales.

The automaker said it hoped to improve automotive cash by $14 billion to $17 billion through 2010 through the various cost cuts under the expectation that the global downturn will be "deeper, broader and longer than was previously assumed."

The company's automotive cash burn in the third quarter included production cuts, operating losses and upfront payments to Ford Credit to support consumer loan incentives. Overall liquidity, including available credit, totaled $29.6 billion.

Ford Chief Financial Officer Lewis Booth said he was comfortable with the automaker's liquidity and did not expect to tap into revolving credit lines.

The automaker expects its cash burn rate to be slower in the fourth quarter than in the third quarter.

Ford Chief Executive Alan Mulally and the leaders of General Motors Corp, Chrysler and the United Auto Workers met with U.S. lawmakers on Thursday to support a federal bailout of the struggling industry.

Ford, along with other automakers in Europe, was also participating in a bid to seek 40 billion euros of loans to support the industry. The request is similar to the U.S. $25 billion loan program to support improved fuel economy.

The automaker said its third-quarter net loss narrowed to $129 million, or 6 cents per share, from $380 million, or 19 cents per share, a year earlier.

The results include a gain of more than $2 billion from the approval of the voluntary employee beneficiary association aligned with the United Auto Workers.

Excluding these and other one-time items, the loss from continuing operations was $2.98 billion, or $1.31 per share, compared with analysts' expectations for 94 cents per share, according to Reuters Estimates.

Total revenue fell to $32.1 billion in the quarter, from $41.1 billion a year earlier.

Ford Motor Credit net income fell to $95 million for the quarter, from $334 million a year earlier, and the captive finance arm did not contribute a dividend to Ford.

By sharp contrast, GMAC LLC, the finance arm for GM that is 51 percent-owned by Cerberus Capital Management, posted a $2.52 billion third-quarter loss on Wednesday.

COST-CUTTING DETAILS