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Press Releases Wanted

22nd June 2005 - Ford Motor Company Updates Earnings Guidance For 2005

 • 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.
 • Weaker North America automotive results now anticipated due to expectations for lower vehicle sales and continued supplier-related challenges.
 • 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.
 • Additional salaried-related cost-cutting actions announced.

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:

 • 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.
 • 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:

 • 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
 • The elimination of 2005 bonuses for salaried management employees worldwide.
 • 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."

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
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
Subtotal $0.02  $(0.10)
Discontinued operations   0    0.02
TOTAL   $0.02 $(0.08)

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.

Source: Ford Motor Company Press Release