Ford 2nd-quarter earnings drop 19 percent

Ford Motor Co. today reported net income of 47 cents per share, or $946 million, for the second quarter of 2005. This compares with net income of 57 cents per share, or $1.2 billion, in the second quarter of 2004 and represents a 19 percent drop. Lower production and intense North American competition were cited as the primary reasons for the drop.

For the first half of 2005, the company earned $2.16 billion, down from $3.12 billion a year ago. Automotive revenue for the first half rose to $78 billion from $75.5 billion a year ago.

"Despite profitability in most regions, our global automotive results were disappointing, reflecting the fiercely competitive environment in which we continue to operate, particularly in North America," said Chairman and Chief Executive Officer Bill Ford. "We are responding to this tougher operating environment through actions aimed at improving our cost structure, optimizing our global footprint, strengthening our balance sheet and making essential investments for the future. We'll continue to share our plans as the year progresses."

Actions in the second quarter included:

• Announced plans to further reduce salaried personnel and related costs in North America.
• Consolidation of U.K. manufacturing at Jaguar, including personnel separations. Final assembly operations at the Browns Lane plant have ceased and are transitioning to Castle Bromwich.
• A Memorandum of Understanding with Visteon Corp., Ford's largest supplier. Over time, the agreement will allow the Company to diversify its supply base and enhance its access to parts, systems and technologies that are more competitive.
• Announced evaluation of strategic options for Hertz Corp., its rental car and equipment unit, including a potential partial initial public offering or a sale to a third party.