Perhaps Ford Motor Co. can be forgiven for not reacting quickly enough to what it saw in its rearview mirror. After all, when prices at the pump broke records a year ago, that didn’t stop people from buying gas-guzzling SUVs and pickups — the kinds of vehicles that long sustained Ford’s bottom line.
But things have changed.
As they reported a $123 million quarterly loss Thursday — disappointing Wall Street analysts who had forecast a profit — executives at the nation’s second-largest automaker said they knew months ago that high gas prices would eventually force consumers to migrate toward more fuel-efficient cars and crossovers. They just didn’t think it would happen so soon.
“We did anticipate that the world would not remain static and that things like crossovers and cars would actually play a bigger role in the industry’s future, and, therefore, we planned them to play a bigger role in our future,” Chairman and Chief Executive Bill Ford told The Associated Press in a telephone interview.
“It’s just that the speed at which this happened — over one quarter — we didn’t foresee that.”
Ford’s president of the Americas, Mark Fields, didn’t hide his frustration, saying he wished he could buy “a better crystal ball.”
The company said it would accelerate the restructuring efforts it began in January and would announce new measures within two months.
Ford’s loss of 7 cents per share for the April-June period contrasted with a profit of $946 million, or 47 cents per share, in the second quarter of last year. Revenue fell 6 percent to $41.97 billion from $44.55 billion.
Excluding special items, Ford’s second-quarter loss from continuing operations was 3 cents a share. Wall Street had been expecting a profit of 12 cents per share, according to a survey of analysts by Thomson Financial.
In North America, Ford had a pretax loss of $797 million, compared with last year’s $907 million loss in the second quarter.
Climbing gas prices have been felt across the industry, but have been particularly painful to Ford because big trucks and sport utility vehicles account for nearly 70 percent of the vehicles it sells.
Industrywide, trucks made up just 52 percent of vehicles sold in the month of June, compared with 58 percent in June 2005.
Ford has had some recent success with new car models such as the Ford Fusion and Mercury Milan, but critics say it has been too slow in rolling out new products.
Fields sought to counter that Thursday, touting the Ford Edge and Lincoln MKX coming out later this year in the important crossover segment. Crossovers have many of the attributes of SUVs but are built on a car platform.
Even if the company had realized in January the scope and speed of the change in consumer tastes, it could not have moved any faster to introduce more fuel efficient models, Bill Ford said. However, it would have acted more swiftly on its restructuring plan, immediately implementing the measures that it plans to announce in the coming weeks, Bill Ford said.
“The key question is how Ford’s solution has changed in response to a more difficult environment,” Morgan Stanley analyst Jonathan Steinmetz said in a research note Thursday. “This is not yet clear.”
The plan announced in January called for shedding 25,000 to 30,000 jobs and closing 14 plants by 2012. On Thursday, Bill Ford said the company will be a third of the way toward that goal and will have cut production capacity 15 percent.
Bank of America analyst Ron Tadross said he expected both Ford and General Motors Corp., which is in the midst of its own restructuring, to continue to lose market share.
“Throwing cash at cost reductions ... does not produce sustainable improvements unless the share loss stops,” he said in a note to investors.
Tadross said both companies are “ripe for a management change.”
Ford stopped providing earnings guidance earlier this year, but its production forecast appeared to reflect scaled-back expectations for the third quarter. The company said it expected production to drop 8 percent from the third quarter of 2005 to 670,000 — 40,000 fewer vehicles than previously announced.
One-time items amounted to a net reduction in second-quarter earnings of 4 cents per share. That included charges relating to plant closures and job cuts; a gain on the transfer of pension liabilities by Mazda Motor Corp., of which Ford owns about a third, to the Japanese government; and a favorable adjustment to a first-quarter charge for layoffs and termination packages.
For the first half of the year, Ford lost $1.3 billion, or 70 cents a share, in contrast to a profit of $2.16 billion, or $1.05 a share, a year ago. Six-month revenue fell to $83 billion from $89.7 billion a year ago.
Asked about a proposal for GM to join the alliance of Nissan Motor Co. and Renault SA, Bill Ford said the company was following developments and “game-planning,” but that he couldn’t offer any analysis. As to whether Ford could benefit from such a partnership, Bill Ford said the company was keeping its focus on turning around its business.