2005 Earnings Guidance Update

Ford Motor Co
21 June 2005

 

 
Contact: 

News Media:
Oscar Suris
313-322-1524
[e-mail]

Investment Community:
Equity: Raj Modi
313-323-8221
[e-mail]

Fixed Income:
Rob Moeller
313-621-0881
[e-mail]

Shareholder Inquiries:
800-555-5259 or
313-845-8540
[e-mail]

Media Information Center:
1-800-665-1515 
[e-mail]

FORD 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.

DEARBORN, Mich., June 21 -- 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.

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:

*  greater price competition resulting from currency fluctuations,
   industry overcapacity or other factors;

*  a significant decline in industry sales, particularly in the U.S. or
   Europe, resulting from slowing economic growth, geo-political events or other
   factors;

*  lower-than-anticipated market acceptance of new or existing products;

*  economic distress of suppliers that may require us to provide financial
   support or take other measures to ensure supplies of materials;

*  work stoppages at Ford or supplier facilities or other interruptions of
   supplies;

*  the discovery of defects in vehicles resulting in delays in new model
   launches, recall campaigns or increased warranty costs;

*  increased safety, emissions, fuel economy or other regulation resulting
   in higher costs and/or sales restrictions;

*  unusual or significant litigation or governmental investigations
   arising out of alleged defects in our products or otherwise;

*  worse-than-assumed economic and demographic experience for our
   postretirement benefit plans (e.g., investment returns, interest rates, 
   health care cost trends, benefit improvements);

*  currency or commodity price fluctuations, including rising steel
   prices;

*  changes in interest rates;

*  a market shift from truck sales or from sales of other more profitable
   vehicles in the U.S.;

*  economic difficulties in any significant market;

*  higher prices for or reduced availability of fuel;

*  labor or other constraints on our ability to restructure our business;

*  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;

*  additional credit rating downgrades;

*  inability to access debt or securitization markets around the world at
   competitive rates or in sufficient amounts;

*  higher-than-expected credit losses;

*  lower-than-anticipated residual values for leased vehicles and higher-
   than-expected lease return rates; and

*  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.


                      This information is provided by RNS
            The company news service from the London Stock Exchange