Ford Motor Co. yesterday reported that it lost $595 million during the third quarter of 1980, breaking a record for the hard-hit American auto industry set Monday when General Motors Corp. reported a $567 million loss for the same period.
Ford's report is the second-highest quarterly loss by an American corporation, exceeded only by the $668.9 million net loss reported by U.S. Steel Corp. for the fourth quarter of 1979.
Chrysler Corp., the last of the Big 3 domestic automakers, today is expected to report losses of $400 million to $500 million for the three months that ended Sept. 30, according to industry analysts.
Although the prospects for all three companies began to improve with the introduction of the 1981 models this month, the third-quarter loss reports mark the depths from which they must recover.
Ford's losses this year total $1.2 billion, and it lost an additional $41 million in the fourth quarter of 1979. GM's net losses so far this year stand at $824 million, while Chrysler's losses are expected to reach nearly $1.5 billion for the first nine months.
As Ford was reporting the new loss figures, Standard & Poor Corp., a leading bond rating service, announced it had downgraded its ratings on some $5.5 billion of Ford's long-term debt after concluding that Ford's recovery is chancy. "It is increasingly uncertain that Ford will return to strong levels of profitability in the near term," Standard & Poor said.
The low ratings on long-term revenue bonds issued by Ford and its subsidiary, Ford Motor Credit Co., reflect Standard & Poor's belief that the number two automaker, while still able to repay debts, has become significantly more vulnerable financially.
Ford's domestic sales were battered by this year's recession and the consumer's rejection of larger cars. Domestic sales of Ford cars, trucks and tractors in the third quarter were down 32 percent from the same period a year ago.
Ford sold 265,180 cars in the United States in the third quarter, compared with sales of 414,789 in the third quarter a year ago.
Even Ford's foreign sales, which had provided a buffer against declining U.S. sales, were in the red in the third quarter. Outside the United States, Ford suffered an after-tax loss of $26 million, due in part to a shift toward smaller cars in Europe, which hurt sales of Ford's European Granada. Sales of cars and trucks outside the United States totaled 396,089 in the third quarter compared with 443,447 in the third quarter of 1979.
Worldwide sales the first nine months totaled $26.9 billion, compared with $33.5 billion in the first three quarters of 1979. The after-tax loss for the first nine months of 1980, $1.2 billion, is equal to $10.20 a share.
Ford chairman Philip Caldwell said the company's recovery has begun with the introduction of its subcompact Ford Escort and Mercury Lynx models, new front-wheel drive cars that are Ford's response to import competition, particularly from Japan.
How far and how fast that recovery proceeds depends to a great extent on how fast the economy recovers from the 1980 recession, Caldwell said, adding an appeal to the Federal Reserve Board to keep interest rates from soaring again.
Ford said it is continuing its plan to reduce the size of its car and truck models to increase fuel efficiency. About $1 billion in new spending has been added to Ford's investment program for the 1981-84 period, when the company expected to spend an average of more than $4 billion a year worldwide. Standard & Poor, however, said it is concerned about Ford's ability to meet that goal.