Ford Credit a Bright Spot for Ford as Parent Company Confirms Huge $5.5 Billion Loss for 2001
Ford Credit, the captive finance arm of Ford Motor Co., was a rare bright spot for the parent company in 2001, earning $839 million in 2001 despite its fourth quarter loss of $297 million.
Normally a cash cow for the parent company, Ford Credit is now being challenged by loan delinquencies and the lease residual crisis. Not only is the captive finance arm skipping dividend payments to the parent company in 2001, Ford Credit is also getting a cash infusion of $700 million from Ford, according to company officials.
Ford Motor Co. as a whole has confirmed a $5.5 billion loss for 2001, and predicts only breakeven this year. The company has offered no timeframe for a return of profitable operation, irking some Wall Street and industry analysts.
The fourth quarter of 2001 was the worst for Ford as a whole, with its $860 million operations loss, along $4.1 billion charge for plant closings and vehicle credit reserve.
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