US:SEC to review revised Ford earnings
SEC to review revised Ford earnings
Federal agency is launching an informal inquiry into the automaker's restated financial results.
Bryce G. Hoffman / The Detroit News
Ford Motor Co. said Friday that the U.S. Securities and Exchange Commission has requested additional information about the company's recent restatement of earnings.
The SEC request came just days after Ford revised its earnings going back to 2001.
In documents filed with the commission Tuesday, the automaker said it had made mistakes in the way in which it accounted for derivative hedges, financial instruments Ford uses to counter interest rate fluctuations.
The new calculations showed Ford made about $850 million more over the past five years than previously reported.
"We are fully cooperating with the SEC's informal inquiry," said Ford spokeswoman Becky Sanch. "I can't comment further."
Analyst Bradley Rubin of BNP Paribas said he was not concerned by the development.
"This is very complicated stuff," he said. "So many corporations have got it wrong. I'm not overly worried about it, but I don't think the market is going to like it. The market was hoping that this would be put to rest."
Also Friday, Ford amended previous financial filings for 2006, finalizing restated figures for the first and second quarters that showed wider losses. Overall, however, Ford's losses through September have narrowed to $7 billion from $7.25 billion.
Ford is just the latest auto company to come under SEC scrutiny. In recent years, the agency has intensely reviewed the accounting practices of several automakers and suppliers, including General Motors Corp. and bankrupt parts makers Delphi Corp. and Collins & Aikman.
The SEC inquiry at Ford comes as the automaker already faces major challenges.
In an e-mail to employees Friday, President and CEO Alan Mulally told workers that they have to change the company's course.
In his message, a copy of which was obtained by The Detroit News, Mulally discussed his meeting this week with President Bush, Vice President Dick Cheney and other top Bush administration officials. General Motors Corp. CEO Rick Wagoner and Tom LaSorda, president and CEO of DaimlerChrysler AG Chrysler Group, also participated in the summit at the White House.
"We look forward to working in partnership with our leaders in Washington, but we cannot lose sight of the fact that most of the work ahead is ours to do, not someone else's," Mulally wrote Friday. "That's why we have put so much emphasis on the importance of honestly facing our issues We must continue to align our production capability with a realistic assessment of current and future demand."
To help boost demand in the near term, the automaker announced new incentives Friday, offering a $1,000 bonus on the 2007 Ford Fusion, $2,000 on the Five Hundred and Freestyle and $3,000 on the Ford Escape and F-Series Super Duty pickup.
The automaker is also offering $3,000 cash on the 2006 Five Hundred and Freestyle and is extending free financing offers on some 2006 models.
Ford spokesman Oscar Suris said Mulally decided to address employees directly about the White House summit because he wanted them to clearly understand what happened -- and what did not.
In his e-mail, Mulally said that he and the other auto executives talked to the president about key industry issues, including rising health care costs, trade practices and energy.
"We did not go to Washington looking for a 'bailout,' but we did press the issue that partnership with our government is the only way to level the playing field so that we have an opportunity to compete fairly on a global basis," Mulally e-mailed. "We are committed to finding new and creative ways to accelerate development of products that respond to and anticipate customer demand."
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....