Record losses for Ford

Ford has recorded losses of £6.5 billion in 2006, the largest in its 103-year history, but the troubled car manufacturer is aiming to return to profitability by 2009.

The US automobile giant lost £2.94 billion in the fourth quarter alone as the company counts the cost of ailing sales in North America and a major restructuring effort.

In a bid to return profits to its shareholders Ford plans to close 16 factories in North America by 2012 and reduce operating costs by £2.54 billion over the next two year, a move which could mean tens of thousands of job cuts.

Ford's president and chief executive officer, Alan Mulally, was defiant when the company's results were announced today.

He said: "We began aggressive actions in 2006 to restructure our automotive business so we can operate profitably at lower volumes and with a product mix that better reflects consumer demand for smaller, more fuel efficient vehicles."

"We fully recognize our business reality and are dealing with it. We have a plan and we are on track to deliver."

Market analysts believe that the canonical American brand will lose its position as the second largest carmaker in the US to Japanese giant, Toyota.