The ailing Ford motor company plummeted $5.8bn (£3.1bn) into the red in the third quarter, as poorly performing cars at its Jaguar and Land Rover businesses added to the US group's long list of woes.
Ford's deficit was its worst for 14 years and demonstrated the scale of the challenge faced by its new chief executive, Alan Mulally, who was recently poached from Boeing.
In its key US market, Ford's sales fell from 774,000 to 710,000 cars as high petrol prices knocked sales of sports utility vehicles. In Britain, the company announced a surprise $1.6bn write-down in the value of Jaguar and Land Rover, explaining that extended warranties were proving a liability because older vehicles were performing worse than expected. Mr Mulally described the group's losses as "clearly unacceptable".
"I think the most important thing we can do is concentrate on our plans to restructure this wonderful company to operate on lower volumes - and to do it as quickly as we can," he said.
Ford's premier automotive unit, which includes Jaguar, Land Rover and Volvo, widened its losses from $108m to $593m. Ford said all the unit's brands sold fewer cars with the exception of up-for-sale Aston Martin. Land Rover, in particular, saw its market share decline and Mr Mulally made it clear a sale of all the British brands remained under consideration.
"I really think it's going to hinge on how the businesses are doing and can we make profitable growth businesses out of them with the action we have taken and additional actions that might be required," he said in a conference call.
The latest woes prompted renewed speculation about the future of the two brands. "They bought Jaguar in 1989 and they've yet to make a dime," said David Healy, an analyst at the US firm Burnham Securities. "If push comes to shove, they'll probably try to sell it because someone in Europe will want to buy it."
Mr Healy said that Ford's overall losses were greater than expected and that the figures were likely to get worse before they show any signs of improvement. Analysts were particularly concerned by a deterioration in profits at Ford's credit and finance arm.
In common with other US carmakers, Ford has struggled to cope with a shift in tastes in its home market, where consumers are turning to smaller cars and shunning traditionally profitable lines such as pick-up trucks and sports utility vehicles.
A massive cost-cutting exercise began this year, involving 45,000 job cuts. One assembly plant in St Louis has already been mothballed and another, in Atlanta, is due to shut this week. The company intends to slash $5bn of annual expenses by 2008.
Ford is pinning hopes on a new model, the Edge, which is a crossover between a car and an SUV.
In order to shore up its financial position, Ford told analysts yesterday that it was considering borrowing more money, secured on its automotive assets in the US. Ford's shares slipped 1.5% to $7.88.
The company's performance has been so troubling that the chairman, Bill Ford, stepped back from day-to-day management last month, saying he needed to bring in Mr Mulally as a fresh pair of hands.
