Ford's SUVs are unpopular as drivers seek fuel economy

Chairman Bill Ford Jr said Ford would announce a "dramatic" restructuring plan in January.

The loss, Ford's first since the final quarter of 2003, comes after high gasoline prices led to a slump in sales of sport utility vehicles.

In the same period last year, Ford made a profit of $266m.

Ford's results come three days after rival General Motors posted an even bigger quarterly loss of $1.6bn.

Cost-cutting

"Our industry is beginning a dramatic restructuring which is sorely needed," Mr Ford said on Thursday.

"We have some difficult days ahead of us," he added. "We need a dramatically different business structure."

US sales of Ford vehicles have declined by 1.3% so far this year, despite a big discount programme.

The company's sales drop was particularly severe last month, with total vehicle sales for September down almost 20% compared with the same month last year.

Sport utility vehicles have been Ford's strong point in recent years, but now many US consumers seem to be turning away from SUVs and trucks in favour of more efficient, less polluting vehicles.

Ford, like the other big Detroit-based US car firms, is also struggling to cut costs, including expensive healthcare obligations to employees and retired staff.