The financial health of Ford is vitally important to millions of people, thousands of other companies and hundreds of communities worldwide (see Economic Impact of the Automotive Industry case study). We take our responsibility to these stakeholders very seriously. To sustain our Company, meet our responsibilities and contribute to tackling global sustainability issues, we must operate at a profit. During 2006, we reported a $12.6 billion loss, primarily due to restructuring costs, and took a series of actions to restore the Company to profitability, including closing manufacturing facilities and reducing our workforce.
The auto manufacturing business in North America has changed fundamentally. It is no longer dominated by the "big three" domestic manufacturers. Rather, dozens of brands from all over the world compete for a share of a fairly fixed volume of vehicles sales. To restore profitability, we must align our North American manufacturing capacity to overall demand and shift our product mix toward the growing segments of the markets.
Even as we become a smaller company, we will continue to be a major force in mature and developing global automotive markets. Demand for vehicles is rising rapidly in emerging markets. Our sales in Asia Pacific and Africa were up 9 percent in 2006, while sales in South America grew 14 percent. We intend to expand our presence in these and other markets in innovative ways. For more information, see Developing Sustainable Mobility Strategies for Emerging Markets.
Our plan to return to profitability is discussed in the Management section. A wide range of risks and competitive factors discussed in our Annual Report on Form 10-K may affect the implementation of this plan.
Assessing Materiality
The materiality analysis conducted for this report confirmed that the Company and stakeholders alike have a high level of concern about Ford's financial condition. The issue has in fact risen in significance since the previous analysis, conducted for the 2004/5 report.
Within this broad topic, the issue of managing downsizing is of concern to a range of stakeholders, particularly in terms of its impact on employees and communities. There is also interest in the impact of Ford's legacy costs and current health care costs on the Company's profitability, and related interest in Ford's participation in public policy concerning health care reform. These two issues are discussed in detail in this section. Vehicle quality and Ford's manufacturing, marketing and product competitiveness were also of significant concern to internal and external stakeholders.
