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Ford made a net loss of $2.7 billion in the full 2007 financial year, compared with a full-year loss of $12.6 billion in 2006. But the preliminary results from the US-owned automotive giant also revealed unexpected operational problems at its Volvo subsidiary in Sweden.

Excluding special provisions, Ford made a small pretax profit of $126 million on continuing operations for the full-year, and the group's revenues rose from $160.1 billion to $173.9 billion.

All of its automotive operations were profitable for the full year with the exception of the North American group, but the losses in North America were enough to drag the automotive operations as a whole into loss, with a pretax figure of $1.1 billion against a pretax $5.1 billion a year ago.

President and CEO Alan Mulally said: "We are encouraged by the progress, which validates our strategy and plan."

The Premier Automotive Group made a pretax profit of $504 million, which compares with a loss of $344 million in 2006. Ford said that Volvo incurred a loss for the full year, and the PAG profits were all down to Jaguar and Land Rover, which the group is intending to sell.

Volvo was specifically cited in notes to the preliminary accounts that refer to "special items" that reduced the full-year pretax results by $3.9 billion.

Ford reduced its global workforce by 32,800 people in 2007, most of them in North America. It also concluded a four-year agreement with the main North American unions over pay and conditions.