Ford prepares for huge losses, product rollouts delayed
Pandemic will result in operating loss of more than $5bn next quarter, CFO claims, with $632m loss in first
Ford has provided a bleak outlook for the first half of 2020, predicting an operating loss of more than $5 billion (just over £4bn) for the second quarter as the coronavirus crisis hits home.
Speaking to investors after announcing a loss of $632 million before interest and taxes in the first quarter, chief financial officer Tim Stone claimed the company was on track to post substantial earnings before the pandemic but had since lost money in every region outside of North America in the first quarter.
The predicted second-quarter loss is worse than analysts expected for the American manufacturer, which has suffered on the stock market lately, in line with most car makers. Ford shares are down around 47% this year so far.
While bosses focus on maintaining the balance sheet, a number of product launches are delayed and projects postponed indefinitely. The Financial Times is reporting CEO Jim Hackett indicated overnight that deliveries of the new Mach-E electric SUV and F150 pick-up truck, plus the unveiling of the new Bronco 4x4, are likely to be pushed back by several weeks, although such delays aren’t unexpected given the disruption to development and production lines.
Ford plans to restart production across Europe next week.
Automotive News is also reporting that the tie-up between Ford’s luxury arm, Lincoln, and EV start-up Rivian to create an electric SUV for the US has been cancelled.
Ford signals its immediate priorities are to “maximise cash and preserve financial flexibility through and beyond the pandemic”. It's doing this by deferring executive salaries, suspending quarterly dividends, lowering operating costs and reducing capital expenditures.
The firm has also borrowed more than $15bn (£12bn) from its existing lines of credit.
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