Ford has provided a bleak outlook for the first half of 2020, predicting an operating loss of more than $5 billion (around £4bn) for the second quarter as the coronavirus crisis hits home.
Speaking to investors after announcing a loss of $632 million (£500 million) before interest and taxes in the first quarter, chief financial officer Tim Stone claimed the company had been 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 have been delayed or postponed indefinitely. The Financial Times is reporting Ford boss Jim Hackett indicated that deliveries of the new Mach-E electric SUV and F150 pick-up truck, and 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.
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 plans to restart production across Europe next week.
The firm has said that 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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Coronavirus and the car world: Ford names production restart date
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The good times have long gone
The good times have long gone. Here's hoping we don't see mass job losses, but I think it's inevitable across the industry as a whole frankly.
Discounting
While discounting their stockpile of cars does seem like a good idea, the problem, ultimately, is that all the car dealers are currently shut, so nobody can buy them anyway. Even if they did, they would not be allowed to drive them anywhere, which brings us back full circle to the basic problem that all businesses have - no customers equals no sales.
FORD decline had already set in
5 years ago the share price was 15.50 dollars, before convid-19 it was 9 now it's 5. The rot had already set in. In the UK some models were just to over priced (just look what happened to the Edge), to late to the BEV market and under estimated the SUV market.
To reliant on the F150 and FORD credit in Europe (more profitable than making cars and may now well back fire)