Ford Motor last week estimated financial outcomes for 2017 and 2018 that fell short of investor expectations, in a downbeat projection that contrasted with a more favorable outlook from competing automaker General Motors.
Ford Chief Financial Officer Bob Shanks informed experts at an investor conference in Detroit that greater expenses for steel, aluminum and other metals, in addition to currency volatility, might cost the company $1.6 billion in this year. Cost-cutting actions are under way and will have the greatest impact “in 2020 and later,” Shanks stated.
“We are not pleased by our performance,” he stated. “We are thrilled about our future.”
Ford’s president of global markets, Jim Farley, stated the company’s organisation structure was “out of sync with our income,” and pledged to cut costs by sharply lowering the variations of high-volume Ford models and cutting marketing expenses by $200 million a year.
Farley hinted at possible substantial changes in the structure of Ford’s money-losing South American business.
“We are checking out every option you can think of,” Farley told experts and investors at a conference on the sidelines of the Detroit auto show.
To improve revenue, Farley stated Ford would reduce its passenger-car models and create more trucks and sport utility vehicles targeting profitable niches such as rugged off-road models.
Ford shares dropped over 2 percent in extended trading after the release of the projection, but later on recuperated the majority of the losses. Ford said it would pay investors an additional dividend of $500 million, or 13 cents a share, for the first quarter.
Varying outlooks for 2018 from GM and Ford highlighted how the two biggest U.S. automakers have been on diverging roads for the last year.
GM CEO Mary Barra has led a significant overhaul of the automaker, selling its unprofitable European operations, leaving troubled Asian markets and giving the green light to investments in self-driving cars and an expanded portfolio of electric automobiles.