Ford lost $1.3 billion in 2020 and will slow production due to chip shortages.


Ford Motor lost $1.3 billion in 2020 as car sales slumped during the coronavirus pandemic and the company ran up large restructuring costs for its overseas operations.

The automaker, which was forced to stop making cars for about 60 days last spring to prevent the spread of the virus, reported $127 billion in revenue for the year, down from $156 billion in 2019, when it made a small profit.

Ford is racing to develop electric cars and trucks in the hope they will juice its sales in the next several years and said it now plans to spend $22 billion on electric vehicles over the 10-year period ending in 2025. It previously planned to spend $11.5 billion through 2022.

But Ford’s chief executive, Jim Farley, said in a conference call with analysts that he isn’t ready to commit to a phaseout of gasoline-powered models. General Motors said last week that it aims to stop making internal combustion vehicles by 2035, replacing them with electric models.

“It’s stunning how fast the industry is changing,” Mr. Farley said. “I don’t think any of us really has an answer” to when electric cars will take over completely.

Ford’s 2020 earnings were hurt by $5 billion in restructuring charges in the fourth quarter. Last month the company said it would close its plants in Brazil in a bid to halt losses in South America. It is also losing money in China and trying to improve profitability in Europe.

The automaker said it expected business to improve this year as the economy recovers and the pandemic wanes.

But its recovery faces a big challenge. Ford said that a global shortage of computer chips that has forced it and other automakers to slow production around the world could depress this year’s pretax profit by $1 billion to $2.5 billion.

“The semiconductor situation is changing constantly, so it’s premature to try to size what availability will mean for our full-year performance,” Ford’s chief financial officer, John Lawler, said in a statement. “Right now, estimates from suppliers could suggest losing 10 percent to 20 percent of our planned first-quarter production.”

Earlier on Thursday, Ford said it would slow production of its best-selling F-150 pickup truck at two plants because of the shortage of semiconductors. The company will operate just one shift at a Dearborn, Mich., plant for one week beginning Feb. 8, instead of the usual three shifts. A plant near Kansas City, Mo., will go to two shifts instead of three.

Ford relies on the F-150 for a big chunk of its profits. Its F-series trucks are the top-selling vehicle line in the United States.

On Wednesday, G.M. said that it would idle three North American plants next week because of the chip shortage.



Source link

Jonny Richards

Templateify is a site where you find unique and professional blogger templates, Improve your blog now for free.

Post a Comment (0)
Previous Post Next Post