Mexican Media Brands
Ford Says It Can Still Post Profit if U.S. Market Shrinks 30%
Ford Motor Co. tells analysts it would still break even if U.S. car sales plunged 37% to 11 million units from last year’s record 17.5 million-unit record.
#economics
Share
Ford Motor Co. tells analysts it would still break even if U.S. car sales plunged 37% to 11 million units from last year’s record 17.5 million-unit record.
Compared to 2008, boasts Chief Financial Offices Bob Shanks, “We are a much different company now,” Bloomberg News reports.
Shanks says Ford’s stronger balance sheet means it can remain profitable for a year if the U.S. market drops 30%, Ford dealer inventories fall 37% and net revenue shrinks 2%. Faced with such a sales collapse, the company would cut annual costs by $3 billion—one-third of it coming from manufacturing operations, he adds.
Shanks delivered the good news in an effort to persuade Wall Street that the expected mild downturn in the U.S. market in 2017 won’t put pressure on Ford’s earnings.
RELATED CONTENT
-
China and U.S. OEMs
When Ford announced its 3rd quarter earning on October 24, the official announcement said, in part, “Company revenue was up 3 percent year over year, with net income and company adjusted EBIT both down year over year, primarily driven by continued challenges in China.” The previous day, perhaps as a preemptive move to answer the question “If things are going poorly in China, what are you doing about it?, Ford announced that it was establishing Ford China as a stand-alone business unit.
-
Tariffs on Autos: “No One Wins”
While talk of tariffs may make the president sound tough and which gives the talking heads on cable something to talk about, the impact of the potential 25 percent tariffs on vehicles imported to the U.S. could have some fairly significant consequences.
-
Enterprise Edges into Self-Driving Car Market
U.S. rental car giant Enterprise Holdings Inc. is the latest company to venture into the world of self-driving vehicles.