The Ford Group lost $ 1.93 billion in the first quarter of the year and anticipated that the second-quarter figures will be even worse, with losses of more than $ 5 billion as a result of the impact of the COVID-19 pandemic.
Ford stopped producing vehicles in the second half of March, at the end of the first quarter, and its factories have been closed throughout April.
The company announced today that its European plants will begin to return to normal starting May 4. But in North America, the key market for Ford benefits, the plan to restart the factories is still being negotiated with authorities and workers.
Despite these difficulties, Ford President and CEO Jim Hackett said during a conference call with analysts and the media that the company is implementing measures to emerge stronger from the crisis caused by the disease.
“As in 2008-2009, one of the objectives is not only to weather the storm but to emerge from the crisis ready to build a better future,” said Hackett.
Ford’s chief executive explained that “while we take steps to conserve liquidity, we continue to move forward with our plan and this will leverage a new vehicle portfolio, a commitment to autonomous vehicles and electrification, global partnerships and a better customer experience” .
For his part, Jim Farley, Ford’s new chief operating officer, added, “We’re going to come out of this stronger.”
Regarding the results of the first three months of the year, Ford pointed out that its income fell one to 34.320 million dollars, 14.9% less than in 2019 and that its adjusted losses before interest and taxes amounted to 632 million dollars compared to 2,447 million adjusted benefits the previous year.
The figures are a consequence of the 12.5% drop in car sales in the first quarter of the year, the biggest loss of the three big American manufacturers (General Motors, Ford and Fiat Chrysler) and the biggest quarterly decline for the company. in 11 years.
Ford said that in the first quarter only North America recorded benefits for the company with earnings before interest and taxes of $ 346 million.
But in South America, the company lost 113 million, in Europe 143 million, in China 241 million and in the remaining markets 26 million dollars.
The best of the quarter were the results of Ford Credit, the financial arm of the group, had a net profit of $ 21 million after adding revenue of $ 2,967 million.
Ford Chief Financial Officer Tim Stone explained that the company has taken “decisive action” to lower its capital costs and expenses and that it has been “opportunistic” in strengthening its balance sheet and optimizing its “financial flexibility.”
“We believe the company’s cash is sufficient for the rest of the year even without additional vehicle sales or financial stocks,” added Stone.
Ford had a total of 35.1 billion in liquidity as of March 31, 2020, while Ford Credit had $ 28 billion.
Ford also noted that in the face of the pandemic it is reducing its operating costs, lowering its capital expenditures and deferring part of executive salaries.
Stone also noted that without the crisis caused by COVID-19, the company would have posted earnings before interest and taxes of about $ 1.4 billion.
Hackett ended by stating that with measures taken by the company shortly before and immediately after the spread of the COVID-19 pandemic, “we believe we safeguard Ford’s bright future.”