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Ford Motor in the beginning yet again of another multiyear reorganization reported a $1.3 billion loss on $127.1 billion in revenue for 2020 and a $2.8 billion net loss on $36 billion in revenue for Q4.
Chasing General Motors, Ford said it would increase its planned investments in electric and autonomous vehicles to more than $22 billion and $7 billion in turn through 2025. GM caught the industry by surprise when it said it would have 30 new EVs globally during roughly that period. It was the latest Ford attempt to appease the capital markets which remain skeptical about the lackluster performance of the Dearborn based automaker. (See AutoInformed.com on Environmental About Face – General Motors Ditching Internal Combustion Engines by 2035. Carbon Neutral by 2040?)
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“The transformation of Ford is happening and so is our leadership of the EV revolution and development of autonomous driving,” claimed CEO Jim Farley. “We’re now allocating a combined $29 billion in capital and tremendous talent to these two areas, and bringing customers high-volume, connected electric SUVs, commercial vans and pickup trucks.”
With the exception of North America and Europe, Ford’s automobile businesses lost money in Q4 and the Full Year in every other major region – including China where the economy is thriving. Its earnings before interest and taxes (EBIT) are slight at 4.9% or adjusted a paltry 2.2% Chief Financial Officer John Lawler forecast that the automaker is on track to earn between $8 billion and $9 billion in adjusted pre-tax earnings this year.
The SEC required qualification on forward looking statements applies here as the global shortage of microchips is ongoing. Short supply of the components powering electronics in vehicles could result in a 10% to 20% production loss in the first quarter. If current estimates were projected across the first half of the year, Lawler predicted the shortage could result in an adjusted pre-tax earnings loss of between $1 billion and $2.5 billion this year. (700,000 vehicles will not be made in this quarter by major automakers says IHS Markit) Also, Ford has a bad record in smoothly introducing complex new vehicles as the botched Explorer launch illustrated.*
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Ford says it will discuss the potentially devastating problem when it releases Q1 2021 results on April 28. Lawler said the automaker will be looking to “maximize profitability” by allocating its limited chip supply to high-margin vehicles. However, Ford admits that the shortage is having an impact on production of the F-150, Ford’s highest-volume and most-profitable vehicle. The two plants where F-150 are assembled, Dearborn Truck and Kansas City, will operate on reduced shifts next week. General Motors benefited from the shortage and the new F-150 changeover and actually picked up 1 percentage-point of market share in trucks, so to speak, in Q4.
*See AutoInformed.com on:
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Ford Motor 2020 Loss $1.3 Billion. Microchip Shortage Looms
Click to Enlarge.
Ford Motor in the beginning yet again of another multiyear reorganization reported a $1.3 billion loss on $127.1 billion in revenue for 2020 and a $2.8 billion net loss on $36 billion in revenue for Q4.
Chasing General Motors, Ford said it would increase its planned investments in electric and autonomous vehicles to more than $22 billion and $7 billion in turn through 2025. GM caught the industry by surprise when it said it would have 30 new EVs globally during roughly that period. It was the latest Ford attempt to appease the capital markets which remain skeptical about the lackluster performance of the Dearborn based automaker. (See AutoInformed.com on Environmental About Face – General Motors Ditching Internal Combustion Engines by 2035. Carbon Neutral by 2040?)
Click to Enlarge.
“The transformation of Ford is happening and so is our leadership of the EV revolution and development of autonomous driving,” claimed CEO Jim Farley. “We’re now allocating a combined $29 billion in capital and tremendous talent to these two areas, and bringing customers high-volume, connected electric SUVs, commercial vans and pickup trucks.”
With the exception of North America and Europe, Ford’s automobile businesses lost money in Q4 and the Full Year in every other major region – including China where the economy is thriving. Its earnings before interest and taxes (EBIT) are slight at 4.9% or adjusted a paltry 2.2% Chief Financial Officer John Lawler forecast that the automaker is on track to earn between $8 billion and $9 billion in adjusted pre-tax earnings this year.
The SEC required qualification on forward looking statements applies here as the global shortage of microchips is ongoing. Short supply of the components powering electronics in vehicles could result in a 10% to 20% production loss in the first quarter. If current estimates were projected across the first half of the year, Lawler predicted the shortage could result in an adjusted pre-tax earnings loss of between $1 billion and $2.5 billion this year. (700,000 vehicles will not be made in this quarter by major automakers says IHS Markit) Also, Ford has a bad record in smoothly introducing complex new vehicles as the botched Explorer launch illustrated.*
Click to Enlarge.
Ford says it will discuss the potentially devastating problem when it releases Q1 2021 results on April 28. Lawler said the automaker will be looking to “maximize profitability” by allocating its limited chip supply to high-margin vehicles. However, Ford admits that the shortage is having an impact on production of the F-150, Ford’s highest-volume and most-profitable vehicle. The two plants where F-150 are assembled, Dearborn Truck and Kansas City, will operate on reduced shifts next week. General Motors benefited from the shortage and the new F-150 changeover and actually picked up 1 percentage-point of market share in trucks, so to speak, in Q4.
*See AutoInformed.com on:
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.