Ford’s new chief confronts slowing sales

Jim Hackett has said little about his plans to revitalize Ford Motor Co. since he was named its chief executive two months ago, but the first earnings report in his tenure points to some of the trouble spots he must address.

Ford on Wednesday reported a modest gain in earnings for the quarter that ended in June, thanks to a big profit increase in its financing business and lower taxes. But profit declined in Ford’s auto business in North America, its most important region, and the company struggled to make money elsewhere.

“Ford can be a much better company,” Hackett said in a conference call. “We can deliver much more value for shareholders.”

He said he was conducting a review of Ford’s global operations and expected to outline a new strategy in the fall. Without revealing any specifics, he said, “We have to ask ourselves: What do we have to believe to get the returns that we expect?”

One of his first moves as chief executive was to announce that Ford would import a new version of its Focus small car from China, avoiding the cost of building a plant for it in North America.

Ford had planned to build a $1.5 billion plant in Mexico but canceled it before Hackett took the helm.

Overall, Ford reported net income of $2.04 billion in the period ending June 30, an increase of almost 4 percent from the same period a year ago. Challenging quarter

Still, it was a difficult quarter in Ford’s automotive operations. Industrywide, auto sales are slowing in the United States, and Ford’s North American auto division generated pretax profit of $2.2 billion last quarter, a 19 percent drop from a year ago. It produced 841,000 cars and trucks in the quarter, but made only $2,614 in profit on each one, on average, down from $3,206 in the second quarter of 2016.

The results mean Ford is falling behind rival General Motors, which on Tuesday said it earned $3.5 billion in North American operating profit in the second quarter. It earned an average of $4,050 per vehicle.

Ford’s difficulties will probably continue. The company said it planned to make 665,000 cars and trucks in the third quarter of this year, about 5 percent fewer than the year-ago period. Vehicles recalled

Ford is recalling nearly 117,000 vehicles because the bolts in the seat, seat belt or seat belt buckle may fracture.

The recall involves the 2014 F-Series pickup, 2014 E-Series van, 2014-2015 Ford Escape and the 2015 Lincoln MKC SUV.