Ford profit falls ahead of bid to placate Trump

Profit in the last quarter of 2016 fell 18% to $2.13b even before move to switch Mexico investments

Ford Motor Co.’s profit dropped, matching analysts’ estimates, in the last quarter before the US carmaker began to transform from campaign-trail target to a darling of President Donald Trump.

Earnings excluding some items were 30 cents a share, the company said yesterday in a statement, mirroring the average projection of 20 analysts surveyed by Bloomberg. Profit on that basis fell 18 per cent to $2.13 billion (Dh7.8 billion).

Ford’s financial well-being will be linked the next four years to the whims of a White House taking special interest in both where cars are built to how fuel efficient they’ll have to be.

Mexico jitters

Chief executive officer Mark Fields met twice this week with Trump, who’s also spoken regularly with Executive chairman Bill Ford. The president has praised the company for abandoning a $1.6 billion Focus small-car factory in Mexico and adding 700 US jobs instead.

“The announcement to cancel the new Focus plant in Mexico really scored some points with Trump,” said David Whiston, a Chicago-based auto analyst with Morningstar Inc. Ford is “through the worst of it” after several “big Twitter attacks” throughout the campaign.

As a candidate and president-elect, Trump took issue with the Mexico manufacturing site Ford chose to leave behind as of early this month. The Dearborn, Michiganbased company will still move production of Focus compacts south of the border to an existing factory, though it’s also ploughing $700 million into a plant south of Detroit.

To take on upstarts such as Uber Technologies Inc. and Waymo, Alphabet Inc.’s selfdriving car spin-off, Fields has promised to put 100,000 robot taxis on the road by 2021. Ford will spend $4.5 billion to convert about 40 per cent of its line-up to hybrid and electric models by 2020. The investment Ford announced in Flat Rock, Michigan, will prime the plant to build an all-electric sport utility vehicle and hybrid Mustang pony car by 2020, plus an autonomous vehicle for ride sharing or hailing services the following year.

The Flat Rock outlays illustrate the costly bet on electrification and selfdriving vehicles that Ford has said will drag on profits this year, a one-year blip that should give way to higher net income in 2018.