Dayton Daily News

Ford profits see $3.6B downshift

Plunge blamed on botched SUV launch, pensions, slow U.S. sales.

- By Tom Krisher

— Ford Motor Co.’s profit last year plunged by more than $3.6 billion, weighed down by slowing U.S. sales, the cost of a botched SUV launch and some big pension expenses.

The Dearborn, Michigan, automaker said it made $47 million in 2019, down from a $3.68 billion profit a year earlier. For the fourth quarter the company lost $1.7 billion, or 42 cents per share, hit by $2.2 billion in one-time pension costs.

Excluding one-time items, Ford made 12 cents per share for the quarter, falling short of Wall Street’s expectatio­ns. Analysts polled by FactSet predicted 17 cents per share.

Quarterly revenue fell 5% to $39.7 billion, about even with Wall Street estimates.

Shares of Ford, which released results after the markets closed Tuesday, tumbled 9% to $8.35 in extended trading.

Ford had said earlier that it expected to deliver better results in 2019 than in 2018.

CEO Jim Hackett said on a conference call with analysts that the company fell short of expectatio­ns for the year, and he blamed the drop primarily on the flubbed launch of the new Ford Explorer SUV at its factory in Chicago.

New Explorers came off the assembly line with multiple problems and had to be shipped to a Detroit-area factory for repairs, delaying deliveries to customers.

Hackett also referred to higher warranty costs during the year, especially for a flawed six-speed automatic transmissi­on in the Ford Focus compact car.

He said the Explorer production is now fixed and the SUVs are selling well.

“Our leadership team is determined to return to world class levels of operationa­l execution,” he said. “I have zero question that we have identified what was at risk there, what bad decisions we made, things we have to change.”

He said 2019 was a year of restructur­ing for the company as it downsized its white-collar workforce and shifted its products to higher-growth, higher-margin SUV and truck segments while exiting lower-growth sedans. Ford, he said, made cuts in Europe, restructur­ed in South America, installed new leaders in China and cut its white-collar work force globally to trim bureaucrac­y.

Hackett, who replaced ousted CEO Mark Fields in May of 2017, seemed apologetic when he said the change is taking hold. “It’s just not material enough to move the needle,” he said. “It will move the needle and it will have impact.”

Newspapers in English

Newspapers from United States