{"id":159268,"date":"2021-02-04T18:59:21","date_gmt":"2021-02-04T23:59:21","guid":{"rendered":"https:\/\/www.thedetroitbureau.com\/?p=159268"},"modified":"2021-02-05T08:08:17","modified_gmt":"2021-02-05T13:08:17","slug":"ford-loses-2-8b-in-q4-as-restructuring-pandemic-hit-bottom-line","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2021\/02\/ford-loses-2-8b-in-q4-as-restructuring-pandemic-hit-bottom-line\/","title":{"rendered":"Ford Loses $2.8B in Q4 as Restructuring, Pandemic Hit Bottom Line"},"content":{"rendered":"
\"\"<\/a>
Ford CEO Jim Farley expects the company’s restructuring will begin to produce positive results.<\/figcaption><\/figure>\n

Ford Motor Co. ended 2020 posting a loss for the final quarter of the year as well as for the full year as the pandemic wreaked havoc on the company\u2019s already difficult financial position.<\/p>\n

The automaker reported a net loss of $2.8 billion, or 70 cents per share, on revenue of $36 billion during the fourth quarter, pulling the full year\u2019s results down to a net loss $1.3 billion, or 32 cents per share, on revenue of $127.1 billion.<\/p>\n

In the midst of a corporate-wide restructuring process to improve its profitability<\/a><\/strong><\/span>, the company was also hit hard \u2014 like most automakers \u2014 by the COVID-19 pandemic. While the numbers weren\u2019t great, it\u2019s a means to an end.<\/p>\n

\u201cWe are profoundly changing the trajectory of our earnings power,\u201d said John Lawler Ford\u2019s chief financial officer, \u201cunlocking the tremendous value Ford can create for customers, shareholders and other stakeholders.\u201d<\/p>\n

Sticking to the plan<\/h2>\n
\"\"<\/a>
Ford CFO John Lawler said the automaker could lose 10% to 20% of its Q1 production due chip shortages.<\/figcaption><\/figure>\n

That earnings power is focused on securing an 8% adjusted EBIT margin, specifically 10% in the U.S. and 6% in Europe with the rest of the company\u2019s regional operations turning a profit too. Lawler said the company\u2019s third and fourth quarter results \u201cprovided evidence of progress\u201d in the company\u2019s effort to improve profitability.<\/p>\n

Despite the losses, Ford did improve its overall liquidity, finishing 2020 with $31 billion in cash and a total liquidity of almost $47 billion.<\/p>\n

On an adjusted basis, the company\u2019s EBIT of $1.7 billion, up from $485 million during the year-ago period. The automotive EBIT margin was 3.8%. The company noted that the gains were \u201cbroad-based and largely resulted from improved pricing and lower structural costs, as well as the overlap with UAW contract-ratification costs in 2019.\u201d<\/p>\n

Company officials acknowledged the year wasn\u2019t what they hoped and were optimistic about 2021. Ford\u2019s Lawler said the company was on course to earn $8 billion to $9 billion in adjusted EBIT \u2013 including a $900 million non-cash gain on its investment in Rivian \u2013 and generate $3.5 billion to $4.5 billion in adjusted free cash flow in 2021.<\/p>\n

Semiconductor shortage may hit bottom line<\/h2>\n

This optimism comes despite an ongoing issue with semiconductor availability. Lawler said the company was diligently monitoring the situation, but it is \u201cso liquid\u201d that it\u2019s tough to determine what the impact on the bottom line will be.<\/p>\n

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Ford is cutting shifts at its Kansas City (above) and Dearborn assembly plants next week.<\/figcaption><\/figure>\n

He did estimate the company could lose as much as 20% of its first quarter production as plants are forced to shut down temporarily<\/a><\/strong><\/span>, and that those losses could continue throughout the first half of the year. It\u2019s possible to make up some of that in the second half, he noted, but it was too early to tell.<\/p>\n

In fact, he noted that the company is cutting three shifts at its full-size truck plants in Dearborn, Michigan and Kansas City, Missouri, next week as the semiconductor issue continues to plague the automaker. Earlier in the day, it announced plans to temporarily close its SUV plant in Oakville, Ontario, in part due to a chip shortage.<\/p>\n

The shortages could lower Ford\u2019s 2021 adjusted EBIT by $1 billion to $2.5 billion, he said. He added the company expects full-year cash and EBIT effects to be about equal \u2013 with quarterly cash implications more volatile, given the mechanics of company working capital.<\/p>\n","protected":false},"excerpt":{"rendered":"

Ford Motor Co. ended 2020 posting a loss for the final quarter of the year as well as for the full year as the pandemic wreaked havoc on the company\u2019s already difficult financial position. The company lost $1.3 billion in 2020, but there are brighter days ahead, officials noted. Get details at TheDetroitBureau.com.<\/p>\n","protected":false},"author":4389,"featured_media":153767,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,8,5,12],"tags":[],"make":[56],"post-state":[],"category_old":[118,286,150,151,123,287,131,173,289,299,171,248,132,130,284,125,124,139,290,128,291,288],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/159268"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/4389"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=159268"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/159268\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/153767"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=159268"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=159268"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=159268"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=159268"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=159268"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=159268"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}