Ford posts first quarterly loss in two years amid restructure

By Staff Reporters Time of article published Jan 24, 2019

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Detroit - Ford has reported its first quarterly loss in two years due to a pension accounting charge and losses in every global region except North America.

The carmaker, which recently announced an alliance with Volkswagen, is restructuring its operations globally. It is making cuts in Europe, looking to reorganise its South American operations and turn around China - all unprofitable regions.

"It was not a year we were happy with and the fourth quarter continued that theme," Chief Financial Officer Bob Shanks told reporters at the company's headquarters outside Detroit. He acknowledged the potential for such disruptions as strikes this year in regions it is restructuring.

Last week, Ford provided a cloudier 2019 outlook due to tariff costs and uncertainty over Britain's exit from the European Union, only saying it had the potential for higher earnings and revenue.

That was in contrast to Ford's larger US rival General Motors, which on January 11 forecast higher 2019 earnings that far surpassed analysts' estimates.

Shanks reiterated on Wednesday that Ford's market-leading presence in Britain gave it extensive exposure to the effects of Brexit.

Ford announced on January 10 that it would cut thousands of jobs and look at plant closures in Europe as part of its plan to return to profit in the region.

Ford posted a fourth-quarter net loss of $116 million (R1.61bn), or 3 cents a share, down from a net profit of $2.5 billion (R34.7bn), or 63 cents a share, in the same quarter in 2017, largely due to one-time pension costs and other charges.

Excluding one-time charges, it earned 30 cents a share, in line with an outlook Ford executives provided last week that was shy of Wall Street's expectations.

In North America, Ford posted a pre-tax profit of $2 billion. In every other region it saw losses, with Asia reporting the largest loss of $381 million, driven by plummeting sales in China.

On January 15, Ford and VW said they would join forces on commercial vehicles and were exploring joint development of electric and self-driving technology.

On Wednesday, sources told Reuters Germany's automakers, including VW, were in talks to jointly develop autonomous cars. VW reiterated that it was still looking for new partners, while Shanks said the companies were still in talks to close a deal.

Ford, which ended 2018 with $23.1 billion (R321bn) in cash, previously said it remained committed to its operations in Europe and South America, and its losses in China would narrow this year.

Reuters & AP

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