Ford profits slump 86 per cent in wake of restructure
Blue Oval says profits were soaked up in massive shake-up of its European operationFord has announced that in the second quarter of 2019 its net income nosedived an incredible 86 per cent to just $US148 million ($A212m).
Attributing the drop in earnings to restructuring in Europe and other markets, the car-maker announced that -- excluding deductions related to the restructuring -- its earnings before interest and taxes actually fell only two per cent year-on-year to $US1.65 billion ($A2.3b).
In North America earnings dropped three per cent to $US1.7 billion ($A2.5b) – with a profit margin of 7.1 per cent, down 0.3 per cent from Q2 of 2018.
Addressing market concerns, the US car-making giant says it would strive for a double-digit margin in the future.
Blaming the huge restructuring in Europe and South America, including plant closures and job cuts, Ford claimed one of the largest shake ups in its recent history soaked up an incredible $US1.2 billion ($A1.7b) of its profits.
Last month, Ford confirmed it would slash 12,000 jobs in Europe before the end of 2020 in a bid to reduce the number of manufacturing facilities from today's 24 plants to just 18.
Following today's news, Ford says it expects to make around $US7-7.5 billion ($A10-10.8b) before interest and taxes, which will actually represent a growth of up to seven per cent.
Commenting on the results, Ford's CEO Jim Hackett said: “Midway through this key year of action, we are pleased with the progress we are making toward creating a more dynamic and profitable business.”
Globally, the F-Series pick-up truck remains its best-selling vehicle followed by the Escape and Explorer SUVs.
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