Search

Ford investors keen for details on when automaker will restart U.S. operations - Reuters

DETROIT (Reuters) - Investors already know how the coronavirus outbreak has hurt Ford Motor Co’s (F.N) bottom line, so when the automaker releases first-quarter results on Tuesday they will focus on how and when Ford plans to restart North American operations.

FILE PHOTO: The Ford logo seen at the North American International Auto Show in Detroit, Michigan, U.S., January 15, 2019. REUTERS/Brendan McDermid/File Photo

Ford said on April 17 that the outbreak would result in an estimated first-quarter loss of about $2 billion. That warning came the same day the Dearborn, Michigan-based company raised $8 billion from corporate debt investors.

Last month, Ford moved to hoard cash on its balance sheet, drawing down $15.4 billion from two credit lines and suspending its dividend, in a move to bolster reserves to ride out damage to its business. It also abandoned its 2020 financial forecast.

Virtually all U.S. automotive production ground to a halt in March as the number of COVID-19 infections grew rapidly. However, with President Donald Trump pushing for Americans to get back to work and several U.S. states beginning to reopen their economies, the focus in the auto sector has shifted to when production can be restarted.

Ford, General Motors Co (GM.N) and Fiat Chrysler Automobiles NV (FCA) (FCHA.MI) (FCAU.N) are aiming to resume production some time in May, and are negotiating with the United Auto Workers (UAW) union, which represents their U.S. hourly workers, about how to safely resume vehicle production. FCA and GM are scheduled to report quarterly results on May 5 and 6, respectively.

Last week, the UAW said it was “too soon and too risky” to reopen auto plants in early May.

Ford, whose credit rating has been downgraded to “junk” status by Standard & Poor’s, has not said when it plans to reopen in North America. It previously had hoped to resume production in April at plants that make its most profitable vehicles, but subsequently backed off those plans.

Ford has idled most of its European plants until May 4, but has resumed operations in China, where the pandemic began and where sales fell 35% in the first quarter. U.S. sales fell 12.5%.

Prior to the bond deal, Ford told investors that absent new funding and a restart of production, it had cash to last until the end of the third quarter. It also said revenue in the first quarter would finish at about $34 billion.

Ford also warned that production of high-priced versions of pickups and SUVs could be hurt due to damage caused by a tornado at parts supplier BorgWarner Inc’s (BWA.N) South Carolina factory. That facility makes transfer cases for some of Ford’s most profitable vehicles, such as four wheel-drive large F-series pickups and large SUVs.

Once production resumes, the question will be how fast U.S. demand bounces back.

Earlier in April, Ford’s U.S. sales chief, Mark LaNeve, told Reuters the automaker believed some level of government stimulus for the U.S. auto sector will be needed for consumers once the pandemic recedes.

During the Great Recession of 2008-09, the U.S. government rolled out a “cash for clunkers” program, which offered consumers rebates of up to $4,500 to trade in older gas guzzlers.

Reporting by Ben Klayman and Nick Carey in Detroit; Editing by Matthew Lewis

Let's block ads! (Why?)



Business - Latest - Google News
April 28, 2020 at 05:06PM
https://ift.tt/2W8pkqv

Ford investors keen for details on when automaker will restart U.S. operations - Reuters
Business - Latest - Google News
https://ift.tt/2Rx7A4Y

Bagikan Berita Ini

0 Response to "Ford investors keen for details on when automaker will restart U.S. operations - Reuters"

Post a Comment

Powered by Blogger.