Detroit: Ford Motor Co. on Thursday (October 26) withdrew its full-year earnings forecast, citing pending ratification of an agreement with the United Auto Workers (UAW), and warned of widening losses on electric vehicles, sending the company’s stock mostly down. . 5% after hours.
The union and Ford reached a tentative agreement Wednesday that includes 25% pay increases over four and a half years for 57,000 workers, ending strikes at some of the automaker’s largest plants.
Ford Chief Financial Officer John Lawler said at a press conference Thursday that the company is cutting back on part of its planned multibillion-dollar investment in new EV production capacity, citing “tremendous downward pressure” on prices. He said it would be postponed.
Like many of its competitors, Ford is “trying to find a balance between price, margins and EV demand,” he said.
Rival General Motors also announced earlier this week that it would withdraw its 2023 earnings forecast and delay the opening of its Michigan electric truck plant by a year.
Ford’s adjusted third-quarter earnings per share were 39 cents, below Wall Street’s average target of 45 cents, according to LSEG data.
Ford announced that its EV division posted a loss before interest and tax of US$1.3 billion (RM6.2 billion), which was higher than expected. The company expects a full-year loss for the Ford Model E division to be $4.5 billion.
The company said prices and profitability have been “significantly compressed” in its EV business, and customers are unwilling to pay a premium for EVs over comparable internal combustion or hybrid models.
Ford’s third-quarter sales rose 11% to $44 billion, with a profit of $1.2 billion, compared with a loss of $827 million in the year-ago period.
The company announced that both its Ford Pro commercial vehicle business and its Ford Blue internal combustion/hybrid vehicle business increased year-over-year sales, EBIT and EBIT margin.
Consultancy Anderson Economic Group announced earlier this week that the total economic losses from the strike at the Detroit Three automakers reached $9.3 billion. – Reuters
