Ford profit down from Mexico plant hit

By Euronews

Published on 26/01/2017 - 18:28

Ford has reported a quarterly loss partly linked to abandoning a planned factory in Mexico that President Trump criticised.

Ford has reported a loss in the period from October to December last year, partly linked to pressure from President Trump.

The US carmaker said abandoning a planned factory in Mexico that he criticised cost it $200 million (187 million euros).

But it will save $500 million overall by consolidating some production it had planned there to an existing plant in Mexico.

Ford executives said the Mexico decision was driven by less demand and weak pricing for small cars, but they had been encouraged by Trump’s promises of corporate tax cuts and changes in emissions regulations.

#Ford full-year total company adjusted pre-tax profit $10.4B. #FordEarnings $F pic.twitter.com/aXxTwN6uvR
— Ford IR (@FordIR) January 26, 2017

Chief Financial Officer Bob Shanks said Ford would await specific policies of the Trump administration for an idea of how they will affect the company’s future investment plans.

“We are watching,” Shanks said.

Enough plants

Ford has enough plants in the United States now and is not planning on building a new one, Ford Chief Executive Mark Fields said on Thursday. He added that the company has expanded some plants including the one that will add 700 jobs near Detroit.

The rest of the quarterly loss was from adjustments in how it calculates pension liabilities for retired workers.

Ford’s revenue fell 4.0 percent to $38.7 billion (36.1 billion euros) in the quarter. The company said its pretax profit for 2016 was $10.4 billion (9.73 billion euros), below the a record $10.8 billion reached in 2015.

Ford’s shares fell 3.28 percent on Thrusday after it is predicting profits this year will be weaker than previously forecast.

In Europe, Ford reported a record pretax profit of $1.2 billion for the year, while its rival General Motors is in the red in Europe with its Opel and Vauxhall divisions.