Ford CEO Mark Fields (R) speaks to the press with Fiat-Chrysler CEO Sergio Marchionne (C) and General Motors CEO Mary Barra following a meeting of automakers with US President Donald Trump at the White House in Washingon, DC, on January 24, 2017. / AFP /
Washington: Ford Motor Co.’s profit dropped, matching analysts’ estimates, in the last quarter before the US carmaker began to transform from campaign-trail target to a darling of President Donald Trump.
Earnings excluding some items were 30 cents a share, the company said yesterday in a statement, mirroring the average projection of 20 analysts surveyed by Bloomberg. Profit on that basis fell 18 percent to $2.13bn.
Ford’s financial well-being will be linked the next four years to the whims of a White House taking special interest in both where cars are built to how fuel efficient they’ll have to be. Chief Executive Officer Mark Fields met twice this week with Trump, who’s also spoken regularly with Executive Chairman Bill Ford. The president has praised the company for abandoning a $1.6bn Focus small-car factory in Mexico and adding 700 US jobs instead.
As a candidate and president-elect, Trump took issue with the Mexico manufacturing site Ford chose to leave behind as of early this month. The Dearborn, Michigan-based company will still move production of Focus compacts south of the border to an existing factory, though it’s also plowing $700m into a plant south of Detroit. The investment Ford announced in Flat Rock, Michigan, will prime the plant to build an all-electric sport utility vehicle and hybrid Mustang pony car by 2020, plus an autonomous vehicle for ride sharing or hailing services the following year.
The Flat Rock outlays illustrate the costly bet on electrification and self-driving vehicles that Ford has said will drag on profits this year, a one-year blip that should give way to higher net income in 2018. The company reiterated its guidance for 2017 results to come in “generally lower” than last year, driven by heavy investment.
To take on upstarts such as Uber Technologies Inc. and Waymo, Alphabet Inc.’s self-driving car spinoff, Fields has promised to put 100,000 robot taxis on the road by 2021. Ford will spend $4.5bn to convert about 40 percent of its lineup to hybrid and electric models by 2020.
The CEO has said he’s hopeful Trump follows through on promises to cut corporate taxes and ease regulations. Even if Trump makes good on a threat to institute a “border tax” on vehicles imported from Mexico, Fields believes Ford could benefit because it makes so many vehicles in the US.
