Last year was tough for almost every carmaker, but 2018 hit Ford a little harder than most.
For the first time in two years, Ford Motors posted a quarterly loss last Wednesday. In a conference call with investors, Chief Financial Officer Bob Shanks said that 2018 was "not a year that we were happy with."
According to a report from the Associated Press, Ford posted a loss of $116 million in the fourth quarter for 2018 or a loss of roughly 3 cents per share. The last time Ford posted a quarterly loss was back in the fourth quarter of 2016.
Ford is by no means losing money in general; the company still made a $2.52 billion profit last year. However, Ford’s CEO Jim Hackett replaced outgoing CEO Mark Fields back in 2017 with the promise of increasing Ford’s share price. A quarterly loss isn’t something that Wall Street likes to hear.
There are many reasons why Ford posted that loss, starting with the $11 billion the company is spending on corporate restructuring. Ford is flattening operations in the US and abroad, eliminating positions through natural attrition (at least for now), as well as reducing factory loads while they rejigger operations for new vehicles.
Sales are also down pretty much everywhere. In the US, Ford sales are down 3.5% compared to 2017, and Ford lost 4% market share on news that they were ditching cars in favor of trucks and SUVs. On the other hand, Ford’s average sale price rose 14% as a result of this move, which means they’ll be a more profitable company going forward.
But Ford really took a hit globally. The oldest carmaker in the world lost $1.1 billion in the Asia Pacific region, mostly on poor sales in China. Europe lost $398 million, South America lost $678 million, and the Middle East lost $7 million.
Ford also reported $3.3 billion lost due to tariffs and recalls. Roughly $750 million in losses can be directly attributed to US-imposed metal tariffs, while unrelated commodity costs rose by $1.1 in part due to the ongoing trade war with China.
Ford expects 2018 to represent a net profit of $3.68 billion, roughly half of what it was the year before.