Ford says second-quarter loss due to coronavirus to exceed $5 billion
By Ben Klayman and Nick Carey DETROIT (Reuters) - Ford Motor Co on Tuesday posted a $2 billion first-quarter loss due to the impact of the coronavirus pandemic and said it expected its loss in the second quarter to more than double as it weathers a shutdown of its North American plants. 'We believe the company's cash is sufficient to take us through the end of the year, even with no additional vehicle wholesales or financing actions,' Chief Financial Officer Tim Stone said in a statement. According to Stone, 'today’s economic environment remains too ambiguous' for the No.
coronavirus to exceed $5 billion" src="https://images.firstpost.com/wp-content/uploads/reuters/04-2020/29/2020-04-28T104541Z_1_LYNXNPEG3R0WY_RTROPTP_2_FORD-MOTOR-RESULTS.jpg" alt="Ford says secondquarter loss due to coronavirus to exceed 5 billion" width="300" height="225" />
By Ben Klayman and Nick Carey
DETROIT (Reuters) - Ford Motor Co
"We believe the company's cash is sufficient to take us through the end of the year, even with no additional vehicle wholesales or financing actions," Chief Financial Officer Tim Stone said in a statement.
According to Stone, "today’s economic environment remains too ambiguous" for the No. 2 U.S. automaker to give a full-year 2020 earnings forecast.
The company has slashed costs during the COVID-19 outbreak to weather the shutdown, including cutting salaries of executives and white-collar employees.
Ford shares were down more than 6% in after-hours trading on Tuesday.
Ford had preannounced the pandemic-fueled loss earlier this month. 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's captive finance arm posted $30 million in first-quarter pretax earnings, down $771 million versus the same period in 2019. This included $600 million in additional-loss reserves, plus higher depreciation of former lease vehicle sales and expected lease defaults – in preparation for the estimated future impact of the coronavirus on the finance unit's performance.
Ford, General Motors Co
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 said Tuesday it will restart most of its European manufacturing starting on May 4. It has already 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
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 that offered consumers rebates of up to $4,500 to trade in older gas guzzlers.
Ford said its cash burn rate has remained high because it pays suppliers with a lag of 45 days. The company said its cash outflow will fall substantially after early May as Ford catches up with bills through to when it shut down in March.
(Reporting by Ben Klayman and Nick Carey in Detroit; Editing by Steve Orlofsky and Matthew Lewis)
This story has not been edited by Firstpost staff and is generated by auto-feed.
ATHENS (Reuters) - Greek police used teargas and water cannon to disperse people who had gathered in central Athens on Saturday to protest against mandatory COVID-19 vaccinations. More than 4,000 people rallied outside the Greek parliament for a third time this month to oppose mandatory inoculations for some workers, such as healthcare and nursing staff.
ISTANBUL (Reuters) - Two Turkish soldiers were killed and two were wounded in an attack on their armoured vehicle in northern Syria, and Turkish forces immediately launched retaliatory fire, Turkey's defence ministry said on Saturday. "Our punitive fire against terrorist positions is continuing," the statement on Twitter on said. It did not specify where the attack occurred, but media reports said it was in the al-Bab area.
By Marcelo Rochabrun SAO PAULO (Reuters) - Protesters took to the streets in several Brazilian cities on Saturday to demand the impeachment of far-right President Jair Bolsonaro, whose popularity has fallen in recent weeks amid corruption scandals against the backdrop of the pandemic. This week, news broke that Brazil's defense ministry told congressional leadership that next year's elections would not take place without amending the country's electronic voting system to include a paper trail of each vote. Bolsonaro has suggested several times without evidence that the current system is prone to fraud, allegations that Brazil's government has denied