News - Ford
Ford’s F-150 switch hits Q3 result
Costly production change for new aluminium F-150 causes dip in Ford sales and profit
29 Oct 2014
A TIME-CONSUMING production line switch to introduce Ford’s new aluminium-bodied F-150 pick-up in Detroit has been blamed in part for a Blue Oval profit slump in the third quarter of this year.
Ford lost five weeks’ production of its biggest-selling vehicle at its Dearborn plant in Detroit, contributing to a 3.0 per cent drop in quarterly vehicle wholesales and a 2.0 per cent dip in revenue. The latter was down $US900 million ($A1.01 billion), to $US34.9 billion ($A39.4b).
The pre-tax profit slumped by more than half, from $US2.6 billion in the third quarter of last year to $US1.2 billion this year.
Its cross-town rival, General Motors, came out even on global sales volume, at 2.4 million vehicles for the quarter – the same as last year – and managed a $US300 million increase in revenue, to $39.3 billion ($A44.3b).
GM pre-tax profit took a hit, down $300 million to $2.3 billion.
Part of the drop was contributed by GM’s troubled European outfit, which recorded a $400 million loss – about double the loss of Q3 last year.
However, the after-tax profit was rosier, doubling from $700 million last year to $1.4 billion.
GM CEO Mary Barra attributed the improved after-tax result to strong global sales and growing margins in North America and China.
“Despite industry challenges in Russia and South America, our earnings were on plan as we continue to execute our customer-focused strategy,” she said.
Ford CEO Mark Fields remains upbeat for the full 2014 result, saying he expected to come in on target with a pre-tax profit of $6 billion.
“During the third quarter, we continued to introduce an unprecedented number of new vehicles and invest heavily in the new products and technologies that will deliver strong profitable growth beginning next year,” he said.
“We also addressed business challenges head on using our proven One Ford plan.
“Everyone at Ford remains focussed on accelerating our pace of progress, while delivering product excellence and innovation in every part of our business.”
Ford’s sales problems are not quite over yet, however, with United States pundits predicting an October dip of about five per cent due to the slow F-150 roll out.
The news is better for the US auto industry in general, with sales forecasters predicting a six per cent rise in October light vehicle sales, Autonews reports.
They say the October result could be the highest for the month since 2004 – before the global financial crisis – to about 1.27 million vehicles for the month.
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