As Ford Takes a Hit, Hackett Appeals to Trump to End Trade Disputes

Steph Willems
by Steph Willems
as ford takes a hit hackett appeals to trump to end trade disputes

Ford’s decision to construct the current-generation F-150’s body purely of aluminum paid off in terms of lightweighting, fuel economy, and sales, but rising commodity costs over the past couple of years eroded some of the financial benefit. There’s far greater headaches facing Ford these days, as the industry grapples with tariffs on not just imported aluminum and steel, but vehicles as well.

A second income-sucking tariff hit in July, when the U.S. applied an import duty of 25 percent on a slew of Chinese goods, prompting China to up its own tariffs on American goods, including automobiles. Ford isn’t having it. Having already lost $1 billion in profit, CEO Jim Hackett has a message for President Trump.

If the U.S. doesn’t resolve its trade disputes in a hurry, expect Ford to suffer even more, Hackett claimed.

In an interview with Bloomberg, the CEO said, “The metals tariffs took about $1 billion in profit from us — and the irony is we source most of that in the U.S. today anyways.” He added, “If it goes on longer, there will be more damage.”

Ford sources 95 percent of its steel from U.S. producers and suppliers, with 98 percent of the company’s aluminum bought from domestic sources.

As we reported earlier this week, Ford Motor Company sales in China dropped 36 percent in August. The same month, tariffs kiboshed Ford’s plan to bring the China-built Ford Focus Active to the U.S., depriving American buyers of the only small, car-like vehicle in the automaker’s future product pipeline.

Meanwhile, the company’s struggling European division stands to lose out, and perhaps never get back on its feet, if Trump boosts tariffs on European Union-built vehicles. The president threatened punitive tariffs on Europe-sourced vehicles in response to an existing 10-percent tariff levied on U.S. cars. While the EU signalled it might be okay with the dropping of all auto tariffs, that olive branch went nowhere.

“What we’re urging our administration to do — where we’re in China and in Europe — we say, you need to come to agreement quickly,” Hackett told Bloomberg.

Besides negatively impacting Ford’s profit (analysts predict a 29 percent slump for 2018), the trade dispute certainly hasn’t given investors newfound confidence in the company. Hackett’s taken a lot of heat for the company’s stubbornly depressed stock price, and Moody’s decision last month to downgrade it to near junk status didn’t help one bit. August was a bad month for Ford, and the hurt might be far from over.

[Image: Ford Motor Company]

Join the conversation
3 of 79 comments
  • Tylanner Tylanner on Sep 27, 2018

    Ummm vote democrat? You elect an idiot you get idiotic policies...

    • Inside Looking Out Inside Looking Out on Sep 27, 2018

      "You elect an idiot you get idiotic policies…" Exactly that's why you do not vote democrat.

  • Xsnake ralf Xsnake ralf on Sep 27, 2018

    Since WW2 America's been taking it in the shorts trade-wise, with most of the world. Europe and the UK were in deep economic trouble after the was Japan. The government gave them all "a hand up" with trade agreements that were very beneficial to them....not so much for us. China fell into the, "emerging" nation category....they also got trade agreements that were more beneficial to them, than us. Time to "level the playing field." Gonna hurt some companies....many customers....but in the long run....fairness will win out. Ford....don't contribute to global whining.

  • Ollicat I have a Spyder. The belt will last for many years or 60,000-80,000 miles. Not really a worry.
  • Redapple2 Cadillac and racing. Boy those 2 go together dont they? What a joke. Up there with opening a coffee shop in NYC. EvilGM be clowning. Again.
  • Jbltg Rear bench seat does not match the front buckets. What's up?
  • Theflyersfan The two Louisville truck plants are still operating, but not sure for how much longer. I have a couple of friends who work at a manufacturing company in town that makes cooling systems for the trucks built here. And they are on pins and needles wondering if or when they get the call to not go back to work because there are no trucks being made. That's what drives me up the wall with these strikes. The auto workers still get a minimum amount of pay even while striking, but the massive support staff that builds components, staffs temp workers, runs the logistics, etc, ends up with nothing except the bare hope that the state's crippled unemployment system can help them keep afloat. In a city where shipping (UPS central hub and they almost went on strike on August 1) and heavy manufacturing (GE Appliance Park and the Ford plants) keeps tens of thousands of people employed, plus the support companies, any prolonged shutdown is a total disaster for the city as well. UAW members - you're not getting a 38% raise right away. That just doesn't happen. Start a little lower and end this. And then you can fight the good fight against the corner office staff who make millions for being in meetings all day.
  • Dusterdude The "fire them all" is looking a little less unreasonable the longer the union sticks to the totally ridiculous demands ( or maybe the members should fire theit leadership ! )