Amid Virus Chaos, Ford Erects Financial Firewall
Looking to cover its financial ass with available cash, Ford Motor Company announced a series of measures on Thursday to ease it through the ongoing pandemic.
If you’re a shareholder, kiss that dividend goodbye. However, if you’re in the mood to skip the toilet paper line outside Costco and head to the dealer instead, the Blue Oval has an offer for you.
The biggest financial move is the addition of over $15 billion of cash to the automaker’s balance sheet, drawn from two credit lines, to cover the planned shutdown of all U.S. assembly plants (to say nothing of planning for an even rainier day in the near future). Further cash protection comes from the automaker’s decision to suspend its dividend.
As for the company’s guidance for the current year, that performance prediction is null and void.
“Like we did in the Great Recession, Ford is managing through the coronavirus crisis in a way that safeguards our business, our workforce, our customers and our dealers during this vital period,” Ford CEO Jim Hackett said in a statement. “As America’s largest producer of vehicles and largest employer of autoworkers, we plan to emerge from this crisis as a stronger company that can be an engine for the recovery of the economy moving forward.”
At the end of 2019, Ford had $22 billion in cash on hand.
“The company will provide an update on the year when it announces first-quarter results, which is currently scheduled for April 28,” Ford announced.
As the fast-moving coronavirus pandemic leaves markets and manufacturers in disarray, Ford announced the suspension of production at its European and North American assembly plants earlier this week. The shutdowns could easily go longer than planned. In fact, given the nature of the virus, it would be unusual to not see the idle period extended (or re-imposed in the future).
On the buy side, Ford hopes to lure hesitant customers into showrooms with a three-month payment deferral, bolstered by three additional months paid for by the manufacturer. That effort falls under the eye-rolling banner of Ford’s “Built to Lend a Hand Program.” All 2019 and 2020 model-year Ford vehicles apply, minus the big-bucks, high-margin 2020 Ford Super Duty line.
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- Malcolm Mini temporarily halted manual transmission production but brought it back as it was a surprisingly good seller. The downside is that they should have made awd standard with the manual instead of nixing it. Ford said recently that 4dr were 7% manual take rate and I think the two door was 15%.
- Master Baiter It’s hard to make predictions, especially about the future. It will be interesting to see if demand for Ford’s EVs will match the production capacity they are putting on line.
- Brett Woods 2023 Corvette base model.
- Paul Taka Hi, where can I find 1982 Honda prelude junkyards in 50 states
- Poltergeist Make sure you order the optional Dungdai fire suppression system.
I was in the market for a new vehicle up until this weekend. I'm holding out for an indication that employer will survive. For a used vehicle, I'm waiting for a direct need. For instance, it's easy to imagine that I may need head out across the country looking for work, and towing a small travel trailer with a used SUV would make sense in this scenario. For a new vehicle, I'm looking for the following things: 0) Assurances that both my wife and I will keep our six-figure jobs. 1) A plug and 30-miles all electric range. 2) Three rows and a 5000lb towing capacity. 3) 0% interest. The information I need to make a decision isn't yet available.
Tremor might be replacing my Raptor.....I’m diggin’ it....