Ford's big year upended by coronavirus
This was supposed to be the year that Ford's plodding turnaround effort started to gain traction, but the novel coronavirus pandemic changed all that. Now it's all about survival.
Why it matters: With its factories shuttered and car sales down sharply, the automaker has shifted its focus to conserving cash while delaying projects like self-driving cars that could define its future.
Driving the news: Ford recorded a $2 billion net loss in the first quarter, and said Tuesday it expects a second-quarter operating loss of more than $5 billion.
- The company has slashed spending and borrowed $23 billion to weather the crisis, and says it now has enough cash to get through the year.
- “I never had a business plan that was called 'pandemic,'" CEO James Hackett told analysts. "We just never imagined the economy turning off.”
- Hackett said the company will continue to restructure its business while investing in "growth opportunities."
Yes, but: Ford said it will delay the commercial launch of its autonomous vehicles by a year, to 2022.
- The company said it needs time to evaluate how the pandemic has affected people's attitudes about shared, self-driving vehicles and potentially change its strategy to meet new consumer demands for goods delivery, for example.
- "As part of this evaluation, we also want to make sure the customer experience we are building offers people peace of mind knowing they, or their packages, are in a safe and protected environment inside our vehicles."
- Ford had been planning to launch its AV mobility services in Miami, Washington, D.C., and Austin, Texas, next year.
- While reassessing its business model, Ford's development partner, Argo AI, continues to work on the technology.
Ford said the timing of other crucial product launches this year "could slide" depending on how long the pandemic disrupts its operations. These include:
- A redesigned F-150 pickup, notably including the first hybrid version
- the electric Mustang Mach-E crossover
- A reincarnation of the popular Ford Bronco SUV
- A smaller, off-road Bronco Sport SUV
Ford has already cancelled an electric Lincoln sport utility vehicle it had planned to develop with Rivian, an EV startup in which Ford has invested $500 million.
What's next: Ford said its European factories will gradually reopen starting May 4. A reopening of North American factories remains on hold amid stay-at-home orders in many states.
- “Our team in China did a very good job managing through the crisis and provided us with a valuable template for bringing back up operations in the rest of the world,” said Ford chief operating officer Jim Farley.