U.S. carmakers move to shore up cash, Ford to restart some plants By Reuters


© Reuters. FILE PHOTO: A Ford 2018 F150 pick-up truck moves down the assembly line at Ford’s Dearborn Truck Plant during the 100-year celebration of the Ford River Rouge Complex in Dearborn

By Ben Klayman and Paul Lienert

DETROIT (Reuters) – The two largest U.S. automakers on Thursday announced measures to shore up their finances as the coronavirus pandemic takes a deep economic bite, with Ford Motor Co (N:) aiming to resume production next month of its most profitable vehicles while cutting costs further.

General Motors Co (N:), the No. 1 U.S. automaker, said it planned to keep its plants closed indefinitely and was reducing the pay of salaried employees and executives to conserve cash.[nFWN2BJ1MS[

To generate cash, Ford said it was poised to restart production at some plants in North America as early as April 6, bringing back such profitable vehicles as its top-selling F-150 full-sized pickup, the Transit commercial van and SUVs. The plants that produce those vehicles are located in the U.S. states of Michigan and Kentucky and in Mexico.

To save cash, Ford said it was temporarily cutting top executives’ salaries, among other actions. This came a day after Standard & Poor’s downgraded the Dearborn, Michigan-based company’s debt to “junk” status and warned more downgrades could be necessary.

“The actions we’re taking now are wide-ranging and substantial,” Ford’s chief executive, Jim Hackett, told employees in an email early on Thursday. “We hope they will be enough to give Ford the financial flexibility to ride out the economic and business effects of the coronavirus.”

The pandemic, which has killed more than 21,000 people globally, has forced the shutdown of auto plants around the world as entire cities have gone into lockdown to stem the spread of the virus.

Ford previously drew down credit lines to build its cash position and suspended its dividend. GM also drew down its credit line, but did not suspend the dividend.

The U.S. Senate on Wednesday passed a $2 trillion economic rescue package to help unemployed workers and companies, including the auto industry, hit hard by the outbreak. The measure has been sent to the House of Representatives for a vote on Friday.

President Donald Trump, concerned about the economic repercussions of an extended shutdown, has said he wants America to get back to business by Easter, which is April 12.

GENERATING CASH

To get more cash coming in, Ford said it would restart key plants, while introducing additional safety measures to protect returning workers from the coronavirus. It said it would provide details on the new measures later.

To conserve cash, Ford said its top 300 executives would defer 20% to 50% of salaries for at least five months starting May 1, with the executive chairman deferring his entire salary. Hackett will defer half his salary.

Hackett said Ford’s goal was to avoid layoffs during the crisis, but warned that could change if the impact of the outbreak is more severe than anticipated. Ford is also deferring salary increases more broadly, suspending overtime for salaried employees and freezing hiring in non-critical areas, he said.

However, Ford employees will continue to get healthcare coverage and those exposed to the virus and placed in quarantine will get paid time off, he added.

General Motors Co (N:) and Fiat Chrysler Automobiles NV (FCA) (MI:) (N:) previously said they would shut their North American operations through March 30 and reassess after that.

FCA on Thursday extended its shutdown through April 13, while its parts distribution centers will continue to operate with paid volunteers. Mexico’s status is subject to a separate announcement.

GM on Thursday extended its shutdown indefinitely and said it would evaluate on a week-to-week basis.

To save cash and avoid layoffs, the automaker said salaried employees would have 20% of their pay deferred, executives 25% and senior leaders 30%, starting April 1. GM said the deferred money would be repaid in a lump sum no later than March 15, 2021. Health-care benefits are not affected.

GM said near-term programs like its redesigned full-size SUVs, electric vehicles such as the Cruise Origin, and new Ultium battery “will continue as planned.” But it will adjust timing and milestones of other future programs “as necessary” to conserve cash, it added.

United Auto Workers President Rory Gamble said Thursday the union viewed announcements like Ford’s with concern, and any decision to restart production should be based on data and each state’s position with regards to the coronavirus outbreak.

The UAW has said three union members who worked at FCA plants have died due to the coronavirus.

Michigan Governor Gretchen Whitmer issued an order on Monday barring non-essential businesses from operating until April 13.

Japanese automaker Honda Motor Co Ltd (T:) said on Thursday it would resume work at its U.S. and Canadian plants on April 7.

Japan’s Toyota Motor Corp (T:) said it would extend a shutdown of its North American plants for two weeks, through April 17.

Ford plans to begin production on one shift at its Hermosillo, Mexico, assembly plant, where it builds the Ford Fusion and Lincoln MKZ sedans. It will restart production on April 14 at its Dearborn plant that builds the F-150 and a Kentucky plant that makes the Super Duty version of the pickup as well as the Ford Expedition and Lincoln Navigator SUVs. Other assembly and parts plants will restart then as well.

Ford shares closed down 2.4%, while GM rose 4.8%.





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Ford joins 3M, GE in speeding up ventilator, respirator production By Reuters


© Reuters. Frankfurt hosts the international Motor Show (IAA)

(Reuters) – Carmaker Ford Motor Co (N:) on Tuesday jumped into the emergency push by major U.S. manufacturers to produce thousands of ventilators and respirators needed for critically ill coronavirus patients.

By joining forces with General Electric ‘s (N:) healthcare unit and 3M Co (N:), Ford is taking heed of U.S. President Donald Trump’s call for U.S. automakers to work across sectors in producing equipment needed for the pandemic.

The rapid outbreak, which has killed more than 16,500 people globally, has strained healthcare systems around the world and led to a shortage of ventilators needed to treat patients suffering from the flu-like illness, which can lead to breathing difficulties and pneumonia in severe cases.

“We’ve been in regular dialogue with federal, state and local officials to understand the areas of greatest needs,” Ford Chief Executive Jim Hackett said, adding that the company’s aim was to increase the supply on necessary medical equipment.

Ford and GE Healthcare will expand the production of GE’s ventilator design to support patients with respiratory failure or difficulty breathing caused by the pathogen, Ford said.

Separately, Ford will work with 3M to increase manufacturing capacity of its air-purifying respirators to meet a surge in demand for first responders and healthcare workers.

The company said it was exploring how it could produce these new respirators in one of its Michigan manufacturing plants and help 3M boost production ten-fold. It would use fans from its Ford F-150 cooled seats to make parts of the respirators, the company said.

Additionally, Ford said its U.S. design team was starting to test transparent full-face shields for first responders, which when paired with N95 respirator masks, could be an effective way of limiting exposure to the coronavirus.

General Motors Co (N:) has also partnered with medical equipment maker Ventec and is building ventilators at its plant in Indiana.

Meanwhile, Fiat Chrysler Automobile NV (MI:), (N:) told employees in an email that the Italian-American automaker would start converting one of its China plants to ultimately make over 1 million masks a month to help combat the coronavirus outbreak.

(This story corrects company name to “Ventec” from “Ventecis” in paragraph 9)

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Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Tesla Delivery Decline, Ford Loss Forecast on Virus Fallout By Bloomberg


© Reuters. Tesla Delivery Decline, Ford Loss Forecast on Virus Fallout

(Bloomberg) — Tesla (NASDAQ:) Inc.’s 2020 deliveries will drop, Ford Motor (NYSE:) Co. will post its first annual loss since 2009 and General Motors Co (NYSE:). will burn through about $3.5 billion this year, according to an analyst seeing vehicle demand virtually stopping due to the coronavirus.

Joe Spak, an analyst at RBC Capital Markets, slashed price targets for all 22 of the companies he covers and downgraded four of them in reports Monday that assess the impact of Covid-19. He described the cuts to his projections as “drastic, but reasonably plausible” and said his team actually worries they aren’t extreme enough.

“The situation is very fluid but it’s not hard to imagine that vehicle demand comes to a complete halt amid social distancing” and “a stressed consumer,” Spak wrote. “And let’s be honest, buying a new vehicle may be a low priority for many once things settle down.”

Tesla shares plunged as much as 19% as of 10 a.m. in New York, while GM and Ford slumped as much as 14% and 11%, respectively.

Spak made the following predictions on major companies under his coverage:

Tesla

  • Maintains equivalent of sell rating, cuts price target to $380 from $530
  • Forecasts that deliveries will drop to 364,600 from almost 368,000 last year; company has guided for “comfortably” more than 500,000
  • Sees 2020 net loss on GAAP basis of $104 million; previously estimated $1.53 billion profit
  • Projects $920 million cash burn; previously forecast $1.7 billion positive free cash flow

GM

  • Maintains buy rating, cuts price target to $33 from $49
  • Forecasts 2020 adjusted Ebit of $2.8 billion; previously predicted $8.39 billion
  • Sees 2020 EPS of $1.15; earlier estimate was $6.05
  • Predicts $3.5 billion cash burn this year

Ford

  • Maintains hold rating, cuts price target to $6.50 from $9
  • Estimates 2020 total Ebit of $157 million; previously forecast $6.12 billion
  • Forecasts 2020 auto Ebit of $422 million; earlier projection was $4.99 billion
  • Sees 2020 EPS of 22-cent loss; prior estimate was $1.02 profit

(Updates with shares trading in fourth paragraph)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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GM, Ford to have white-collar employees work remotely starting Monday By Reuters


© Reuters. The corporate logo of Ford is seen at Brussels Motor Show

By Ben Klayman and David Shepardson

DETROIT/WASHINGTON (Reuters) – U.S. automakers General Motors Co (N:) and Ford Motor Co (N:) said on Friday they will have most of their white-collar workforce working remotely as of Monday to protect against the spread of the coronavirus.

GM Chief Executive Mary Barra told employees on Friday the No. 1 automaker is asking all employees and contract workers to work remotely, noting the company has faced crises before.

“For many of us, it’s our first experience of this type. But disruption and trying circumstances are not new to us,” she said in an email.

Barra said the remote-work policy applied globally apart from China, which has existing protocols in place. “Our IT tools and systems have been extensively stress-tested; it’s vital that we leverage them to continue delivering,” she said.

Ford will shift most of its global white-collar workforce outside China, where recovery has begun, to working remotely, CEO James Hackett said in an email to employees.

“In recent days … we’ve concluded the coronavirus issue has taken on a different dimension – and we need to be proactive to keep our people safe and help limit the spread of the virus in the communities where we live and work,” he said.

Italian-American automaker Fiat Chrysler Automobiles NV (MI:) (N:) (FCA) also is accelerating its deployment of remote work for white-collar employees beyond the most affected countries of China, South Korea, Japan and Italy, CEO Mike Manley said Friday.

Ford’s Hackett told employees that in the event a worker tests positive for the virus they will be told to get medical attention and self quarantine at home. Ford will identify others who may have been in contact with that person and instruct them to seek medical attention and self quarantine for 14 days.

He added Ford will close any facility exposed to a confirmed case, and a spokeswoman confirmed that includes manufacturing plants.

However, Ford has seen “limited” impact to its global operations due to the epidemic, with some employees testing positive for the virus in China and Germany but none so far in the United States, spokesman Mark Truby said.

The No. 2 U.S. automaker has not lost any vehicle production outside of China and it is taking steps to keep its plants operating, he said. However, some parts of the U.S. market have seen customer traffic at dealers hurt by the outbreak, he added.

On Thursday, FCA said an employee at its Indiana transmission plant had tested positive for COVID-19, the disease caused by the virus, but he was being treated and the plant was still operating while anyone exposed to that worker was quarantined.

Manley said in a Friday letter to employees that FCA is focused on worker safety and keeping its plants running.

“Clearly, we are now moving beyond regional hotspots and into planning for how this will impact every area of our business across the world,” he said.

Changes include allowing for greater space between employees at several plants, and stepping up cleaning and availability of face masks, Manley said.

FCA said this week it was temporarily halting operations at some Italian plants and would reduce production rates in response to the outbreak.





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Ford shakes up top management three days after weak profit outlook By Reuters


© Reuters. FILE PHOTO: Ford Motor Co’s Joe Hinrichs at the company’s Kentucky truck plant

DETROIT (Reuters) – Ford Motor Co (N:) on Friday named top executive Jim Farley its chief operating officer, positioning him as potential heir to Chief Executive Officer Jim Hackett and shaking up its top management three days after a weak 2020 profit outlook.

Farley, president of new businesses, technology and strategy, has been viewed as one of the potential successors to Hackett, who took over in 2017. News of his promotion and another perceived rival’s retirement, effective on March 1, came in the same week the No. 2 U.S. automaker saw its shares slide following the disappointing forecast.

Ford is in the midst of a global restructuring as well as slumping demand in China, its second largest market. It said the changes come as it is “moving with urgency to fully integrate and accelerate its transformation.”

“Jim Farley is the right person to take on this important new role,” Hackett said in a statement. “Jim’s passion for great vehicles and his intense drive for results are well known. He also has developed into a transformational leader with the imagination and foresight to help lead Ford into the future.”

Farley, 57, joined Ford in 2007 as global head of marketing and sales and went on to lead Lincoln, South America, Ford of Europe and all of Ford’s global markets in successive roles.

“I’m thrilled and humbled by the opportunity to work with Jim Hackett and the entire Ford team to advance our vision to design increasingly intelligent vehicles and connect them to the world around us, all to make life better for our customers and communities,” Farley said in the statement.

Ford also said Joe Hinrichs, president of automotive, will retire. Many employees and outside observers had seen him as a favorite to succeed Hackett, but the company had been criticized recently for a poor launch of its new Ford Explorer SUV and rising warranty costs.

Another executive, Hau Thai-Tang, 53, received additional responsibilities. He will continue to lead product development and purchasing, while adding responsibilities for enterprise product line management and connectivity. Thai-Tang will report to Farley.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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