DETROIT (WWJ) -- An expensive recall and changes in electric vehicle plans pushed Ford Motor Co. to a $36 million loss in the first quarter.
Take out the special one time items and Ford earned $2.1 billion pre tax, despite an $800 million hit due to tariff related costs.
Strong sales boosted Ford’s revenues to $50 billion, a record for the company.
All of this is according to figures released by Ford on Wednesday.
“Our second-quarter performance shows the power of the Ford+ plan and continued execution on cost and quality,” said Jim Farley, Ford president and CEO, in a statement. “Ford Pro is a unique competitive advantage driving both top and bottom-line growth while creating new high-margin revenue
streams from software and physical services. Ford Blue delivered profitable market share gains, and we continue to improve the efficiency of our Ford Model e business.”
Ford Pro, the company’s commercial vehicle business was again the major profit center, earning $2.3 billion pre tax. The gasoline powered vehicle business – Ford Blue – saw earnings cut to $661 million. Ford Model-E, the EV business is still posting big losses, $1.3 billion in the red, despite much higher revenues.
Ford says much of the EV loss is related to increased investments, including the new battery plant being constructed in Marshall, Michigan.
Farley says to stand by for some more EV news in the coming weeks.
“We have scheduled an event on Aug. 11 in Kentucky where we will share more about our plans to design and build breakthrough electric vehicles in America.”
Ford is now saying that tariffs will cost it about two billion dollars this year. Chief Financial Officer Sherry House says the total cost is closer to three billion, but they’ve been able to mitigate that with internal actions.
Ford is talking with the administration to try to get a tariff playing field that it believes is more level, and fairer to domestic carmakers.
“They’ve made it clear to us that Ford, as the most American automaker, should not be disadvantaged in the long run,” says House. “In fact, we’re having very constructive conversations with them to insure a more level playing field. We’re optimistic at this point, but we do have more work to do.”
Carmakers have complained that trade deals with Japan and the EU give foreign carmakers and advantage over U.S. carmakers, who face higher tariffs on parts and vehicles made in Mexico and Canada.
Ford had briefly suspended guidance because of uncertainty over tariffs. They now expect to make between $6.5 and $7.5 billion pre tax for the full year. Before the tariffs, that guidance range was between $7.0 and $8.5 billion.
House says Ford and other carmakers have been able to limit price
“We do see this happening probably a bit slower than we originally anticipated, as OEM’s are using up other inventory that they have before turning to inventory that has the higher tariffs on it.”