Ford Motor Co. ended a rocky 2018 with a quarterly loss and saw its full-year profit plunge by more than half.
The Dearborn, Mich.-based automaker posted a $112 million loss for the final three months of 2018. That compares with a profit of $2.5 billion for the same period in 2017.
The company’s results reflected pretax deficits in Europe, Asia and South America. Its home region in North America posted a pretax profit of $2 billion.
For all of 2018, Ford reported a $3.7 billion profit, down from $7.8 billion the year before.
Ford is looking to cut salaried jobs as it attempts to improve its finances. Last week, Ford and Volkswagen announced plans to form an alliance to develop some vehicles together, in effect saying neither can go it alone in a new automotive era of self-driving and electric vehicles.
Despite the sour results, the company said it was still positioned to do well.
“We have consistently laid the foundation for the global redesign of our business, clearly investing to sharpen our competitiveness so we can better serve customers and invest for the future,” CEO Jim Hackett said in a statement.
Ford relies on North America for the bulk of its profit. Within that region, the main source of profit is its F-Series of pickups. The company said last year it’s mostly getting out of the car business as it looks to trucks, sport-utility vehicles and crossovers. Meanwhile, Ford is struggling in other regions.
For all of 2018, Ford had a pretax profit of $7.6 billion in North America. Europe reported a pretax 2018 loss of $398 million while South America’s deficit was $678 million and Asia’s was $1.1 billion.
Ford avoided a U.S. bailout in 2009, unlike Detroit-area automakers General Motors Co. and FCA US (formerly Chrysler). That’s because of a 2006 borrowing package devised by then-CFO Don Leclair where the company put all of its assets, down to its blue oval Ford logo, up as collateral. Leclair resigned in 2008 from Ford, renown for its executive intrigue.
For most of the 2010s, Ford enjoyed robust profits as the auto industry recovered following the 2007-08 financial crisis. That resulted in CEO Alan Mulally, hired in 2006 from Boeing Co., being hailed as a turnaround artist. Mulally retired in 2014.
That was then. This is now.
Ford faces challenges as the auto industry faces its biggest shifts in a century. Self-driving and electric vehicles will require enormous investment with an uncertain payoff. The company will rely heavily on trucks and SUVs in the interim. Mulally’s successor, Mark Fields, was deposed in 2017 in favor of Hackett, a former Steelcase executive. The automaker purchased former train station in Detroit last year as part of its efforts to develop self-driving vehicles.
Ford’s revenue for the fourth-quarter totaled $38.7 billion while 2018 revenue was $148.3 billion. Both represented small increases from 2017.
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