Ford has said that due to the outbreak of the coronavirus, the company’s car sales to dealers in the first quarter fell 21% year-on-year, plus the suspension of vehicle assembly plants, the company is expecting that its pre-tax loss for the first quarter of 2020 will reach $600 million.
Ford said it expects its adjusted pre-tax loss for the first quarter to be about $600 million, compared with a profit of $2.4 billion a year ago. The company also stated that it expects revenue in the first quarter to be approximately $34 billion. In early trading, Ford shares fell 30 cents, or 5.6%, to $5.09 per share.
Currently, of all Ford’s global plants, only joint ventures in China are producing vehicles. Ford said it is working on plans to restart production in stages in the second quarter.
When asked whether Ford would apply for loans from the US government or the Fed to maintain longer operations if needed, a company spokesperson said that unlike the capital depletion during the Great Recession, the current capital market still has Ample liquidity. The spokesman said that if needed, “we have a lot of choices” to obtain additional funds.
Ford said that as of April 9, it had about $30 billion in cash on its balance sheet, including $15.4 billion drawn from two existing credit lines last month.
Ford also said that any decisions related to restarting the factory will be discussed with “local unions, suppliers, distributors and other stakeholders.” In March, Ford closed its factories in North America and Europe due to the spread of the epidemic.
Earlier this month, Ford said its US sales in the first quarter fell by 12.5%. The US market is Ford’s main source of profit, and its pickup and SUV models are very popular in the US market. On April 2, Mark LaNeve, Ford’s head of sales in the US market, said that the company believes that after the COVID-19 epidemic subsides, American consumers need a certain degree of government stimulus before market demand will improve.