Following the news that Ford is expecting to make a $600 million first quarter loss and has amassed a $30 billion reserve on its balance sheet;
David Leggett, Automotive Editor at GlobalData, a leading data and analytics company, offers his views:
“Ford is taking emergency measures – principally in bolstering its cash and liquidity position – as it stares down the barrel of an unprecedented industry crisis that is completely resetting immediate company priorities.
“Facing a $600 million quarterly loss is bad enough, but the company is also on the lookout for even more cash to see it through.
“Ford’s priorities in the short-term have moved to ensuring it has sufficient cash and also reducing operating and capital costs wherever possible. Like others, it has gone into emergency mode.
“However, it has to be very careful in cost-cutting not to cut key investments that are vital for its competitive position in the longer term.
“All vehicle manufacturers face the same challenges to navigate the COVID-19 crisis, limit associated financial damage and ensure they are ready for market recovery. The problem is that no-one knows when that recovery will come and when vehicle manufacturing in Europe and North America can restart.
“Ford says it has enough cash to get through the third quarter, but is prepared to dial up credit still further if it can, an indication of how serious things have become, so quickly.
“It is shaping up to be a very tough year in the automotive industry.”