By Jeff L. Tucker, The Chicago Times
February 3, 2023
DEARBORN, MI – Ford Motor Company announced Thursday that fourth-quarter net income plummeted 90% from a year earlier. Ford executives admitted that costs are too high in this inflationary period and vowed to slash spending this year.
In a press release, Ford CEO, Jim Farley, said “We should have done much better last year. We left about $2 billion in profits on the table that were within our control, and we’re going to correct that with improved execution and performance.”
To help reduce costs, Farley also said Ford is transforming its product development, manufacturing, and supply-chain management as it goes down the electric vehicle production route.
Chief Financial Officer, John Lawler, blamed the global shortage of computer chips and other component parts prevented Ford from producing and selling almost 100,000 units. Lawler declined to comment as to why those parts should not be manufactured in the United States.
Farley and Lawler said outright that there will be more white-collar layoffs and cuts to manufacturing and warranty costs. They also declined to comment on how much UAW demands affect final product prices and overall production costs.
Despite the $2 billion loss, Ford shareholders will enjoy an $.80 first-quarter dividend attributed to strong cash flow and the monetization of its stake in Rivian.
According to the earnings report, for 2023, Ford expects to earn $9 billion to $11 billion in adjusted EBIT, presuming “. . . seasonally adjusted annual rates of about 15 million vehicles in the U.S. and about 13 million in Europe. The company anticipates generating about $6 billion in adjusted free cash flow, which assumes no distributions from Ford Credit.”