Ford announced March 20 that it will fully utilize two lines of credit of up to $15.4 billion, including a $13.4 billion corporate credit facility and a $2 billion supplemental credit facility, to ensure that its cash flow is stable.
Withdrawal of Financial Performance Targets Again After Significant Losses
Faced with work stoppages and poor market conditions caused by the sudden outbreak, Ford has decided to withdraw its 2020 financial performance targets released on Feb. 4 and will provide updated business targets when it reports first-quarter results on April 28th.
Previously, Ford expected 2020 operating profit to be in the range of 94 cents to $1.20 per share; 2020 EBITDA of $5.6 billion to $6.6 billion; full-year adjusted free cash flow of $2.4 billion to $3.4 billion; and capital expenditures expected to be in the range of $6.8 billion to $7.3 billion.
It's worth noting that Ford was already in the midst of a sharp decline in net profit and a global business reorganization, and the outbreak has increased the pressure on Ford. Ford's 2019 net profit was only $47 million, a 98.7 percent decrease from $3.7 billion in 2018. Meanwhile, Ford's business restructuring is still in the crunch, with $3.7 billion already invested in restructuring in 2019, and another $900 million to $1.4 billion expected to be accounted for in 2020.
On top of that, Ford announced that it will suspend its dividend and will continue to make some necessary investments to ensure that new models come to market in 2020.
Switching to production of respirators and other medical equipment
Ford had announced this week that its plants in the U.S., Canada and Mexico would suspend production on the night of March 19 and thoroughly clean and sanitize the plants.
Meanwhile, Ford is also closing its Valencia, Spain, plant, which employs 7,000 people and produces more than 400,000 vehicles a year.
Just as some car companies in China produced special-needs items during the outbreak, Ford has received requests for assistance from the government. on March 18, Ford said it was in discussions with White House officials about switching to the production of medical equipment, such as ventilators, in response to the outbreak of the new coronavirus.
In response, Ford responded, "We have had preliminary discussions with the U.S. government and are investigating the feasibility." Previously, the British government had sent Ford the same request for assistance. A representative of Ford UK had also revealed that Ford had gotten the production targets related to respirators from the government and was now considering the feasibility of switching production.
On top of that, the new Ford Bronco?SUV has also been delayed due to the outbreak. The car was scheduled for a launch this week, and the Bronco?SUV had been Ford's first-ever SUV, Ford's first move after the car was repeatedly rumored to be resurrected.
And, Ford is actively preparing for a return to work. Ford says it will work with labor representatives to safely and efficiently resume production in the coming weeks.
This article comes from the authors of the Motorhome Car Family, and does not represent the views of the Motorhome Car Family position.