Ford has reconfirmed there will be a new F-150 full-size pickup truck this year, one of many key vehicle launches in question during this time of pandemic when plants have stopped making cars and trucks, dealers have closed their showrooms, and consumers were told to stay home around the world.
During a call with investors to discuss the sad state of first-quarter earnings, executives provided a few updates on the timing of crucial new vehicles slated to hit the market.
There have been reports the launch of the new F-150 (whose dashboard was recently leaked) has been delayed but chief financial officer Tim Stone said it is scheduled for later this year. The current F-150 dates back to the 2015 model year, making it older than the current Ram 1500 and the Chevrolet Silverado and GMC Sierra pickups. Ford chief operating officer Jim Farley said work continues on the next-generation truck, which will include a gas-electric hybrid model.
The F-Series is the profit machine at Ford, but its sales will be affected by the overall decline in volumes this year because of the pandemic, Stone said.
Ford has three other key vehicles coming, including the Ford Bronco SUV in 2021 and the Ford Bronco Sport and Mustang Mach-E electric SUV that were originally scheduled for this year.
The reveal dates for the two Broncos has been pushed back. The Bronco Sport, which is the rugged-looking mechanical cousin to Ford’s Escape compact crossover, is expected to begin production in September at Ford’s Hermosillo, Mexico, plant. That would be nearly 60 days after the original July 13 target, according to supplier information obtained by Automotive News. The Bronco might be far enough out, and important enough to prioritize, to retain its launch plans. There are already reports that deliveries of the Mustang Mach-E to European customers have been pushed back to later in the year.
Rivian Won’t Make Lincoln Electric SUV
But one casualty of the need to cut costs and prioritize is the news that Ford is no longer partnering with Rivian to make an electric SUV for Lincoln. The Lincoln EV will continue development but it will use Ford’s own electric vehicle architecture instead of the Rivian skateboard platform.
Ford had invested more than half a million dollars in Rivian and was full of praise for the electric carmaker’s engineering, and also planned to contract the manufacturing of the Lincoln crossover to Rivian to be built at its plant in Normal, Illinois. Lincoln says it continues to partner with Rivian and will work on an alternative vehicle based on Rivian’s skateboard platform sometime in the future.
Ford does not have a timeframe for making the electric Lincoln crossover itself. It posts that, “We continue to review and adjust our business and product plans—as all prudent businesses do. As we moved through the development cycle, we determined that it would be better to pivot from the Rivian skateboard platform and focus our development efforts on Lincoln’s own fully electric vehicle.”
With global auto sales plummeting and losses building, Ford is continuing to restructure while cutting or delaying costs where possible. The launch of self-driving services, for example, will be pushed back to 2022.
“There is no grace period for transforming Ford,” said Farley. “We’ve ratcheted down spending across the board.”
When Will Ford Open Plants?
The automaker is also planning to safely resume production. Ford is targeting a May 4 start in Europe and tentatively May 18 in North America, although executives would not be tied down to dates on Tuesday. Ford CEO Jim Hackett said it will be a gradual ramp-up and take a few months for everything to be back to full production around the world.
Stone said more precise updates on the timing of vehicle launches will be forthcoming when they have a better idea as to when the plants will be operational.
Ford Financial Losses Due to the Pandemic
Ford had already warned of a revenue drop in the first quarter of 2020, having experienced a 12.5 percent drop in sales in North America and a 35 percent falloff in China, where the pandemic began and which saw the first plant closures. Ford warned it expected to lose as much $2 billion in the quarter, far more than its prior estimate of a $600 million pretax loss. The official results show Ford did in fact post a net loss of $2 billion on revenue of $34 billion. The automaker estimated the impact of the virus cost the company at least $2 billion. Executives also warned that losses could exceed $5 billion during the second quarter.
Ford earned $346 million in North America but had losses elsewhere in the world. The company also has higher depreciation on off-lease vehicles sitting on lots and expects the number of lease defaults to grow with an increasing number of people unable to work. Ford is offering six months of deferred payments for those who buy a new vehicle to try and offset some of the sales downturn.
Does Ford Have Enough Cash?
But the company does have cash. Ford said that it had about $30 billion in cash as of April 8, including the $15.4 billion it drew down from its credit lines in March, and it suspended its dividend on common stock. On April 17, Ford raised an additional $8 billion via a series of bond offerings, giving it more cash to weather the pandemic. On April 13, Stone said that $30 billion was enough cash for Ford to hold out at least through the third quarter. Ford’s financial results show the automaker burned through $2.2 billion in the quarter but Stone upgraded the cash outlook, saying said, “We believe the company’s cash is sufficient to take us through the end of the year, even with no additional vehicle wholesales or financing actions.”
In addition to lowering operating costs and reducing capital expenditures, Ford is also deferring portions of executive salaries.
“Who knew there was an off-switch,” Hackett said of the shutdown of the global auto industry.
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