Ford Motor Co. said Thursday its second-quarter earnings fell 9 percent to $ 1.97 billion and warned of a “very weak third quarter,” as US demand softens and the automaker launched its redesigned versions of heavy trucks.
Ford Motor Chief Financial Officer Bob Shanks said “all options are on the table” for cost cuts in Europe because of Britain’s vote to leave the EU but said the company is not ready to announce any plant shutdowns in the UK. Shanks said the Brexit vote cost the company $60 million in the second quarter due to the falling value of the British pound. Ford expects Brexit will cost the automaker about $200 million this year, growing to $400 million to $500 million next year, Shanks said. That puts Ford’s nascent recovery in Europe at risk.
Ford CEO Mark Fields said on Bloomberg Television that Brexit affects both demand and currency costs Ford does not produce any vehicles in the UK but it builds about 1.6 million engines made in Dagenham near London and in Bridgend in Wales. Despite the Brexit hit Ford’s second-quarter European profit nearly tripled to $467 million, the company said on Thursday.
Even with the decline, Ford achieved record net income and margin for a half-year period. But executives said the company was at risk of falling short of its full-year targets and was undertaking a series of “profit improvement actions” including cuts to manufacturing costs, without being specific.