Ford CEO: ‘We should have done much better’ in 2022

Ford president and CEO Jim Farley has said the firm “should have done much better” after it posted losses of $2.0 billion (£1.6bn) in 2022. “We left about $2bn in profits on the table that were within our control,” Farley said. On the firm’s Q4 earnings call, he added: “To say I am frustrated is an understatement because the year could have been so much more for us.” Ford attributed the overall loss to special items (one-off costs), including a $7.4bn (£6.0bn) net loss on its investment in EV start-up Rivian, which it has almost completed the “monetisation” (sale) of. The $2.7bn (£2.2bn) loss incurred by the collapse of Argo AI – which saw Ford lose $827 million (£676m) in the third quarter – was also a factor. Ford generated $158bn (£129bn) in revenue through the full year, including $44bn (£36bn) during the fourth quarter. The company attributed these results – which fell below its expectations – to execution problems amid supply chain and manufacturing instabilities (such as the semiconductor shortage). This increased costs and reduced production output, Ford said in a statement. Chief financial officer John Lawler said the firm will accelerate its cost-cutting efforts: it previously planned to slash $3bn (£2.5b) from its outgoings by the middle of the decade but will now reduce “a considerable amount more”. Lawler’s plans to make “very aggressive” cuts – “everything’s on the table” – come after German trade union IG Metall warned Ford will cut up to 3200 jobs in Europe as it shifts development work to the US. It has also been widely reported that Chinese giant BYD is in talks to buy the Ford Focus factory in Germany (at Saarlouis), which is due to end production of the hatchback in 2025. Ford of Europe head Stuart Rowley previously told journalists that “we don't have in our planning cycle an additional model that goes into Saarlouis”, hinting at the plant becoming a redundant asset. However, this does not mean Ford is abandoning Europe. It previously committed a $1bn (£817m) investment in its Cologne, Germany plant to ready it for production of electric vehicles. The Cologne-built Ford Fiesta was axed because the firm “needed the space in the factory”, according to Martin Sander, head of the Model E electrification division. Ford’s adjusted free cash flow for 2022 was $9.1bn (£7.5bn) and the firm ended the year with $32bn (£26.2bn) in cash and $48bn (£39.3bn) of liquidity. Lawler said: “We have great flexibility to invest in the Ford+ growth plan and return capital to shareholders at the same time.” From this year, Ford will be reorganised into three divisions: Ford Blue (combustion cars), Ford Model E (electric cars) and Ford Pro (commercial vehicles). Each will operate as an independent business under the Ford umbrella – “a fundamental change in how we think, make decisions and run the company,” according to Lawler. Ford will hold an event on 23 March to explain the new structure and financial reporting to investors, with recast financial statements for 2021 and 2022. “We’ll give investors great clarity about the role of each segment in our growth and profitability,” said Lawler.

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Ford CEO: ‘We should have done much better’ in 2022

American giant loses $2 billion amid supply shortages; Jim Farley says it left “profits on the table”

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Ford CEO: ‘We should have done much better’ in 2022

American giant loses $2 billion amid supply shortages; Jim Farley says it left “profits on the table”

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