Wow, Ford is in good shape, despite that loss
Ford lost $2 billion in the first quarter of 2020—not surprising given the sudden shutdowns of economies around the globe. But Ford is able to weather the storm, including an expected $5 billion loss in the second quarter, and possible losses in the last half of 2020: they had $34 billion in cash, and $35 billion in liquidity, at the end of March 2020. At the same time, Ford is cutting marketing and advertising costs, and trying to defer other costs.
Some believe that Ford will be taking a serious look at the nature of its operations outside North America. Ford is popular in Europe, but Volkswagen absolutely dominates the continent, followed by French automakers. Talk of a merger comes partly because Volkswagen dominates Europe as Ford dominates America’s pickup and commercial-van markets, but the founding Ford family is still a major force; and Volkswagen is one of the world’s largest automakers, with no need to merge when they can slowly make inroads in the U.S. and Canada.
To a large degree, Ford has enviable numbers: the average transaction price of a Ford-branded car is over $43,311, and the average transaction price of a Lincoln is $58,503. Buyers are paying nearly $90,000 for Navigators. The company isn’t selling all that many cars and trucks, but they’re getting premium prices for what they do sell.
Compare Ford with FCA: Ford has two brands in the world, Ford and Lincoln, while FCA has Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Maserati, and Ram, all of which need to be fed with product and marketing. Ford focuses on a small number of segments, while Fiat Chrysler relies on niche vehicles, especially for Jeep, and has three brands which are geofenced.
General Motors and FCA will be reporting earnings soon; chances are both will have substantial losses, just like Ford, but do they have the cash and credit to make it through?hello