Ford pulls guidance, warns it will take $1.5bn hit from Trump's tariffs
Ford Motor suspended its annual guidance on Monday due to uncertainty about US President Donald Trump's tariffs, saying the levies would cost the company about $1.5bn (R27,417,600,000) in adjusted earnings before interest and taxes.
'It's still too early to fully understand our competitors' responses to these tariffs,' Ford CEO Jim Farley told analysts on Monday evening. 'It's clear, however, that in this new environment, carmakers with the largest US footprint will have a big advantage.'
Ford reported this after the close of the US stock trading session, and its shares fell about 2.3% in after-hours trade.
The tariffs are expected to add $2.5bn (R45,700,998,500) in costs overall for the year, mainly related to expenses from importing vehicles from Mexico and China, Ford executives said. The carmaker suspended automotive exports to China, but still imports vehicles such as its Lincoln Nautilus from the country.
Company executives said it has been able to reduce about $1bn (R18,280,400,000) of that cost through various actions, including transporting vehicles from Mexico to Canada using bond carriers, so they are not subject to US tariffs.
In February, the Dearborn, Michigan carmaker projected earnings before interest and taxes of $7bn (R127,962,800,000) to $8.5bn (R155,379,986,400) for 2025. That forecast did not take tariffs into account.
The carmaker's CFO Sherry House said it was on track to meet that guidance, excluding the fallout from tariffs.
While rivals such as General Motors recently provided updated guidance, Ford executives said they have suspended the company's outlook until they have more clarity about the effect of retaliatory tariffs, as well as how consumers may react to price increases.
'It's a bold move for them to withdraw guidance when GM gave revised guidance including tariffs, though to be fair things are very uncertain,' said Morningstar research analyst David Whiston.
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