Economy, Auto

Ford Gives Disappointing 2018 Outlook

To boost revenue Ford wants to develop more trucks and sport utility vehicles.To boost revenue Ford wants to develop more trucks and sport utility vehicles.

Ford Motor Co has estimated financial results for 2017 and 2018 that fell short of investor expectations, in a downbeat forecast that contrasted with a more positive outlook from rival automaker General Motors Co.

Ford Chief Financial Officer Bob Shanks told analysts at an investor conference in Detroit that higher costs for steel, aluminum and other metals, as well as currency volatility, could cost the company $1.6 billion in 2018. Cost-cutting actions are under way and will have the biggest impact “in 2020 and later,” Reuters quoted Shanks as saying.

Ford’s president of global markets, Jim Farley, said the company’s business structure was “out of sync with our revenue,” and vowed to cut costs by sharply reducing the variants of high-volume Ford models and slashing marketing costs by $200 million a year.

To boost revenue, Farley said Ford would decrease its passenger-car models and develop more trucks and sport utility vehicles aiming at profitable niches such as rugged off-road models.

Ford shares dropped more than 2% in extended trading after the release of the forecast, but later recovered most of the losses. Ford said it would pay shareholders an extra dividend of $500 million, or 13 cents a share, for the first quarter.

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