Friday, 29 July 2022 09:25

Ford Triples Adjusted Earnings in Second Quarter, Reports $3.7B

Written by Phoebe Wall Howard, Detroit Free Press


...already taking cost-cutting measures.


GM reported a second-quarter net income of $1.7 billion compared with $2.8 billion in the year-ago period. GM saw continued strong demand for big pickups and large SUVs, which carry wide profit margins. GM's net revenue for the quarter rose to $35.8 billion compared with $34.2 billion a year ago.


In recent days, Farley didn't deny a Bloomberg report that the company planned to cut as many as 8,000 jobs. Cuts have been deemed necessary for the long-term viability of the company.


In March, the company announced it needed to slash $3 billion over the next two or three years from its gas-powered operation and redirect money to its battery electric vehicle development and technology. These cuts are part of a restructuring plan designed to make the firm more competitive, creating separate units within the company called Ford Pro for business customers, Ford Blue for gas-powered vehicles and Model e for electrification.


The challenge, of course, is that traditional gas-powered vehicles---especially pickup trucks---generate significant revenue needed to pay for future development.


Farley told analysts during the earnings call that cost reduction comes primarily in the Ford Blue part of the business simply because that's where the majority of people work. But cuts will not be indiscriminate, as they may have been in the past, but more strategic as the company and its needs evolve, Farley said.


Ford will comment on its actions on its own schedule, he said during introductory remarks to industry analysts.


Adam Jonas, a veteran industry analyst at Morgan Stanley, said to Farley during the earnings call, "This is one of the most positive Ford calls I can remember in a long time. Does Ford have too many people?"


Farley responded, "We absolutely have too many people in certain places, no doubt about it. We have skills that don't work anymore. And we have jobs that need to change. ... We know our costs are not competitive."  


During this period of transition, the company has seen longtime members of the management team leave, including Hau Thai-Tang and Frederiek Toney, while recruiting new talent from Silicon Valley to focus on key priorities, including Doug FieldAlan ClarkeAnnie Liu and Jennifer Waldo.


We thank the Detroit Free Press for reprint permission.


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