Ford Motor said it lost $1.3 billion in 2020 as car sales slumped during the coronavirus pandemic and it incurred heavy costs for restructuring its overseas operations, complicating the company’s turnaround efforts.
The company, which was forced to stop making cars for about 60 days last spring to prevent the spread of the virus, reported $127 billion in revenue for the year, down from $156 billion in 2019, when it made a small profit.
Ford’s earnings were hurt by $5 billion in restructuring charges it incurred in the fourth quarter. Last month the company planned to close its plants in Brazil in a bid to halt losses in South America. It is also losing money in China and trying to improve profitability in Europe.
The automaker said it expected business to improve this year as the economy recovers and the pandemic wanes. The company said it would substantially increase the money it plans to spend to develop electric and autonomous vehicles over the next several years. The company now plans to spend $22 billion over the 10-year period ending in 2025. It previously planned to spend $11.5 billion in period ending in 2022.
But the company’s recovery faces a big challenge. Ford said that a global shortage of computer chips that has forced it and other automakers to slow production around the world could depress this year’s pretax profit by $1 billion to $2.5 billion.
“The semiconductor situation is changing constantly, so it’s premature to try to size what availability will mean for our full-year performance,” Ford’s chief financial officer, John Lawler, said in a statement. “Right now, estimates from suppliers could suggest losing 10 percent to 20 percent of our planned first-quarter production.”
Earlier on Thursday, Ford said it would slow production of its best-selling F-150 pickup truck at two plants because of the shortage of semiconductors. The company will operate just one shift at a Dearborn, Mich., plant for one week beginning Feb. 8, instead of the usual three shifts. A plant near Kansas City, Mo., will go to two shifts instead of three.
Ford relies on the F-150 for a big chunk of its profits. Its F-series trucks are the top-selling vehicle line in the United States.
On Wednesday, General Motors said that it would idle three North American plants next week because of the chip shortage.
Semiconductors for automotive components such as engine and transmission controllers are in short supply because manufacturers cut output of automotive chips last spring when the auto industry shut down plants, and have not been able to restore that production fast enough to keep up with a recent increase in car sales.
