Ford says 2017 performance will fall from 2016 levels as costs rise
By Bernie Woodall and David Shepardson
(Reuters) - Ford Motor Co's 2017 financial performance will decline from this year as it increases spending on "emerging opportunities" like self-driving cars and other costs rise, the No. 2 U.S.-based automaker said on Wednesday.
Ford, like most of its chief rivals, is seeking ways to profit as the industry moves toward self-driving vehicles and ride-sharing. The company is taking a cautious path on this course, its chief executive, Mark Fields, indicated in an interview with Reuters on Tuesday.
Ford stock fell 1.9 percent to close at $12.14.
Also, Ford Chief Executive Officer Mark Fields said all of the company's small-car production will be leaving U.S. plants and heading to lower-cost Mexico over the next two to three years.
Last week, Ford lowered its 2016 pretax profit forecast to $10.2 billion from at least $10.8 billion because of a charge in the third quarter for an expanded vehicle recall.
Ford said it "plans to achieve cost efficiencies averaging $3 billion annually between 2016 and 2018 and is adding new processes like zero-base budgeting to further its business transformation."
This will "offset the vast majority of costs being added to strengthen Ford’s business," but will not be enough to offset higher regulatory and vehicle development costs for what it calls emerging opportunities, such as electric vehicles.
Ford disclosed its outlook ahead of presentations later in the day to Wall Street analysts at its headquarters in Dearborn, Michigan. Continued...