Ford Says Thailand Floods Damaged Profits
Thailand flooding
AYUTTHAYA, THAILAND - Factories of the Rojuna Industrial district on November 14, 2011. Photo by Paula Bronstein/Getty Images
AYUTTHAYA, THAILAND - Factories of the Rojuna Industrial district on November 14, 2011. Photo by Paula Bronstein/Getty Images
Jan. 9 (Bloomberg) -- Alan Mulally, chief executive officer of Ford Motor Co., talks about the outlook for vehicle sales, hiring and market share growth. Mulally speaks from the North American International Auto Show in Detroit with Matt Miller on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Ford Motor Co. (F) said floods in Thailand caused a 2011 loss for its Asia Pacific and Africa region, preventing the automaker from achieving its goal to be profitable in all its global business units.
“The impact of the Thai floods is a bit bigger than we anticipated,” Ford Chief Financial Officer Lewis Booth told analysts yesterday in a presentation at the Detroit auto show. “We guided in the third quarter that all business units would be profitable for the full year. We now think that’s no longer possible because of the impact of the Thai floods.”
Chief Executive Officer Alan Mulally has said Ford global sales will increase 50 percent to 8 million vehicles by 2015 and one-third of its deliveries will be in the Asia by 2020. The second-largest U.S. automaker now has less than 3 percent of the Chinese market.
“This shows how globally interconnected Ford has become; it’s no longer just a North American, South American and European company,” said Michael Robinet, an analyst with auto consultant IHS Automotive in Northville, Michigan. “The impact from the Thai floods will be transitory and they’ll make it up over time.”
Ford’s Asia Plans
Ford is building seven factories and has 50 new models and engines coming to the Asian market by 2015, according to Joe Hinrichs, Ford’s chief of that region. Ford sales rose 7 percent in China last year, outpacing the 3 percent to 4 percent growth in total auto sales there, he said. Ford will open two factories in China by 2013 and introduce two sport-utility vehicle models there this year, Hinrichs said.
“We haven’t slowed our growth projections or our aspirations or intentions,” Hinrichs said in an interview this week. “This is an eight- or nine-year journey.”
Even with the impact of the Thai floods, Mulally said yesterday that Dearborn, Michigan-based Ford was solidly profitable in the fourth quarter, without providing a specific figure.
To contact the reporter on this story: Keith Naughton in Detroit at knaughton3@bloomberg.net
To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net
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