Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Ford to Take $350 Million Charge on Venezuela Devaluation

April 1 (Bloomberg) -- Ford Motor Co., which warned in December about volatility in its Venezuelan operations, will take a charge of about $350 million in the first quarter for a change in how it values the South American nation’s currency.

Ford is now using an exchange rate of 10.8 bolivars to the U.S. dollar, compared with the 6.3 rate it used previously, the Dearborn, Michigan-based company said today in a filing with the U.S. Securities and Exchange Commission.

The automaker said in January it was cutting production in Venezuela because the country faced a shortage of hard currency. Ford said it reduced output there by 75 percent in the fourth quarter and planned to keep it at that lower rate this year as Venezuelan car sales plunge.

The availability of U.S. dollars “is crimping our ability to pay suppliers,” Mark Fields, Ford’s chief operating officer, said Jan. 14 in Detroit. “We’ve taken our production down.”

Ford’s currency move follows a warning it gave in December that it was assuming a “major” devaluation in the bolivar.

“Recent government actions in Venezuela, including price controls and a very limited and uneven supply of foreign currency to support production, have affected production adversely as well as the business and overall results in the region,” Bob Shanks, Ford’s chief financial officer, said in December. “The environment in Venezuela is volatile and increasingly difficult and unpredictable for business.”

To contact the reporter on this story: Keith Naughton in Detroit at knaughton3@bloomberg.net

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net Stephen West, Ben Livesey

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.