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This is what we felt in 2009. First, General Motors Co. and Fiat Chrysler Automobiles NV reported poor results, with both a drop in profits for the year. This triggered massive sales of their shares.
Then, it became really ugly. Ford Motor Co. has taken the lead and projected $ 11 billion of charges related to a restructuring plan that will take up to five years to materialize. The company that was already struggling to cut costs by $ 25.5 billion in the coming years has left analysts wanting more details and subjecting CEO Jim Hackett to tough questions.
Not since the financial crisis and Carpocalypse the automakers have had so much bad news in a day. To be clear, all companies are solidly profitable and are not on the verge of survival as in 2009. But what made the headlines all the more disconcerting is that the results and prospects have been at a time when the US auto market is buzzing and China buys more cars every month.
"Having a quarter like this is striking," said James Albertine, an auto equity analyst at Consumer Edge Research. "Whenever they return a rock, they encounter more problems."
GM's profit problems were mainly caused by external factors, notably steel and steel prices. President Donald Trump's aluminum and depressed currencies in Argentina and Brazil. Fiat Chrysler will have to settle the collapsed sales in China under the leadership of a CEO after the death of Sergio Marchionne announced Wednesday morning. Ford's problems stem from models of bloat and stal
Ford unfortunate Ford
Ford misses estimates by posting an adjusted profit of 27 cents per share, less than half of that that he was earning a year earlier. . The company based in Dearborn, Michigan, said it would make between $ 1.30 and $ 1.50 per share instead of $ 1.70. It lost $ 467 million in Asia and Europe in the second quarter.
In China, a source of reliable growth for many other major automakers, Ford sales dropped 25% in the first half. Beijing's retaliatory charges against the United States, which include higher taxes on cars, will cost between $ 200 million and $ 300 million this year, said Bob Shanks, chief financial officer of the company
. old and will be replaced at the end of this year and in 2019. Its dealers do not make adequate profits, burdened by an overabundance of sedan stocks and not enough SUVs.
Cagey call
the company has other deep structural problems. On his revenue call, analysts asked for more details about the costly and lengthy restructuring, and Hackett gave little clarity. The company also announced that it would postpone an investor meeting scheduled for September, stating it would be postponed for the time when she would have more details to share.
This sparked a tense exchange with Adam Jonas, an analyst at Morgan Stanley, who criticized Hackett. and Shanks for lack of communication. "I really hope you can reconsider the communication strategy, because it's not good enough, Bob," says Jonas.
The price dropped below $ 10 per share after trading hours, a level that it has not closed since 2012, when former CEO Alan Mulally was still restructuring the company
Jeep China struggles
Fiat Chrysler is not at Ford's mercy, but Mike Manley has a lot of problems. also. The famous Jeep brand has not yet made its way to China – a key part of the growth strategy presented just a few weeks ago.
The new Jeep Compass, which made a splash in the United States, has struggled Chinese brands are rising in the country's mass market segments.
As a result, the Asian business of the company lost 98 million euros ($ 115 million) in the second quarter. Its luxury Maserati brand also collapsed, as customers waited for a reduction in fees in July to take delivery of Levante SUVs. Shares quoted in the US by Fiat Chrysler have fallen by 12%, their worst one-day drop since June 2016.
Bad luck
GM tells more about a bad luck story. Trump 's steel and aluminum tariffs boosted metals prices and contributed to commodities, adding $ 300 million to quarterly costs and $ 500 million in the first half. The company was expecting this kind of adverse wind for the whole year. Instead, annual profits suffered losses of $ 1 billion
. The devalued Brazilian dollar and the Brazilian real lost $ 100 million and GM had to lower its adjusted earnings forecast to $ 6 per share. The company was expecting to earn up to $ 6.50
GM has new vans on sale next month, but they will not be available in substantial quantities until the fourth quarter. And as the Chinese market hardens, GM increases its luxury sales with Cadillac and its local brand Baojun wins the new middle class of the nation.
I do not want to hear it
Investors might not be interested in hearing the company arguing its case for a while, said analyst David Whiston Morningstar Inc.
"It was a very bad day," said Whiston. "There are a lot of factors beyond their control, in addition to all of this, we are at the top of the auto cycle and investors are just not interested."
Indeed, the actions of Ford "will be in purgatory for a while," said Albertine. Which was perhaps a sign of Wall Street's lassitude at the end of the day, the first speaker on Ford's call Wednesday night was Jonas, who asked if Hackett was waiting to be even at work once society is ready to "Yes, I expect to be in front of everyone saying where we are going and what we want to do," Hackett said. "There should be no questions around that."
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