Ford is laying off hundreds of workers after posting a $3.1 billion loss– and it’s blaming that loss on its stake in electric truck startup, Rivian.
It’s important to note here that Ford’s core business of building and selling cars is going just fine, thanks. So fine, in fact, that the $3.1B hit is closer to a “blip” than a “catastrophe” for the Blue Oval brand. A blip that Ford has attributed to a steady decline in the stock price of Rivian (NASDAQ: RIVN), which Ford owns a nice chunk of.
Automotive News (sub.) posted more details:
Ford was profitable before accounting for the Rivian investment, though adjusted earnings fell 41 percent from a year earlier to $2.3 billion before interest and taxes. Its adjusted profit margin was 6.7 percent, down 4.1 percentage points.
Executives on Wednesday declined to comment on Ford’s plans for the Rivian holding, although CEO Jim Farley told Automotive News late last year that Ford “loved its future as a company.” Ford can not sell any of its roughly 12 percent stake in the EV startup until a lock-up period for pre-IPO investors ends next month.
Ford said the industry’s ongoing microchip shortage hampered company production in January and February but that March output was higher. Its wholesale shipments fell 9 percent in the quarter to about 970,000.
“The capability of this business is much stronger than what we were able to provide in the quarter,” CFO John Lawler told reporters.
Ford also said it was eliminating as many as 350 salaried and 230 agency positions on US engineering teams, according to a spokeswoman– which may have come as something of a surprise to many Ford workers, coming as it did not too long after Ford announced plans to invest $11 billion in new factory expansions and jobs. Ford alerted affected employees earlier yesterday.
SOURCE | IMAGES: AUTOMOTIVE NEWS.
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