In an effort to calm its investors, the second largest US automaker said it could still make money even if the auto market took a deep plunge.
Even if the auto sales in the United States are seen to further rise this year and to overpass the record figures reported by the industry in 2015, the market peek is very close to be reached, triggering worries among investors over the automakers’ earnings. Such concerns made Ford shares slightly drop this year, despite the fact that the company made record profits last year. Ford posted a 10.8-billion-dollar pretax profit for 2015 and all regions were in the green, except for South America, with new records in North America and Asia Pacific, while Europe returned cash for the first time since 2011.
This is an impressive achievement, considering the tough times Ford went through seven years ago, when it had to drastically reduce the costs by closing plants and cut many jobs. “We were in such bad shape back then,” Chief Financial Officer Bob Shanks told analysts this week at a meeting in New York. “We are a much different company now.” The company can stay profitable with a 30 percent drop in industrywide sales, or it could now break even financially if annual US auto sales fell by 37 percent, he said. “We would adjust production to fit demand and do that very, very quickly,” Shanks stated.