Ford shares drop below $9 for the first time since 2012
Ford shares are taking a pounding as the automaker adopts a piecemeal approach to outlining cost cuts that are part of a years-long and costly restructuring.
Automotive News | October 9, 2018 – 3:32 pm EST
DETROIT — Ford Motor Co. shares are taking a pounding as the automaker adopts a piecemeal approach to outlining cost cuts that are part of a years-long and costly restructuring.
Ford shares fell 3.35 percent, or 31 cents, to close at $8.95 on Tuesday and dropped below $9 for the first time since August 2012.
Ford said Monday that it’ll shake up its global marketing operations, in part by transferring advertising business away from longtime partner WPP Plc, but the automaker is expecting to save just $150 million annually. That pales in comparison to the $11 billion in charges that Ford has warned its restructuring could lead to over the next three to five years.
While the automaker told its 70,000 salaried employees last week that they face unspecified job cuts, Ford didn’t quantify how big it anticipates the reduction will be. The company also didn’t address whether it planned involuntary separations or estimate the financial impact.
Moody’s Investor Service cut Ford’s credit rating in August to one notch above junk on concerns about executing its overhaul. Ford is facing headwinds including cratering demand for sedans in North America — a segment that it’s exiting — costlier emissions rules in Europe and a stale product line in Asia.
CEO Jim Hackett also told Bloomberg News last month that President Donald Trump’s tariffs on imported metals will cost Ford about $1 billion in profit.