Auto maker Ford will spend about $11 billion in its efforts to bringing in big changes to its core auto business in the years to come.
The company however did not provide much details of the planned change sin its business operations. But the development of self-driving cars has become one of the primary focuses for Ford and all of the other major automakers. The companies are also making plans and preparing for a time when people would more likely purchase rides instead of cars themselves.
Ford said that as it attempts to reorganize its business, reaching that stage would require the company to spend about $11 billion in the time period of the next three to five years.
“The team is making the hard decisions to raise the returns of underperforming assets,” said Chief Financial Officer Bob Shanks. “We will disposition the rest. This type of profound redesign will take time, and we will communicate as decisions are made.”
Requests to provide more details about its plans were turned down by Ford’s top executives in a conference call with analysts.
“I’d like nothing better than to give you visibility on how we may restructure,” said CEO Jim Hackett. “We can only share information publicly once decisions are made.”
He said that before more could be said by the company, it was necessary to consult with the various stakeholders of the company that include employees and suppliers.
Lack of information during a conference call for earnings was criticized by analysts which was unusual.
“You’re teasing the market with very large numbers. Your own people are going to read the newspaper and say, ‘What’s going on?'” said Adam Jonas, auto analyst for Morgan Stanley. “I really do hope you can reconsider the communication strategy. It’s not just good enough.”
For those employees of the company in its North American plants. there was some good news even though details were very limited. Essentially all of the profits of the company are being generated by that part of the company’s business as it is doing very well.
However, a drop in the earnings in the second quarter was announced by Ford – in line with other rivals including GM and Fiat Chrysler. The earnings outlook was also lowered by the company for the rest of the year. a fire at a North American supplier and lower sales in Europe and Asia were the causes of the lower guidance, Ford said.
“We’re extremely dissatisfied with our performance in Asia and Europe,” said Hackett.
It was a couple of days back that the creation of a separate unit within the company itself that would look to focus on self-driving vehicles was announced by the company. the company had also earlier announced that selling of traditional cars by it for the North American market would be stopped by it and announced that it was contemplating a potential strategic alliance with Volkswagen.
(Adapted from Money.CNN.com)