DETROIT (AP) — Ford Motor Co.’s profit last year plunged by more than $3.6 billion, weighed down by slowing U.S. sales, the cost of a botched SUV launch and some big pension expenses.
The Dearborn, Michigan, automaker said it made $47 million in 2019, down from a $3.68 billion profit a year earlier. For the fourth quarter the company lost $1.7 billion, or 42 cents per share, hit by $2.2 billion in one-time pension costs.
Excluding one-time items, Ford made 12 cents per share for the quarter, falling short of Wall Street’s expectations. Analysts polled by FactSet predicted 17 cents per share.
Quarterly revenue fell 5% to $39.7 billion, about even with Wall Street estimates.
Shares of Ford, which released results after the markets closed Tuesday, tumbled 9.3% to $8.33 n extended trading.
Ford CEO Jim Hackett said on a conference call with analysts that the company fell short of its expectations for the year, and he blamed the drop primarily on the flubbed launch of the new Ford Explorer SUV at its factory in Chicago
New Explorers came off the assembly line with multiple problems and had to be shipped to a Detroit-area factory for repairs.
Hackett also referred to higher warranty costs during the year, especially for a flawed six-speed automatic transmission in the Ford Focus compact car.
He said the Explorer production is now fixed and the SUVs are selling well.
“Our leadership team is determined to return to world class levels of operational execution,” he said.
He said 2019 was a year of restructuring for the company as it downsized its white-collar workforce and shifted its products to higher-growth, higher-margin SUV and truck segments while exiting lower-growth sedans.
The company also announced that blue-collar workers represented by the United Auto Workers union will get profit-sharing checks of $6,600, based on North American pretax profits of just over $6.6 billion.