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Costly 2014 lays groundwork for better 2015 for Ford Motor Company

Jan 29, 2015

Ford's Truck plant had to be shut down for eight weeks in 2014 to prepare for the new aluminum-bodied pickup. That's one of the reason Ford's costs rose last year.
Credit Tracy Samilton / Michigan Radio

Ford Motor Company's earnings last year totaled $3.2 billion, a big drop from 2013, when the company made $6.2 billion.

But Ford executives say much of the decline is due to a record 24 new vehicle launches last year.  

"Certainly we have more costs associated with those product launches," says Chief Financial Officer Bob Shanks. "(But) they were going to set us up for a much stronger 2015 and that's exactly where we find ourselves today."

Shanks expects 2015 to show greatly improved profits, market share, and profit margins.

He says another big accomplishment last year was keeping its global pension plans at the same underfunded level – $9 billion – despite significantly lower discount rates.  Shanks says it shows Ford's strategy is working.

Ford also lost a large sum of money in Venezuela, due to that country's currency turmoil and regulatory environment.

So, Shanks says Ford is taking steps to insulate itself from what's going on there so "what happens in Venezuela, stays in Venezuela. It won't affect our results."

Shanks says Ford is also increasing its capacity to produce vehicles in China, and that will make 2015 a stronger year than 2014 as well.

He says one thing in particular for 2015 will be unusual. Generally, Ford makes more money in the first half of the year than the second half. In large part because of the cadence of product launches, Shanks expects the second half to be stronger than the first in 2015.