DETROIT - Ford Motor Co. is facing its biggest test since Chief Executive Officer Alan Mulally charted its successful course out of the recession.
The company outlined its challenges to Wall Street on Wednesday, telling analysts assembled in New York that profits will slow next year, largely because its North American cash machine is facing intense price competition and higher costs attributed to new model rollouts.
The admissions sent Ford’s stock tumbling 6.3 percent Wednesday, the largest one day decline since August of 2011. The shares have now dropped 12 percent since late October, partly because of stories about Mulally possibly leaving for Microsoft.
Ford was near collapse in 2006 when it hired Mulally. The company borrowed $23.6 billion to make it through the recession and finance a restructuring. It shed unprofitable brands, closed plants and invested in new cars and trucks that are sold worldwide. Now it’s making billions.
Ford predicted a pretax profit of $8.5 billion for this year, among the largest in company history. But ultimately, the discussion with analysts Wednesday raised questions about whether the U.S. auto industry could be headed for a period of slower growth in sales and profits.
Bob Shanks, Ford’s CEO, told the group that pretax profits next year could fall as much as $1.5 billion below 2013. The news sent Ford’s stock down $1.05 to close at $15.67.
Business, Pages 27 on 12/19/2013