The economy may be humming, but for American car companies, the year is looking less bright.
All of Detroit’s Big 3 automakers issued downward revisions on Wednesday in their financial forecasts for the year, with each highlighting rising commodities costs that stem in part from the steel and aluminum tariffs imposed by the Trump administration. The adjustments, made as the companies announced their second-quarter earnings, sent their shares down sharply.
Ford Motor recorded the worst showing of the three, as net income fell by nearly half to $1.1 billion from the same period ago. Aside from higher materials costs, Ford is struggling in Europe, South America and especially China, where it has spent heavily in recent years to expand but made just $3 million in the quarter and has watched its sales fall.
“The deterioration in this important global market has been swift,” Jim Farley, Ford executive vice president and president of global markets, said in a conference call. He said Ford’s joint ventures in China suffered from uncompetitive costs, weak dealer networks and a shortage of sport-utility vehicles in its model line. Ford is now “taking urgent action,” although its troubles will linger, he said.
