Ford (NYSE: F)’s Chief Executive Officer says the auto maker still has work to do to be a truly "fit" company.
The second-largest automaker said it is not yet fit enough to offset headwinds from higher commodity prices, which the company expects to continue to affect finances in 2018.
"Ford is a strong company," Jim Hackett said on a conference call Wednesday, after the company released earnings for the fourth quarter and full year of 2017. "I am proud of it, but we have not done enough to be fit today."
In particular, it is less fit than its peers, who have said they are not feeling the same pressure from commodity prices.
Higher commodities and unfavorable foreign exchange rates have hindered Ford in recent quarters. The company is attempting a turnaround under Hackett, who was appointed CEO in early 2017.
Ford spends about $10 billion in commodities annually, and about two-thirds of that goes to steel and aluminum. The company benefited from falling prices in 2015 and 2016. But the market began to turn in late 2016 and prices are expected to continue their climb through 2018.
Ford expects revenues in 2018 to be flat or modestly higher over 2017, and is expecting flat to lower profits from its automotive business. It is also expecting lower profits from its Ford Credit business.
At the same time, Ford plans to spend about $7.5 billion in capital in 2018.
Ford shares gave back 24 cents, or nearly 2%, shortly after Thursday’s opening bell to $11.81.
