Ford Motor Co. is planning to cut its spending by nearly $11.5 billion. To achieve this cost reduction target, the company is considering to drop several of its sedans including Taurus and Fusion from its manufacturing lineup. By doing so, the automobile maker aims to hit its profit target for the year.
On Wednesday, Ford’s CFO, Mr. Bob Shanks said that by 2022 the company expects to save approximately $25.5 billion in costs. Moreover, the company also revealed that its first-quarter earnings were well above expectations.
Ford Motor now aims to reach 8 percent profit margin by 2020. Last year, Ford Motor’s fired its CEO, Jim Hackett. Hence, the new Chief Executive Officer of Ford aims to revamp the company.
He has been convincing investors by halting the manufacturing of slow-moving and low margin cars. He wants the company to focus more on SUV’s and trucks.
In a call on Wednesday, the new CEO said that he aims to focus more on the healthy side of the business rather than feeding the areas that destroys the company’s values.
The company reported its first-quarter adjusted earnings at 43 cents per share. However, analysts had expected it to be 41 cents per share.
In recent surveys, the company’s automotive revenue increased to $39 billion which exceeded analysts expectations of $37.2 billion. Further, Hackett stated that the company would lose investment in the Asia Pacific region, but will revert to the second half of 2018.
After the close of regular trading on Wednesday, Ford’s shares increase by nearly 3.2 percent. Stocks had previously declined by 11 percent before the earnings report was published.