Ford closed down almost 7.5% on Monday.
The bloodletting was swift: the company basically fell off a cliff at about 3 p.m.
The stock closed at $US15, after ending Friday at $US16.
Concerns about Ford’s losses in Europe and South America appeared to drive the selloff. Bloomberg reported that Ford expects to lose a combined $US2.2 in both markets this year.
It was a rough day for Ford’s new CEO, Mark Fields, who took over at the Blue Oval in July.
It’s the magnitude of the predicted losses in Europe that are eye-catching. In the second quarter, Ford reported a slight profit in Europe, after failing to make any money there since 2011. The European situation hasn’t exactly been good, but investors on Monday were taken aback by how feeble the prospects for improvement are.
The impending losses were annouced at a Ford investor conference on Monday, along with the news that Ford will reduce the total number of so-called “platforms” on which it builds its vehicles to 9 from the current 15.
That’s a significant reduction for an automaker that offers vehicles in a wide variety of segments, from compact cars to full-size pickup trucks. But Ford has been executing this reduction for several years, as part of the “One Ford” strategy that former CEO Alan Mulally introduced when he took the helm at the company before the financial crisis.
On Monday, the company also announced a recall of 850,000 vehicles for an electrical issue that could affect airbags. The recall could cost the automaker $US500 million in 2014, the Detroit News reported.
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