According to one JPMorgan analyst, Ford Motor Company could stop doing business in certain South American markets in an effort to cut its losses in the region and improve its financial fitness. Bloomberg reports that JPMorgan auto analyst Ryan Brinkman met with Ford CFO Bob Shanks and President of Global Markets Jim Farley this week, and shortly after, penned a letter to investors in which he suggested that the automaker could make an exit from some countries in the region.
“Ford seems to be working on an out-of-the-box transformational plan to stanch what it deems as unacceptable losses in South America, which we suspect could be announced over the short-term,” the letter read in part. Brinkman says Ford could decide to work more closely with other automakers, “perhaps even via some sort of formal tie-up,” although fixing its poor financial performance in South America “could also entail selective exits from certain markets.”
Ford lost $587 million in South America through the first nine months of 2017, according to Bloomberg, and even that is an improvement over 2016, thanks to more favorable pricing and stronger sales. Brinkman says that industry-wide, most of the recovery in South America comes from low-margin fleet sales.
In an email to Bloomberg, Ford said that South America is important to its business operations, and the automaker will work to make its business there “operationally fit.”