Ford Sits On A Massive Cash Reserve Of $37 Billion

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Ford is sitting on a massive stockpile of cash to the tune of $37 billion. The massive amount of cash and short-term assets means that Ford is one of the top ten companies in America for assets of the type. Despite having the massive stockpile, many on Wallstreet still consider Ford to be cash strapped.

Stock and bond analysts say the challenges that Ford faces over the next few years mean that the automaker needs to hold onto every penny it has. Near term challenges that analysts cite includes the multi-year restructuring in Europe and South America. Ford recently announced that it was going to buy an SUV from its Chinese joint venture partner Jiangling and sell it in South America.

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The other challenge that analysts see for the automaker in the near future is that it has overdue refreshes of key vehicles, such as the Ford F-150, expected as to get a refresh for the 2021 model year. Ford is also estimated to need an additional $11.5 billion to get its big electric push going. The Blue Oval has seven electric models due by the end of 2020, but its effort is seen as less ambitious than its peers.

The Blue Oval is due to refresh 75 percent of its North American lineup as measured by sales volume by the end of 2020. With all the new and refreshed models coming, analysts say that Ford needs to keep its balance sheet over $20 billion to cope with whatever recession might come. It has already seen its credit rating slashed on doubts that its turnaround process is working. When Moody’s downgraded Ford’s credit rating, the analyst wrote that it was restructuring from a weak position as cash flow and profit margins below expectations.

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Source: CNBC

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Written by Shane McGlaun

Shane is a car guy with a fondness for Mustangs and off-roading.

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9 Comments

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  1. I think you should build a 4 passenger T-Bird, look at the Camero, Charger just a couple from the past. I think if it were a family car like the 1962 etc.it would be a hit….

  2. Fords cash flow will get worse. Between the Focus and Fusion models it’s over 250,000 sales a year at the current rate. Dropping almost all passenger vehicles they stand to lose a lot of customers. Most of these buyers just want nothing to do CUV or SUV models.

    • And the Focus and Fusion were losing piles of cash selling 250,000 a year, while SUVs make way more money per unit. Yea, they really need to be making more cars. [eye roll]

    • absoluetly no, it is a fantstically brave move from Ford to dump low profit (or worse) products..some will say its a cardinal sin but ru the business with your head not your heart guys..well done.

  3. Wall Street will always nitpick and bring out the negitives….with Ford……who has had a hord of cash this decade…..then some how Cheer lead a company like Tesla….who has far more negatives..aprox 5 to 6 profitable quaters in 17 years…and will have Ford and ,GM and FCA….compeditors…who have more assembly plants….offer more trucks and suvs…..and more ..of a bench….unreal…

  4. It is ghastly to read so much negative posts about Ford’s finances, especially when none of the posters work at Ford or know the real numbers in their books. Too many “armchair analysts”!! Maybe “TS” rolled his eyes out of their sockets onto the floor, then stepped on them!

    As a long term Ford owner, their local dealerships have grown and sell many vehicles (my dealer is 60 years old) and have so many great offers now, so that part of Ford is strong. But Ford should keep the Fusion in production, especially the hybrid and Energi models, make it more sportier with a turbocharged V6, and finally offer a pure EV version.

    • I agree Ray, sales of passenger sedans are dropping but it just proves Everyone in the business needs a faster redesign, not just a refresh to keep sales on the up side. The current CEO convinced the board that cars must go. Sure you need growth and profit but it cost even more when you lose a customer because they went to Korea for a car.

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