Ford Motor Co. reportedly is considering closing some British factories after predicting Brexit will deliver a $1 billion hit to business during the next two years.
The U.S. auto maker, which is the biggest car brand in the UK, will also raise the price of cars sold in Britain before the end of the year, the Financial Times reported.
Ford Chief Financial Officer Bob Shanks said a weaker British pound following the June 23 Brexit vote had cost the company about $60 million in the second quarter.
The 2016 impact of Brexit on Ford, which has 30 percent of its European sales in Britain, was expected to be $200 million, and each year until Britain leaves the EU would cost it $400 million to $500 million.
Shanks said all options were on the table for cost cuts in Europe, although the Detroit-based auto maker wasn't ready to announce any plant shutdowns, Reuters reported. “There’s no question that there will be price increases,” said Shanks. He indicated the company would move first “as the market leader” and he would expect rises “this year.”
Earnings excluding one-time costs were 52 cents a share, the company said in a statement. The average of 17 estimates was 60 cents. Automotive revenue rose 5.1 percent to $36.9 billion. The average analyst estimate was $36.3 billion. North American pretax income was $2.7 billion, down from $2.84 billion a year earlier. Ford’s U.S. sales climbed 4.6 percent in the first six months to 1.35 million cars and trucks, its best first half in 10 years. Europe pretax profit was $467 million, up from $161 million. Ford’s European sales rose 7.5 percent in the first half to 718,700 vehicles, the biggest gain since 2010.
Analysts have warned that some carmakers would be forced to close plants in the U.K. if it faces trade barriers with the rest of Europe after Brexit, the Times reported.
Ford has closed all its remaining U.K. plants in the past five years, in addition to one in Belgium with the loss of 5,700 jobs, the FT reported. Ford’s two remaining U.K. plants are at Bridgend and Dagenham, making engines that are exported to other EU countries for final assembly.
A month after the referendum, the latest signs of an economic slowdown are likely to fuel expectations of action by the Bank of England on Aug. 4, when many economists believe it will cut interest rates and might start buying bonds again to pump money into the financial system.
"The public are still absorbing the EU referendum result but it is clear that consumer confidence has taken a significant and clear dive," Stephen Harmston of the YouGov polling organization, told Reuters.
The Brexit woes also put Ford’s nascent recovery in Europe at risk. General Motors Co. said last week that so-called Brexit could cost it $400 million in the second half. The U.K.’s decision affects both demand and currency costs, Chief Executive Officer Mark Fields said on Bloomberg Television.
“We’re going to look at what the world throws at us and we’re going to act decisively on it,” Fields told analysts on a conference call. “We’re going to have to see how Brexit plays out, but it will just provide more motivation for the team in terms of keeping us competitive.”
Ford’s profit warning reflects broader industry softening as well as the company’s bet on fuel efficiency, Adam Jonas, an analyst at Morgan Stanley, wrote in a note entitled “Ford’s Profits Warning an Industry Watershed?”
“The U.S. auto market is probably leveling out,” said David Whiston, an analyst for Morningstar Inc. in Chicago, who rates Ford the equivalent of a buy. “The risk is when does all that all come crashing down. I’m not worried about it being imminent,” he told Bloomberg.
(Newsmax wire services contributed to this report).
© 2026 Newsmax Finance. All rights reserved.