Ford shares dropped 3.3 percent on Tuesday close, weeks after it announced it is cutting jobs worldwide and barely a month after CEO James Hackett warned that ongoing tariffs are set to cut the automaker's profit by $1 billion.
Bloomberg reported that Ford shares closed below $9 on Oct. 9, down 28 percent this year. This was the first time since August 2012 that the shares dropped to that level according to Bloomberg.
The slump happened a week after Ford confirmed its decision to cut its salaried workforce. The automaker has yet to announce the exact numbers of employees that will be out of the job. To date, it has 85,000 employees in the United States and 201,000 employees across North America, Europe, Asia, and South America. The automaker has an estimated 70,000 salaried workers in total.
Ford's ordeal has seemingly unfolded since U.S. President Donald Trump assumed office and went ahead with his tariffs plans.
In September, Hackett said the steel and aluminum tariffs currently in place would cost Ford about $1 billion in profits. The CEO highlighted that it was ironic since they sourced their metals from the United States, but still, the company bleeds the impact of the levies. He added that if tariffs continued, the damage to the company would get worse.
While Ford can look forward positively with the revised North American Free Trade Agreement to be signed in November, there are more problems ahead.
On May 23, Trump instructed officials to see on whether they could impose additional 25 percent tariff on vehicles and auto parts imported from the European Union. While the car industry waits if this levy will take effect, Trump launched a trade war with China.
Aside from tariffs, Ford also needed to face the challenge of the shifting customers' interest towards SUVs and pickups from sedans and wagons. The carmaker would have to eliminate its popular models and take the risk of introducing bigger models.
Ford sales in China have also been struggling faced with tough competitions with General Motors and Volkswagen.
With all these difficulties, Ford may have to make more difficult decisions moving forward. A key shift would be in reorganization, Chief Financial Officer Bob Shank told NBC News. Instead of making drastic changes with the production, the company saw it more fitting to adjust strategies.
As part of new strategies, Ford may partner more with different companies like Mahindra in India and Volkswagen in Germany, Shanks added. It will also open its doors to more collaboration with tech companies like China's Baidu and Silicon Valley's Amazon.
