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Ford says big changes will cost it $11 billion

Ford says big changes will cost it $11 billion
Posted at 5:09 PM, Jul 25, 2018
and last updated 2018-07-25 17:09:26-04

Ford says it is planning big changes to its core auto business in the coming years, and it will spend big bucks -- $11 billion -- to get there.

The company didn't give a lot of details about the changes it has planned. But Ford and all the major automakers have already been busy trying to develop self-driving cars, and they're planning for a day when customers are more likely to buy rides than autos themselves.

Ford said all that could cost it $11 billion over the next three to five years as it seeks to reshape the business.

"The team is making the hard decisions to raise the returns of underperforming assets," said Chief Financial Officer Bob Shanks. "We will disposition the rest. This type of profound redesign will take time, and we will communicate as decisions are made."

As with rivals GM and Fiat Chrysler, Ford also reported a drop in second-quarter earnings. It also reduced its earnings outlook for the rest of the year. Ford attributed the lower guidance to lower sales in Europe and Asia, and problems at a North American supplier.

On Tuesday, Ford announced it was forming a separate unit within the company to focus on autonomous driving vehicle. It had previously announced it will stop selling traditional sedans in North America and it is exploring a possible strategic alliance with Volkswagen.

Shares of Ford fell 2% in after-hours trading.