Wall Street Reacts to Ford's Earnings Miss Amid Auto Industry Downturn

DETROIT – Ford Motor Company's shares plummeted over 18% last week, reminiscent of the Great Recession when the U.S. automotive industry faced bankruptcy. Although Ford is not in a crisis, the significant drop in stock value highlights the challenges automakers are grappling with as they navigate a cyclical downturn. Rising inventories and declining vehicle prices are contributing to a tough environment for Detroit's automakers, with General Motors (GM) also experiencing an 8.7% decline in shares. GM has projected its adjusted earnings for the second half of the year to range between $4.7 billion and $6.7 billion, translating to $3.82 to $4.82 per share. The company anticipates a 1% to 1.5% decrease in vehicle pricing and an additional $1 billion in expenses, which includes $400 million earmarked for marketing to support new vehicle launches. This forecast underscores the financial pressures facing the industry. Ford, on the other hand, expects its adjusted earnings for the latter half of the year to fall between $2 billion and $3 billion, a stark decline from $5.5 billion in the first half. Despite these challenges, Ford's leadership remains optimistic about its product portfolio and cash generation capabilities, aiming to reward shareholders. Stellantis, the trans-Atlantic automaker, faces the steepest hurdles, particularly in the U.S. market, where it was the only major automaker to report a sales decline last year. With a 16% drop in U.S. sales during the first half of this year, Stellantis is navigating a difficult landscape as it strives to improve its performance.