Ford’s global profit takes a hit from Mexico, recalls and pensions

Ford has declared a US$4.6 billion (A$6.1b) global profit for 2016, down by $2.8 billion ($3.7b) from the previous year.

But it wasn’t all bad, with the company’s total annual revenue up $2.2 billion to $151.8 billion.

The reduced annual profit, compounded by an $800 million loss in the fourth quarter, was due to a combination of factors including the reassessment of staff pensions, a safety recall over a door hatch affecting 1.5 million cars and the costs associated with pulling out of its small-car factory in San Luis Potosi, Mexico.

However, it was still enough for 56,000 union workers in the US to receive a $9000 profit-sharing bonus, which is far cry from the days of the Global Financial Crisis when the company just managed to stave off bankruptcy.

Ford's earnings report lists a global market share of 7.6 percent, down a tenth from 2015.

Ford’s President and CEO Mark Fields (pictured) said 2016 was Ford's second-best ever year in terms of pre-tax company profits, driven by key regions like North America, Europe and Asia Pacific, which boosted the company's margins and topped profit and sales records.

In North America the company enjoyed a 7.3 percent market share on the back of strong pick-up truck sales and pre-tax profit of $9.4 billion.

Ford's European and Asia-Pacific markets posted their best and second best pre-tax profits respectively.

The company expects profit for its Asia Pacific market, which includes Australia, to “improve year over year, due to favourable volume and mix” particularly in China.

The South American, Middle East, and African markets all took hits because of unstable economies and other external factors.

Australia for some reason falls in the African market and while there were no specific numbers for Ford Australia in its final year of production, the company’s market share here was 6.9 per cent. Local sales were up 15.3 percent over 2015 with 81,207 cars sold.

Ford expects to have another reduced profit in 2017 as it invests in new and emerging markets and focuses more on its mobility projects.

“This year, we’re focused on building on our strengths, transforming underperforming parts of our business and investing in the emerging opportunities that will provide even more profitable growth in the future,” said Fields.

Meanwhile Fiat Chrysler Automobiles reported a net profit of $1.92 billion up from just $99.4 million in 2015.

The turnaround was due mostly to more profitable model mix helping arrest a dramatic sales decline in the North American market.

The result means 40,000 FCA union workers will receive a $5000 bonus.