Ford’s lending arm generates half the automaker’s profit

Bloomberg

Aside from F-Series pickups hauling in gobs of profit, Ford Motor Co’s automotive business isn’t carrying much weight lately. Thank goodness for the finance guys.
Ford Credit, the lending arm that’s become accustomed to propping up the company in good times and bad, now generates about half the automaker’s profit, up from 15% to 20% in the past.
Ford Credit is designed to perform a relatively simple task: make loans to the dealers stocking vehicles, then the consumers who buy them. Now, Ford is relying on its finance unit to help fund multibillion-dollar outlays on electric and self-driving cars while it simultaneously racks up $11 billion in charges from a restructuring that could take years.
“It’s like the ballast that keeps the ship steady,” said Lawrence Orlowski, an analyst at S&P Global Ratings. “It’s a balancing act.”
Ford’s been selling fewer and fewer US vehicles for the last three years, and it’s losing billions overseas, including in China, where its annual vehicle deliveries fell by half during that time span.
On Tuesday, analysts expect the company to report lower fourth-quarter automotive revenue and a 44% plunge in adjusted net income. Profit on that basis could be the lowest since 2009.