Ford Motor Co. (F) announced that the automotive industry is changing. The company didn’t take a bailout during the last financial disaster, and it posted record sales in the U.S. in recent years.
The company’s shares are down 1% in early morning trading.
Ford that it expects its financial performance to slump in 2017 due to an increase in expenditures on “emerging opportunities.” The company will be expanding its spending on self-driving cars and other costs.
Last week, the company lowered its pretax profit from $10.8 billion to $10.2 billion due to the company expanding a vehicle recall. Ford plans to offset future expenditures, but the company stated that there will be higher development and regulatory costs that are too high to offset
The company expects that expenditures will increase by 5.6% in 2018, up from 4.9% in 2016. It also expects these added capital expenditures to start to taper off after 2018.
An increase in expenditures will not harm its dividends, according to the company. Ford stated that the uptick in sales since 2008 – 2009 has come to an end, but it doesn’t expect the sales to fall dramatically like in the past.
Layoffs are expected to cost the company $500 million in 2017.
Ford has shifted to electric vehicles and is working on autonomous vehicles. The company expects to offer autonomous vehicles in the future, but ethical decisions will pose challenges. According to the CEO, there will be ethical decisions that arise with autonomy, such as which person to save if a crash is imminent.
An announcement from Ford also predicts that 20% of all U.S. sales will be from autonomous vehicles by the end of the next decade.
The company will also expand into robo-taxi industries and offer other car services that are able to change the way people are transported. Ford expects the company’s financials to be higher in 2018 despite an expected lull in 2017.
