FORD MOTOR COMPANY (NYSE:F) Files An 8-K Regulation FD Disclosure
Item 7.01. Regulation FD Disclosure.
Field Service Action. Ford Motor Company is announcing today a field service action to correct a suspension issue in certain model year 2011 through 2017 Explorer vehicles. The cost of the action, which will be incurred by our North America business unit, is estimated to be $180 million. The expense will be reflected in our second quarter 2019 results. For the full year, we continue to expect Company adjusted EBIT to be higher than in 2018. Please see our Quarterly Report on Form 10-Q for the period ended March 31, 2019 for additional information concerning our guidance, and the attached Cautionary Note on Forward-Looking Statements for a list of items that could cause our actual results to be different than our guidance.
Transit Connect Customs Ruling>(as previously reported on page 23 of our 2018 Form 10-K Report). On March 8, 2013, U.S. Customs and Border Protection (“CBP”) ruled that Transit Connects imported as passenger wagons and later converted into cargo vans are subject to the 25% duty applicable to cargo vehicles, rather than the 2.5% duty applicable to passenger vehicles. As a result of the ruling, CBP is requiring Ford to pay the 25% duty upon importation of Transit Connects that will be converted to cargo vehicles, and is seeking the difference in duty rates for prior imports. Our protest of the ruling within CBP was denied, and we filed a challenge in the U.S. Court of International Trade (“CIT”). On August 9, 2017, the CIT ruled in our favor. On October 6, 2017, CBP filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit, and on June 7, 2019, a panel of three Federal Circuit judges ruled in favor of CBP. We are evaluating our options following the most recent ruling. If we ultimately receive a favorable ruling, we will receive a refund of the contested amounts paid and we will treat the refund as a special item. Similarly, if we are required to pay the higher rate for prior imports, the payment will be treated as a special item. Accordingly, the Company adjusted EBIT guidance provided above is not affected by either a refund or a payment related to this matter.
About FORD MOTOR COMPANY (NYSE:F)
Ford Motor Company (Ford) is a global automotive and mobility company. The Company’s principal business includes designing, manufacturing, marketing, financing, and servicing a line of Ford cars, trucks, sports utility vehicles (SUVs), and electrified vehicles, as well as Lincoln luxury vehicles. The Company operates in two sectors: Automotive and Financial Services. The Automotive sector includes North America, South America, Europe, Middle East & Africa, and Asia Pacific segments. Its Financial Services sector includes Ford Credit and Other Financial Services segments. Its vehicle brands include Ford, Ford-Lincoln and Lincoln. The Other Financial Services segment includes holding companies, real estate, and the financing of some Volvo vehicles in Europe. The Company has over 70 plants across the world. Through its wholly owned subsidiary Ford Motor Credit Company LLC (Ford Credit), it provides automotive financing products to and through automotive dealers throughout the world.
An ad to help with our costs