Ford to take $350 million charge after changing its Bolivar valuation

Article by Christian A., on April 6, 2014

Ford Motor Co. will take a charge of around $350 million in the first quarter of 2014 after changing its valuation of the Venezuelan Bolivar. Ford is now using an exchange rate of VEF10.8 to the United States dollar, compared with the VEF6.3 rate it used before, the carmaker said in a filing with the U.S. Securities and Exchange Commission.

Ford said in January that it was cutting output in the country because of a possible shortage of hard currency. Ford said it cut output in Venezuela by 75 percent in the fourth quarter of 2013 and planned to keep it this year as car sales in the country continue to slump. Ford COO Mark Fields said in January that the availability of US dollars "is crimping” their ability to pay suppliers.

Ford's currency move came after a warning made in December that it was assuming a "major" devaluation in the bolivar." Bob Shanks, the carmaker’s chief financial officer, said December that recent government moves in Venezuela -- like price controls and a limited and uneven supply of foreign currency to support output -- have adversely affected production and the overall results in the region.

The carmaker warned back then the business environment in Venezuela is volatile and increasingly difficult and unpredictable for its operations.

“Recent government actions in Venezuela, including price controls and a very limited and uneven supply of foreign currency to support production, have affected production adversely as well as the business and overall results in the region,” Bob Shanks, Ford’s chief financial officer, said in December. “The environment in Venezuela is volatile and increasingly difficult and unpredictable for business.” [source: Bloomberg]

Topics: ford

If you liked the article, share on:

Comments

Recommended

The BMW 7 Series is already highly sought after but nonetheless, the German marque is giving it a more exclusive variant for the Russian market, and they are calling it...
by - October 20, 2017
Several automakers including Porsche, Volkswagen, Smart and even Land Rover have all been victimized by cheap Chinese copycats. And if you haven’t seen it yet, the most recent one would...
by - October 20, 2017
The Mercedes-Benz G-Class has been around for quite some time now but to bid it farewell, the company has launched the Mercedes-AMG G65 Final Edition. Mercedes will only build a...
by - October 20, 2017
Have you ever wondered what you can you buy with $9,365 in your pocket? Well, you have quite a lot of options. In fact, you can even purchase a used...
by - October 20, 2017
The Audi A7 Sportback, whether you would like to call it a sportback or a four-door coupe, has always been a beautiful car. And this week, the 2019 model year...
by - October 20, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries