Ford Secures $3 Billion Credit Line Amid Economic Uncertainty

According to foreign media reports, Ford Motor Company has secured a $3 billion credit line due to economic uncertainties and the potential threats posed by U.S. President Trump's tariff policies on its financial outlook for the second half of the year. In a filing submitted to the U.S. Securities and Exchange Commission on July 28, Ford stated that the funds can be drawn within a year, during which the company must maintain at least $4 billion in cash reserves. A Ford spokesperson mentioned that this loan aims to 'further enhance the company's asset liquidity and provide financial flexibility.' As Ford prepares to announce its second-quarter financial report, its Q2 profits may decline due to tariffs and higher recall expenses. Bloomberg data indicates that analysts expect the company's earnings per share, to be released on July 30, to drop by 30% year-over-year. David Whiston, a stock analyst at Morningstar Research Services, expressed surprise at Ford's decision to secure this loan given the company's strong cash position, which stood at $27 billion in cash and $45 billion in liquid assets as of the first quarter of this year. Whiston stated in an interview with Automotive News, 'It’s more likely that Ford wants to obtain some additional liquidity due to uncertainties regarding the impact of tariffs on automotive demand for the second half of this year and 2026, combined with the overall economic climate being unclear.' He pointed out that Ford's aggressive incentives and other adverse factors might reduce its cash flow. 'However, it’s not surprising that the company has weak cash flow in the second quarter due to employee purchase promotions and rising steel and aluminum costs.' In May, Ford indicated that tariffs are expected to reduce its profits by $1.5 billion this year, and in the first quarter, import tariffs cost the company approximately $200 million. At that time, Ford withdrew its profit expectations for the full year of 2025, stating more details would be shared in the Q2 financial report. The company had previously estimated its adjusted EBIT for 2025 to be between $7 billion and $8.5 billion. Ford has warned of a $570 million loss in Q2 due to recalls of nearly 700,000 vehicles to fix fuel leak issues. This year, the company has reached a record 90 recalls in the U.S., positioning it to become the automaker with the most recalls for the fourth time in the past five years. Although Ford imports key products like the Mustang Mach-E, Bronco Sport, and Maverick from Mexico, and the Lincoln Nautilus from China, it is less affected by tariffs than its domestic competitors. In May, Ford's CFO Sherry House revealed that the company has not made any adjustments to its Mexico-based production related to U.S. sales, although it has raised prices for these models. Thanks to popular employee purchase discount programs, Ford's sales in the U.S. increased by 14% year-over-year in Q2. Nevertheless, the company has lowered its forecast for U.S. light vehicle sales by 500,000 units to 15.5 million for the year. In July, Ford ended its employee purchase discount program and launched a new promotion offering 48-month zero-interest loans with no down payment and no payments due for the first 90 days. Some analysts believe that Ford's sales momentum may boost its profits in the second half of the year. Federico Merendi, a research analyst at Bank of America Securities, noted in an investor report on July 21, 'We believe that due to summer discount initiatives, demand for Ford products will remain strong in Q3; however, we expect demand to decline in Q4, especially for electric vehicles.'