Ford, GM Brace for Downturn
CBJ — Ford and General Motors are both taking precautionary steps in the event of a prolonged economic downturn now that an ongoing trade war between the United States and China seems to be intensifying.
Tariffs applied by both countries has resulted in a number of cost increases for raw materials, especially the auto industry.
Ford has saved a cash buffer of $20 billion for a potential downturn event while GM has about $18 billion in cash, with the potential to pay two years worth of dividends.
Fear of a recession has dominated volatile trading on Wall Street following President Donald Trump’s announcement of a new round of tariffs on goods on August 1 that could be worth as much as $300 billion.