The top two U.S. automakers are preparing for a possible economic downturn, the companies said on Tuesday (Aug. 13), as an ongoing trade war between Washington and Beijing fuels fears of a global recession.
Automotive News reported that tit-for-tat tariffs have increased raw material costs for the global auto industry, which is already dealing with weak demand in both China and the United States.
Ford Motor Co. has a cash buffer of $20 billion for a potential downturn event, Ford North American CFO Matt Fields said at a J.P. Morgan Conference in New York.
General Motors has $18 billion in cash, with the potential to pay two years worth of dividends, the company’s finance head, Dhivya Suryadevara, said at the conference.
“It’s something that we continually keep watching and updating to make sure that we’re all set for when the downturn does come,” Suryadevara said, adding that the company does not see an imminent downturn.
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