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Ford Feels Venezuela Pinch With $800 Million Charge

Tammy Whitehouse | January 27, 2015

Ford Motor Company is taking a one-time $800 million charge to earnings in its 2014 fourth quarter because of continued inflationary and currency problems with Venezuelan operations.

Ford said in an 8-K filing with the Securities and Exchange Commission that its Venezuelan operations can’t pay dividends and other obligations denominated in U.S. dollars because Venezuela exchange control regulations have produce an “other than temporary” breakdown in currency exchange between the Venezuelan bolivar and the U.S. dollar. Ford says the currency woes have constrained parts availability, which is making it difficult to maintain normal production.

The currency and resulting supply problems have led Ford, in accordance with accounting standards, to switch its Venezualan operations to the cost accounting method, which has produced the one-time charge of $800 million,...

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