(Sept 30): As the US and China square off over everything from tech to military might, Ford Motor Co has emerged as the American firm most at risk from its exposure to the world’s No 2 economy, according to Strategy Risks, beating the likes of Apple Inc and Tesla Inc.
Ford ranked first among 250 of the largest listed US companies, with an overall exposure score of 69 out of 100, according to the latest index published by the New York-based consulting firm that helps companies mitigate their exposure to China. Apple and air conditioner maker Carrier Global Corp tied a joint second with a score of 65 each, while Tesla and Coca-Cola Co were a joint third with a rating of 63.
Cummins Inc, Honeywell International Inc, RTX Corp, Walt Disney Co and Caterpillar Inc rounded out the top 10. Ford’s exposure increased by 20 points from 2022, with its current score standing at more than double the average rating of 34, according to Strategy Risks.
The rankings took into account the companies’ revenue in China, partnerships with Chinese companies and the state, risks related to labour and human rights and supply chains, and also the lack of disclosure of their own assessment of risks in that geography.
Ford declined to comment specifically on the rankings, citing lack of details.
“Given that we have no insights into the methodologies or how these rankings were made, and have significant questions about the validity of the scoring, we have nothing to contribute to the story,” the company said in a statement.
Ford, the second-largest US automaker, is the co-owner of at least seven state-controlled joint ventures (JVs) in China, and had at least four state influenced JVs as of December 2023, according to Strategy Risks. Ford says it has three JVs in China.
The index is not measuring “China presence” or “China market share”, but is measuring “China exposure” and how entangled Ford is with China, and how exposed it is to China risks, Strategy Risks said.
American companies with a presence in China in general face heightened risks, amid rising tensions between the world’s two largest economies.
Increasingly frayed ties between the two countries over matters from trade to geopolitics could drive prices of goods higher, as Washington tries to cut China off from tech and pharmaceutical supply chains. At the same time, Beijing could retaliate with tit-for-tat actions targeting American businesses.
Although Ford topped the overall score, Carrier and Tesla each scored 20 points — double that of Ford — on the business fundamentals measure, which tracks revenue in China, Strategy Risks said, without sharing more details.
Ford previously identified Chinese electric vehicle makers as its main rivals, with chief executive officer Jim Farley earlier this year saying that the company plans to cut costs across its Chinese operations to recover from a sales slump in the word’s largest auto market.
Western companies’ optimism has been flagging amid growing concerns about geopolitics, US-China relations and China’s worrying economic showing. A survey last year by the American Chamber of Commerce in Shanghai showed 52% of US firms said they were at least slightly optimistic about the business outlook in China over the next five years.
Crown Castle Inc and San Francisco-based Wells Fargo & Co had the lowest China exposure among the 250 firms, with each scoring an overall nine out of 100, Strategy Risks said.
Uploaded by Tham Yek Lee