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Ford Replaces Its C.E.O.

Ford Motor said its chief executive, Jim Hackett, will retire on Oct. 1, ending a three-year run in which the automaker has tried to streamline its operations and focus its business on electric cars, trucks and sport-utility vehicles with mixed success.

Mr. Hackett, 65, will be succeeded by James D. Farley Jr., who had been named chief operating officer in February.

“I am very grateful to Jim Hackett for all he has done to modernize Ford and prepare us to compete and win in the future,” said William Clay Ford Jr., Ford’s executive chairman. The company, he added, is becoming “much more nimble.”

Mr. Hackett, a former chief executive of Steelcase, an office furniture manufacturer that is much smaller and less complex, was named to the top job at Ford in May 2017, as the company’s business was slumping. He promised to revitalize Ford’s operations and steer the company toward vehicles that would generate profits and invest in emerging technologies like electric and self-driving vehicles.

The company is starting to introduce some of the models developed under Mr. Hackett, including a redesigned F-150 pickup truck and the Mustang Mach E, an electric S.U.V. styled to resemble the storied sports car.

“We have lots of work ahead of us to complete our mission, but thanks to Jim, we are a very different company today than we were three years ago,” Mr. Ford said in a conference call to discuss the leadership change.

Mr. Hackett is credited with eliminating money-losing cars from Ford’s North American lineup in favor of more profitable pickups and S.U.V.s. He formed alliances with Volkswagen, the Indian automaker Mahindra and Rivian, a start-up working on electric trucks in which Ford has invested. Mr. Hackett also accelerated plans to develop electric vehicles.

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Credit…Patrik Stollarz/Agence France-Presse — Getty Images

But so far, the turnaround has had little effect on the company’s bottom line and stock price. Ford’s profits fell in 2018 and 2019, dropping to $47 million last year. This year, the pandemic has hammered its business, and the company lost $876 million in the first half of the year.

Wall Street analysts have criticized Mr. Hackett for stopping short of presenting a full turnaround plan with detailed financial goals and timetables. Ford had planned to do so early in his tenure, but changed course and presented only broad targets and revealed its plans piecemeal as it rolled out specific initiatives and projects.

Ford shares were trading at about $11 when Mr. Hackett arrived. The stock was trading at $6.77 Tuesday afternoon, up about 1 percent.

Mr. Hackett “faced challenges in technology changes and current operations without technology or auto industry experience,” said Erik Gordon, a business professor at the University of Michigan who follows the auto industry.

Investors value Ford at about $27 billion, just one-tenth the market capitalization of Tesla, the electric automaker that makes far fewer cars and has been around only since 2003.

Mr. Farley, 58, joined Ford in 2007 from Toyota Motor, and has held a variety of jobs, including running the company’s marketing, its European operations and a new business strategy group.

Mr. Farley said his first priority is ensuring a smooth transition. He added that he is optimistic about the company’s prospects now that it has introduced the new F-150, a new Bronco S.U.V. and the Mustang Mach E, a potential Tesla rival slated to go into production late this year.

On his list of tasks are raising Ford’s profit margin in North America to 10 percent or more, cutting costs and reviving the company’s sales in Europe, China and South America.

“I’m inspired by the momentum we are building,” Mr. Farley said in the conference call. “To fulfill our mission, we need to swing for the fences.”

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Interest Rates Are Low, but Loans Are Harder to Get. Here’s Why.

As public school teachers, Tori Smith and her husband have careers that should survive the coronavirus economy, but their mortgage lender wasn’t taking any chances.

It told them that they would have to put down more money to keep the interest rate they wanted, then dialed back what it was willing to lend them. And Ms. Smith said it had checked their employment status several times during the approval process — and again a few days before the couple closed on their home in Zebulon, N.C., last month.

Ms. Smith said she had never gotten a straight answer about the new requirements, but she ventured a guess. “I felt like we had to bring more just because of Covid,” she said.

The economic crisis caused by the pandemic has driven interest rates to rock-bottom levels, meaning there has hardly been a better time to borrow. But with tens of million of people out of work and coronavirus infections surging in many parts of the country, qualifying for a loan — from mortgages to auto loans — has become more trying, even for well-positioned borrowers.

Lenders that have set aside billion of dollars for future defaults have also tightened their standards, often requiring higher credit scores, heftier down payments and more documentation. Some, such as Wells Fargo and Chase, have temporarily eliminated home equity lines of credit, while Wells Fargo also stopped cash-out refinancing.

It’s not unusual for lenders to tighten the credit reins during a downturn, but the current situation has made it especially challenging for them to get an accurate read on consumers’ financial health. Borrowers have been able to pause mortgages, halt student loan payments and delay paying their tax bills, while millions of households have received an extra $600 weekly in unemployment benefits. Those forms of government support could be masking an underlying condition.

“It makes it hard for a lender to understand what the consumer’s true state of credit quality is and their ability to pay back a loan,” said Peter Maynard, senior vice president of global data and analytics at the Equifax credit bureau.

Credit card companies, for example, mailed out 57 million offers to consumers in June, a historic low and down from 272 million a year earlier, according to Mintel, a research firm that has been tracking the offers since 1999. Some banks have stopped offering the types of cards that attract people who may be focused on paying down debt, such as BankAmericard, Mintel found.

Issuers are also being careful with cards belonging to current customers, said Mark Miller, associate director of insights for payments at Mintel.

“Some dormant accounts are being closed,” he said. “So if they have a credit card sitting in a drawer, those accounts are at risk of being closed, and credit lines with a $10,000 limit may eventually be knocked down to $8,000.”

For auto loans, borrowers with lower credit scores and thin credit histories face more rigorous requirements and less generous terms, including shorter loan periods.

“Subprime borrowers are not getting loans as readily as they were pre-pandemic or a year ago,” said Jonathan Smoke, chief economist at Cox Automotive, referring to consumers with credit scores below 620.

Interest rates for new and used vehicles remain low — below 4 percent at many banks and credit unions — but only for more qualified borrowers, said Greg McBride, chief financial analyst at BankRate.com.

“Good credit and a down payment are required to get the best rates, with weaker credit increasingly sidelined — particularly for older-model used car purchases,” he said.

Ford Motor said it hadn’t tightened standards on loans through its financing unit, but last month it introduced a program to make wary borrowers more comfortable. Those who buy or lease a car through Ford’s financing unit before Sept. 30 can return it within a year if they lose their jobs. Ford said it would reduce the customer’s balance by the vehicle’s book value, and then waive up to an additional $15,000.

If that measure is meant to stoke demand, no such program is necessary for home buyers.

For the first time in nearly half a century of tracking, 30-year fixed-rate mortgages averaged about 2.98 percent, according to Freddie Mac. The mortgage industry made $865 billion in loans during the second quarter, the highest amount since 2003, when quarterly originations twice topped $1 trillion, according to Inside Mortgage Finance, a trade publication.

And that’s with lenders being picky about their customers and particular about their requirements. JPMorgan Chase, for example, will make mortgages to new customers only with credit scores of 700 or more (up from 640) and down payments of 20 percent or higher. USAA has temporarily stopped writing jumbo loans, which are mortgages that are generally too large to be backed by the federal government, among other products. Bank of America said it had also tightened its underwriting, but declined to provide details.

Ms. Smith and her husband, Philip Ellis, had hoped to go through a first-time homebuyer program at Wells Fargo that would require them to put down 3 percent. They even sat through a required educational course. But two weeks before closing on their $205,000 home, their lending officer said they needed to put down 5 percent to keep their rate.

A week later, Ms. Smith said, they learned their loan was for less than what they had been preapproved for — and they needed to come up with an additional $4,000. In the end, their down payment and closing costs exceeded $14,000 — about 45 percent more than they had anticipated.

The couple, who had married in April, used money recovered from their canceled wedding reception. Ms. Smith said they were also lucky to have the support of their families, who fed and sheltered them so they could save every penny. But the stability of their jobs was also most likely a crucial factor.

“I think our ability to secure the loan was due to us both being schoolteachers and having a contract for employment already for the following year,” she said.

Wells Fargo said it hadn’t increased its credit score requirements, but it has raised down-payment minimums on certain loans not backed by the government because it had to suspend most interior appraisals of homes during the pandemic. Even under normal circumstances, there are a variety of situations in which borrowers may be asked to raise their down payment or obtain a better rate by doing so, a company spokesman said.

Some lenders also want to know more about borrowers’ other possible sources of cash.

When Chris Eberle, a technology executive, and his wife were locking in their jumbo mortgage for a new home in Palo Alto, Calif., their lender, a California mortgage bank, wanted to know not only how much they had in their retirement accounts but how easy it was to get at that money.

“They wanted, account by account, details on the withdrawal and loan options,” Mr. Eberle said.

And they, too, had to put down more than they had planned. Before the crisis, a jumbo loan could be had with 10 percent down. Mr. Eberle said they had to put down 20 percent — and found a cheaper house to make it easier.

Other borrowers, including the self-employed, are being asked to provide more detailed proof of their earnings — at least when they’re getting a loan that will be backed by Fannie Mae or Freddie Mac. .

“Employment and income verification for self-employed borrowers is now multiple times more detailed as it previously was,” said Ted Rood, a loan officer in St. Louis who lends nationally.

Income verification is also more rigorous across the board, and Mr. Rood said he was required to do two verifications over the phone. It makes sense, he said: He had just prepared a loan for a married couple — a gym owner whose income had suffered and his wife, a speech therapist with a seemingly more stable position because she was able to work with clients remotely.

“We were set to close on a Monday in early June,” said Mr. Rood, who was working at Bayshore Mortgage Funding, which is based in Timonium, Md., at the time. But when the loan processor called the wife’s employer the Friday before, the processor learned that the woman had been laid off.

The lender withdrew the loan.

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Automakers Are Making Cars, but Virus Surge Puts That at Risk

Automakers are back to building cars and trucks at full speed — at least for now. But as coronavirus cases rise across much of the country, it may become difficult for the companies to keep at it.

This week, General Motors will lay off a third shift of workers — about 1,250 people — at its truck plant in Wentzville, Mo., where absenteeism has been rising because workers are concerned about the spread of the virus. Union workers at another G.M. plant in Texas, where hospitals have been inundated, have called on the company to shut down their factory.

The auto industry, which accounts for about 4 percent of the country’s economic output, came to a near standstill in mid-March for nearly two months as the first wave of coronavirus cases spiked. Fiat Chrysler, Ford Motor, General Motors, Honda, Toyota and other manufacturers are now running almost all of their plants in the United States on two or three shifts, which amounts to full capacity.

The revival has helped automakers restock depleted dealer lots and cater to a rebound in demand that has been driven in part by people who feel they need a car for social distancing during the pandemic. Car sales in June were down from a year ago but were more robust than what analysts had expected.

But conditions are changing fast. Gov. Gavin Newsom of California on Monday ordered restaurants, wineries, movie theaters and other businesses to halt indoor operations. He stopped short of closing factories — such as the Tesla plant in Fremont that employs some 10,000 workers — but he suggested that he was open to restricting economic activity further if the pandemic worsened.

“We’re going back into modification mode of our original stay-at-home order,” Mr. Newsom said. “This continues to be a deadly disease.”

Regardless of what governors, mayors and other policymakers order companies to do, auto manufacturers will most likely be forced to make changes like reducing shifts and temporarily closing plants, said Erik Gordon, a business professor at the University of Michigan.

“Every plant has a lot of workers, so there will be at least a few workers at every plant that come down with Covid,” he said. “When that happens, other workers will fear that they will be next. No matter what the states allow, it will be hard to keep the plants operating.”

Last month, members of the United Auto Workers union called on G.M. to shut down a sport-utility vehicle factory in Arlington, Texas, in response to the rapid spread of the virus in that state. On Monday, Toyota said it had seen an increase in coronavirus cases among workers at its plant in San Antonio, but the company declined to disclose how many people have taken ill.

Auto plants bring several thousand workers together under one roof every day. Manufacturers have taken a range of precautions to prevent infections among workers, including the use of masks, gloves and face shields. Companies are also monitoring the body temperatures of workers, making time for sanitizing work areas and adding barriers to shield people who need to work close to one another to complete certain tasks.

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Credit…Fca/via Reuters

Car companies are reluctant to halt production again, fearing what it would do to their finances just as they were recovering from the shutdown in the spring. Layoffs would also be difficult for workers. The extra $600-a-week supplement to unemployment insurance authorized by Congress in March, which helped many autoworkers, ends on July 31. It is not clear if lawmakers will extend the benefit.

Shortly after factories reopened in May, some automakers temporarily shut down plants after workers — usually just one or two — tested positive for the coronavirus. No automakers have reported widespread outbreaks like those that have affected meat-processing plants.

  • Frequently Asked Questions

    Updated July 7, 2020

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • Is it harder to exercise while wearing a mask?

      A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

    • I’ve heard about a treatment called dexamethasone. Does it work?

      The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

    • What is pandemic paid leave?

      The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

    • Does asymptomatic transmission of Covid-19 happen?

      So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • How does blood type influence coronavirus?

      A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.