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Ford Motor Co. Chief Financial Officer Bob Shanks said Tuesday the Dearborn automaker would remain profitable if the auto industry entered a severe recession and U.S. sales plummeted 30 percent in a single year.

In such a scenario, Shanks said Ford would cut costs by about $3 billion by eliminating shifts and overtime at its manufacturing plants, lowering its profit sharing and slashing sales, advertising and other costs. He said the automaker would continue to invest in engineering and would continue to roll out new products.

He said Ford would be able to break even if automakers sold just 11 million vehicles in one year — a 37 percent plunge from last year’s record 17.5 million new cars and trucks sold in the U.S. The industry is expected to set another record again this year, although the increase is expected to slow and investors have expressed concerns that this cycle has reached its peak.

Shanks said Ford would continue to offer a dividend and believes credit agencies would keep its rating at investment grade in a downturn.

“We think we’re in very good shape for a downturn,” he told investors in New York.

Ford’s scenario presumes the worst; even in the midst of the last recession in 2008-2009, sales only tumbled about 20 percent.

Wall Street has expressed concerns whether traditional automakers like Ford or General Motors Co. could survive another recession. It appeared unmoved by Ford’s announcement; its stock price closed Tuesday down half a percent to $13.59 a share.

Elsewhere in the world, Shanks said the Dearborn automaker expects its momentum in Europe to continue. Last year, it posted a $259 million profit for the first time there since 2011. It still foresees trouble in South America, where Brazil’s economy is expected to shrink between 2-3 percent.

Ford predicts sales in China will jump from the 23.5 million last year to as much as 25.5 million this year.

Shanks said Ford remains on track to reach its 2016 guidance of having a better financial year than 2015, when it reported a record pretax profit of $10.8 billion.

mmartinez@detroitnews.com

(313) 222-2401

Twitter.com/MikeMartinez_DN

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