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Ford Is Shrinking

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This week Ford dropped 10% in market value. Ford is now worth $32 billion. This is about one-fourth of the peak value around 2000.

Ford automotive revenues missed analysts’ estimates and fell 5.2% to $36.7 billion for the fourth quarter of 2019.

In 2020, Ford sees 2020 earnings in the China region of $5.6 billion to $6 billion which is less than the previous consensus of between $7.3 billion and $7.6 billion.

Ford Motor executive Joe Hinrichs will retire and Ford is naming Jim Farley as chief operating officer.

Ford is working through an $11 billion global restructuring plan.

Ford has a joint venture with Rivian for electric trucks and electric SUVs.

Ford is planning to launch the Mustang-E as a mass market electric SUV in 2021.

Ford’s $100 billion in debt is rated as junk by Moody’s.

31 thoughts on “Ford Is Shrinking”

  1. A big problem with legacy manufacturers remains pension obligations. Telsa doesn’t have this to deal with. During the great recession changes to pensions were made for new hires (from defined benefit to defined contribution or hybrid plans), but during their defacto ownership of the most of the domestic car industry, governments in Canada and the United States should have done more to fix this issue. This isn’t the fault of the fault of the companies (they should be models, really, for having good pensions), but the fact is that people are living longer after retirement, and with greater benefit costs. Governments have means to take more responsibility for pensioners as they age, and I think an obligation to help companies fairly fix their pension problems.

  3. KERS includes options for flywheels and also batteries, so they are using KERS.

    Flywheels are expensive and delicate, thus mainly only used in Formula 1 racing.

  4. Ah right, Europe is like 80% manual transmissions for those cars. They wouldn’t have as many direly upset customers like the USA for the dry clutch powershift transmissions.

  5. Hydraulics tend to leak a lot and are prone to become very unreliable when not serviced properly. Batteries and wires you just deal with a contact corrosion issue every 10-15 years or so.

  6. Pretty much. The only discernable difference is they use words like “Oriental” instead of “East Asian” when over for holiday meals.

  7. thanks, good to know. I thought they discontinued it everywhere, but I see the Europeans still like it. Even though Ford makes operating losses in Europe every year….

  8. Though at this very moment Apple seems to have it’s Chinese factories closed down from Corona virus fears.
    So they may have messed up badly there.

  15. If you are copying you are always a step behind. That is all well considered at Tesla. They gave their patents away. They want people to follow, to copy.

    It is true that the Chinese are good at getting prices lower. And that will certainly help them sell cars in China, Africa…maybe South America, Indonesia, Malaysia, or the Philippines.

    Apple has always had absurd prices. Their products are really only going to be attractive to first world countries and people with first world incomes. Have you heard? They are hurting so very badly…

    That said, you won’t catch me buying an Apple phone…well I don’t know…maybe at some point used? To me it is a scooter when I prefer a car (PC). And just as a principle I don’t buy products that companies make a huge profit on, if I can avoid it. Gougers like that should not be rewarded. When gougers are doing well, there is something not quite functioning right in the market.

    I think Tesla is motivated to bring down prices, even if stockholders foolishly don’t like the idea. As such, it is not Apple.

  16. Former CEO Allan Mulally is a hard act to follow (CEO of Ford 2006-2014, was formerly at Boeing as their CEO of BCA (Boeing Commerical Airplanes) and the guy they should have made the overall Boeing CEO).
    He’s one of the counterexamples to when some people say CEOs are overpaid. That guy was underpaid.

  17. Their dry clutch automatic – only available in those two models as far as I know – was defective by design. It’s murdered sales of those cars.

  19. Focus died and Fiesta is on life support. The Focus replacement (Escape) has a slightly higher margin but will take a while to recover the retooling costs. It’s the bane of auto making. Small, simple cars needs about as much development $ as bigger/higher margin ones. To not get stuck in the Death Valley of making cars, you either need to make massive numbers of small inexpensive cars (Corolla) or make lots of niche high-margin ones (F-Series truck). Incidentally, Corolla and F-Series are the 2 best selling cars in the world and have 3% of the global vehicle market between these 2 models.

  22. Ford is shrinking and Tesla is growing… net loss = zero? It’s only a problem for the US economy when Car Design and manufacturing shrinks In the US and cars get imported And designed outside of the United States instead….

  23. just how long can Ford continue to lose money, market share, executives and consumer confidence before they are relegated to the dustbin of failed companies that could not adapt due to lack of vision?

  26. Ford is a mono-product company that has stalled. Big trucks and SUVs, same build more or less. The cars only make up about 12% of sales. Revenues are the same today as they were 20 years ago. They will keep milking the trucks until there aren’t anymore wannabe cowboys out there. Shrinking into glory.

  27. Ford is a big company with a lot of different products all over the world. Hard to make sweeping statements.
    There are some decisions that are questionable. I think they should not have moved away from hybrids. They had the makings of a hydraulic hybrid that was powerful and efficient. And it required minimal changes. Just a new kind of transmission. https://newatlas.com/new-hydraulic-hybrid-technology-developed-by-epa-and-ford/3129/
    They spent billions trying to reduce the weight of the F-150 to improve fuel efficiency while sitting on this Hydraulic hybrid tech. And after all those billions the F-150 is still not the most efficient full-sized pickup. But had they gone with this hydraulic hybrid they would have gained upwards of 30% in efficiency, leaving the other makers in the dust.
    I am not against the aluminum body…but reducing the weight a little is not going to suddenly make the F-150 much more fuel efficient.
    Their styling looked interesting at first with all these catfish looking fronts on their cars but that got old fast…and they didn’t really change. https://en.wikipedia.org/wiki/List_of_Ford_vehicles#Current_production_vehicles_(North_America_&_Europe)
    This thing with companies trying to make all their vehicles have the same design cues is really a poor fit for a company with a lot of products. Reasonable if you make 3 models of similar type vehicles, but not 2 dozen varied models. The pickups and the GT escaped it, but everything else got the fish front.

  29. The yellow monkey has no appreciation of a free market of anything, singularity, one celestial ruler, and everyone else deserves to be pushed aside.

  31. Poor CEO and management. Look at his end-of-the-year comments for the last 3 years about missing earnings. He will be forced out this year anyway, but the board should have removed this joker sooner.

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