Tuesday, September 27, 2022

Ford has been showing signs of a revival for years

Ford Motor has been working on a turnaround for years, but shows little progress in the showroom or its profits.

But the 118-year-old carmaker’s prospect has brightened recently, with many analysts acknowledging Jim Farley, who took over as chief executive last October. Ford has unveiled several well-received models, including a redesigned F-150 pickup, an electric Mustang sports utility vehicle and a new Bronco. In the first three months of the year, the company made $ 3.3 billion in profit, the most it has achieved in a quarter since 2011.

After years of decline, Ford’s share price has risen, rising more than 70 percent this year to about $ 15.50, the highest level since 2015. General Motors’ share is about 50 percent over the same period.

Mr. Farley has a long association with Ford, but his path to the best position is almost uncertain.

A grandson of a Ford employee, Mr. Farley, who turns 59 on Thursday, tampered with cars and owns a 1966 Mustang as a teenager. At the beginning of his career, he had the chance to join Ford, but he took a job at Toyota Motor, where he helped create the luxury brand Lexus and became a marketing star. He joined Ford in 2007 to help his CEO, Alan Mulally, revive the company.

Mr. Farley was a candidate for the leading position when Mr. Mulally retired in 2014, but was transferred in favor of Mark Fields, and again when the Ford Board, led by the family campaign William C. Ford Jr., elected Jim Hackett 2017. Mr. Hackett retired last year.

“From a business point of view, I feel like I’ve been preparing for this all my life,” he said. Farley said in an interview. But he added that many of the company’s recent successes were due to decisions made a few years ago. “

Yet colleagues say that Mr. Farley brought a sense of urgency and energy to Ford compared to the more measured style of Mr. Hackett.

During Mr. Hackett as CEO withdrew Ford’s share price, and Wall Street analysts complained that he did not adequately explain how he would turn the company around.

In May, Mr. Farley and a dozen other executives presented the company’s strategic plan to investors and analysts in an almost four-hour presentation, an opportunity promised but never under Mr. Hackett was not held.

“I think the change of CEO has mattered a lot to Wall Street,” said David Whiston, an analyst at Morningstar. “Communication and the protracted approach was a big problem under the old leadership. There is much more confidence in Ford now that the results will be there. ”

Mr. Farley is clearly not ashamed. He is active on Twitter, where he sometimes share memes with actor Chris Farley, his cousin, who died in 1997.

Ford still faces many challenges. It suffers more than the other car manufacturers under the worldwide shortage of computer chips. Due to the shortfall, he expects to make only half as many vehicles in the quarter as he had hoped. While demand for Ford models is strong, dealers often do not have the vehicles buyers want.

The company also lags behind GM and Volkswagen in China, the largest market for new cars. Ford also had to compare its operations in South America and Europe after losing ground to other carmakers.

Like GM, Ford is moving aggressively into electric vehicles, and it’s off to a good start with the Mustang Mach E, a sport utility vehicle that has taken Tesla’s market share. Next year, Ford will sell the F-150 Lightning, an electric pickup. The company started taking orders for the truck three weeks ago and has already raised 100,000. An electric version of his Explorer SUV is likely to follow, Farley said. By 2030, about 40 percent of the vehicles he manufactures should be electric.

Ford is trying to focus on producing vehicles that are striking rather than the generic sedans and compacts that American automakers have made in the recent past and largely discontinued.

The latest came this week – a small pickup truck called the Maverick. It is aimed at consumers who drive cars and minibuses and do not like the large, high or premium prices of large pickups such as the F-150 or the Ram, but may be interested in a vehicle that has more cargo space for things like bicycles and hockey equipment.

“It’s the product for people who never thought they wanted a truck,” Farley said.

Ford, known for its powerful engines, has made the Maverick’s base model a hybrid that goes 40 miles on a liter of gas. The truck starts at $ 19,995, or nearly $ 10,000 less than the cheapest F-150. Hyundai is launching a similar truck called Santa Cruz this summer, but has not yet said how much it will cost.

Sam Abuelsamid, an analyst at Guidehouse, noted that compact pickups were not very successful and that most car manufacturers did. But over the past ten years, American taste has shifted to trucks and sport utility vehicles, so Ford may be smart to try again. “There are a lot of people who have concluded that a pickup truck now fits their lifestyle, and it will be interesting to look at,” he said.

Mr. Farley expressed confidence that the Maverick would be a hit and said he could see Ford producing a family of Maverick variants, including an electric model.

“The electrification of the industry is a big change, and I think it was only clear when we launched Lightning and Mach E that Ford was going to be a winner in this new electrical reality,” Farley said. “Now investors are betting on Ford, and what they are telling me is, ‘The strategy is attractive, go carry it out, Farley.’ ‘

Nation World News Desk
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