Ford Chair Bill Ford Has Run Out of Excuses

By Douglas A. McIntyre Updated Mar 13, 5:03PM EDT · Published Oct 24, 6:20AM EDT

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Ford Chair Bill Ford Has Run Out of Excuses — © Bill Pugliano / Getty Images

There is a myth that battered Ford CEO and President Jim Hackett runs Ford Motor Co. (NYSE: F | F Price Prediction). It is not true. Hackett works for William Clay Ford Jr., who has been board chair since 1999 and currently holds the title of Executive Chairman. Ford’s latest earnings statement shows how poor a job Bill Ford has done as the company’s performance continues to deteriorate.

Third-quarter revenue fell from $37.6 billion in the period a year ago to $37.0 billion. Earnings were much worse, down to $0.11 per share from $0.25. The company blamed high warranty costs, poor sales in China and discounts. The operation in China is a particular debacle. Deliveries in the world’s largest car market were down 30% in the third quarter to 131,060 vehicles. No major car company can do well globally without strength in China. As for discounts and high warranty costs, there is no reason to believe those will go away.

Worse than the poor third-quarter results, Ford cut its guidance for the year. Ford expected what it calls adjusted earnings per share to be $1.20 to $1.32. Before, the forecast called for $1.35 per share. Bloomberg pointed out that the numbers may cause S&P to cut Ford’s debt to BBB, one level below a junk rating.

The situation at Ford is worse than the earnings tell. Hackett’s $11 billion restructuring has barely begun. Ford’s move into autonomous and electric vehicles appears no faster than or superior to similar projects at other global manufacturers. In short, Ford has not done anything to lead outsiders to think its prospects are anything other than mediocre and could be bleak.

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Ford’s shares have sold off 25% over the past two years. There is almost certainly a recession on the horizon, which usually hits car sales hard. Bill Ford may need to dismiss Hackett soon. That will not alter the fact that the buck stops with him.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.