Ford Cannot Manage Itself

By Douglas A. McIntyre Published Feb 3, 8:30AM EST

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Ford Cannot Manage Itself — © Carl Court / Getty Images News via Getty Images

Ford’s 2022 financial results were disappointing. The company failed to solve supply chain problems. Its investment in electric vehicle (EV) maker Rivian fell apart, and its investment in Argo AI cratered. None of this would have happened if Ford had more skilled management.

As is generally the case, Ford’s PR department started its earnings release with a misleading headline: “People, Plan, Products Position Ford Well for ‘Pivotal’ 2023.” Really? Why not start with the facts? This may have been the handiwork of Mark Truby, Ford’s chief communications officer.

Revenue rose 16% for the year to $158.1 billion. Ford lost $2 billion, compared to a profit of $17.9 billion in 2021. Ford wrote down its investment in Rivian by $7.4 billion. Why it would invest in a tiny, troubled EV company will always be a mystery. It wrote down $2.8 billion on its AI Strategy, primarily its investment in Argo. (Click here for the companies making the most profit per second.)

President and CEO Jim Farley took the blame for Ford’s supply chain issue. “We left about $2 billion in profits on the table that were within our control, and we’re going to correct that with improved execution and performance.” That should have read, “I am going to correct …”
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A sign of Ford’s inability to get its supply chain in order is that it suddenly increased the price of its F-150 Lightening because of component prices. It raised the price of its Mustang Mach-E for similar reasons but then lowered it again. If the Mach-E price drop is to gain market share only, margins on the vehicle will fall apart.
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Ford also made a big deal about its EV success. However, as The New York Times pointed out in January, “Ford sold 2,264 electric F-150 Lightning pickup trucks, up from just 63 in January 2022, when the vehicle had just become available. It also sold 2,626 Mustang Mach-E electric S.U.V.s, up 11 percent.” Each figure is tiny.
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If there was not enough blame to go around, Chief Financial Officer John Lawler said, “In simple terms, we need to improve quality and lower costs now.” True.

Somewhere off to the side, Executive Chair William Clay Ford Jr. and members of his family must have been cringing.

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.