Ford Flattened Again

By Douglas A. McIntyre Published Aug 24, 7:30AM EDT

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Ford Flattened Again — © 189005028@N05 / Flickr

A recent Wall Street Journal article pointed out that Ford has another major quality issue. The headline was “Ford Confronts Strange, Ear-Piercing Static in F-150 Trucks.” The F-150 is Ford’s bestselling vehicle in the United States, making up more than a third of its sales. Ford’s earnings could be hit if consumers turn away from buying the pickup, even in modest numbers. (These are the bestselling cars in America.)
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According to the report, “drivers [are] reporting cases in which the speakers in their vehicles make a loud and abnormal noise—often frightening the occupants.” F-150 sales are already on the ropes. In the first seven months of this year, Ford sold 362,686 units, down 12.5% from last year. Ford hopes to replace some of these sales with those of the electric F-150 Lightning, but its sales in the first seven months were 4,469. Ford expects these to rise sharply.
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Ford management has conceded many times that quality is its Achilles’ heel. The new problem showed that management has not tackled it and it continues to bedevil Ford’s leaders. This undermines its image of competence, both with customers and investors.

Ford believes that electric vehicles (EVs) are its future. Yet, if quality problems remain, its EV sales will be hurt. Additionally, Ford will not hit EV production targets of 600,000 this year. That goal has been pushed out to 2024, which raises the question of whether it can hit the figure next year. Once again, management’s ability to hit the numbers has been undermined.
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Ford needs EV sales to work. It has bet billions of dollars on an EV future. As it charts a path, its EV loss will be $4.5 billion this year. Ongoing quality issues in the future with EVs will make that loss worse.
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Ford faces the fact that Americans may not buy EVs in great numbers, at least soon. Drivers are skeptical about the number of charging stations and how long it takes to charge an EV. A charging station partnership with Tesla may not turn around that anxiety.

Reputation is everything. Ford’s sales, whether of traditionally powered vehicles or EVs, have just taken another reputation hit.

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.