Bill Ford’s Dreams Hit Another Wall

By Douglas A. McIntyre Updated Jan 12, 4:25AM EST · Published Jan 17, 9:25AM EST

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Bill Ford’s Dreams Hit Another Wall — © Thinkstock

There has been one management constant at Ford Motor Co. (NYSE: F) since 1999. William Clay Ford Jr. has been the board chair for the entire period, representing the interests of the family that controls the company. Over the course of a bumpy ride, he has been the company’s biggest cheerleader. The most recent news from Ford has somewhat eroded the basis for his optimism. Ford’s 2018 earnings will be poor, at least as measured against Wall Street’s yardstick.

The news also undermines excitement about the short-term success of James Patrick “Jim” Hackett, Ford’s president and chief executive officer since May. Hackett is supposed to be the “change agent” who will lead Ford into a future of electric cars, self-driving vehicles and a global lineup of vehicles that will take market share from the world’s other large manufacturers.

It is ironic that the poor earnings forecast comes on the heels of a number of Ford forward-looking announcements at the North American International Auto Show, held in Detroit, which is also where Ford is headquartered.

Ford management put out a press release that covered Ford’s future product and geographic sales plans. A little further down the release, Ford covered 2017 earnings and its dividend. And, at the very bottom of the release, it registered the bad news:

For 2018, the company is guiding to an adjusted EPS in the range of $1.45 to $1.70. This guidance reflects higher commodity costs and further adverse exchange, offset in varying degrees by actions the company is taking to mitigate their effect.

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Ford has had five CEOs since Bill Ford became board chair. This includes him, as he was CEO from October 30, 2001, to September 5, 2006. When he left that role, he took the title of executive chairman. He became impatient with two other CEOs on the list: Jacques Nasser, who was CEO from 1999 to 2001, and more recently Mark Fields, who took the job in 2014 and was unexpectedly pushed out last May.

The primary criticism of Bill Ford is that as he has described the company’s bright future time and again, and he recently helped launch a vision of company’s new products and rosy outlook at the auto show. But Ford’s stock has fallen 65% since he took the chairman’s job, while the S&P 500 has risen 115%. Shares dropped another 6% on the bad news to $12.30.

Bill Ford rarely makes a public appearance without his opinions about the auto industry and Ford’s growing importance in it. When it comes to Ford’s performance, he has some explaining to do.

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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.