Cars and Drivers
Wall Street Still Doesn't Believe in Ford
Published:
Last Updated:
Ford Motor Co. (NYSE: F) has announced a broad-ranging alliance with Volkswagen. Ford’s stock fell despite tremendous press coverage of the announcement. Ford continues to be the weakest of the global car manufacturers as the industry enters the age of autonomous cars and electric vehicles. The stock market reaction increases the pressure on Ford CEO Jim Hackett.
One reason investors were not impressed is that the alliance is loose and ill-defined, which matches a general description of most of Hackett’s most important announcements. A careful look at the VW announcement shows how little it actually contains.
The lead part of the announcement was among the most modest plans: “[T]he companies intend to develop commercial vans and medium-sized pickups for global markets beginning as early as 2022.” Clearly, the results could come later. Continuing, the companies said, “The alliance will drive significant scale and efficiencies and enable both companies to share investments in vehicle architectures that deliver distinct capabilities and technologies.” No financial forecasts attached, nor what is “distinct” about the results.
Most of the balance of the plan is a memorandum of understanding, a term that means that there is nothing concrete. In this regard, VW and Ford may or may not have a large partnership “to investigate collaboration on autonomous vehicles, mobility services and electric vehicles and have started to explore opportunities.”
The alliance was neither the merger nor partial merger many investors had hoped for. This would have made, by its nature, cooperation of real magnitude more likely.
Hackett has continued to fail to show a solid plan for Ford’s future, which increases the pressure on his boss William Clay Ford Jr., the company’s executive chairman. If Hackett cannot produce results that are more than small alliances, and the company’s results in the United States and China do not pick up, he may not keep his job into 2020.
Ford’s shares are down 27% in the past year. Shares of rival General Motors were off 15% during the same period. Those are not bragging rights for GM, but they are a reflection of how little support Ford and Hackett have.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
