Ford vs GM

By Douglas A. McIntyre Updated Mar 5, 8:53AM EST · Published Mar 5, 6:35AM EST

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Neither General Motors Co. (NYSE: GM) nor Ford Motor Co. (NYSE: F) has done its investors any favors over the past two years. Both stocks are well down compared to the S&P 500. GM has done somewhat better. With the release of its new long-range electric battery, it has a leg up on Ford again.

GM shares are down 17% over the past two years. It has done moderately well in the United States. Despite struggles in China, the world’s largest car market, it is still a sales leader there. Ford, on the other hand, has crippled sales there and has no path to recovery.

Wall Street is skeptical about the turnaround plans of Ford CEO Jim Hackett. He may keep his job until the end of the year, if Ford’s problems worsen. He has done little to show his master plan will work. There is now concern that Ford’s decade could be slashed.

On the other hand, GM CEO Mary Barra has had a steady hand at the company. She has not articulated any grand plan and seems satisfied with a sure set of steps forward that she has made without an effort to broadcast it to the world.

GM has just released an engine that it has demonstrated has a range of 400 miles, which is longer than Tesla Inc.’s (NASDAQ: TSLA) best. The batteries likely will first find a home in new Cadillac models, and then on to much of the rest of the GM fleet. Barra said upon the release of the battery, “GM is building toward an all-electric future because we believe climate change is real.” She promised GM would invest $3 billion in electric car research and development between 2020 and 2025.

[nativounit]

Can GM take on Tesla? Perhaps not in the near term. Tesla has both the lead in U.S. electric car sales and an almost magical brand among car buyers. However, at some point, battery range, and probably a dealer-based service network, will tip some of that balance.

It is reasonable enough to say that Ford has plans as well. Its forays have been very modest, and product announcements less than modest. Hackett has made the mistake of claiming he can almost completely transform Ford in the next decade as he plans to change it to an autonomous and electric car behemoth. One would think that if this can work, Ford would be further along.

Ultimately, Ford has not convinced people that its present is at all promising. That is at the core of skepticism about its future. If Ford cannot get things right today, why think that will change tomorrow. GM does not have a similar challenge.

[recirclink id=649167]
[wallst_email_signup]

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.