Ford’s stock dropped 12% after it gave its future away to the UAW and delayed EV product plans. It also missed Wall St.’s forecast for its third-quarter numbers. Anyone who wondered if the company is among the worst-run large public corporations has an answer.
A CNBC reporter wrote: “Shares of Ford Motor traded sharply lower Friday after the company reported earnings that missed estimates and said that demand for its electric vehicles was falling short of expectations.” It was worse than that. The comment does not include that Ford has a new contract with the UAW that will cost it hundreds of millions of dollars a year and pushed back its investment of $12 billion to support its EV future.
Did Ford have to give in to the UAW? Not as quickly as it did, certainly. It blinked when it could have pressed union members to worry about their jobs and how long the strike would take. It may have been costly in the short term. The long-term effects are devastating. (These are the 31 largest worker strikes in American history.)
Ford’s management has insisted over and over that it had to be a leader in the EV sector to have a significant future at all. Ford expects 40% of its sales worldwide will be EVs by 2030.
It was supposed to have the capacity to produce 600,000 EVs this year. It has pushed that target to next year. Chances are, it will be pushed again.
It is puzzling that Executive Chairman Bill Ford has not fired CEO Jim Farley. Ford has had no problems firing CEOs in the past. He has nearly made a habit of it. Farley has been wrong over and over again.
Ford’s future can be compared to the last line of F. Scott Fitzgerald’s The Great Gatsby. “So we beat on, boats against the current, borne back ceaselessly into the past.”
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