Ford’s Terrible Year

By Douglas A. McIntyre Published Jun 21, 6:40AM EDT

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Ford’s Terrible Year — © sbeebe / Flickr

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The many headwinds Ford Motor Co. (NYSE: F | F Price Prediction) faces explain the underperformance of its stock.

It is simple to show how badly Ford Motor Co. (NYSE: F) has done for shareholders. In the past year, its stock is down 16%. Rival GM’s performance, up 28%, is better than the S&P 500’s advance of 24% over the same period.

One reason Ford’s stock is off so much is its acknowledgment of quality problems. A recent analysis shows it has topped the industry for recalls over the past three years. While artificial intelligence (AI) has started to help the company identify vehicle defects while they are being built, warranty costs have taken a bite out of its earnings. Whether AI helps solve the problem remains to be seen until the new vehicles are on the road for several months–or even years.

Ford is still dogged by its lack of electric vehicle (EV) sales, despite a surge so far this year. Through May of this year, EV volume reached 37,208, up 87.8% year over year. However, that figure is only a little over 4% of Ford’s total. After the company has invested billions of dollars in EV development and production, it is difficult to justify the investment. As other large car companies flood the U.S. market with EVs, Ford continues to have an uphill battle.

Another problem Ford faces is sales in the world’s largest car market, China. According to a Good Car/Bad Car analysis, its sales there collapsed from a peak in 2016. Chinese manufacturers continue to grow in their home market, making a Ford recovery nearly impossible.

Ford’s problems outweigh any improvement over the past year. That is why the stock is down.

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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.