24/7 Wall St. Insights
- Ford Motor Co. (NYSE: F) CEO Jim Farley is under a lot of pressure.
- Chances are that his tenure will not last much longer.
- Also: Dividend legends to hold forever.
Ford Motor Co. (NYSE: F) CEO Jim Farley took over in October 2020. He has been a favorite of Executive Chair Bill (Willam Clay, Jr.) Ford. However, Bill has a habit of firing CEOs since he took over in 1999. He has gone through six since then, including when he took the CEO job. That means the tenure of the CEOs is four years. Star Alan Mulally lasted eight.
As Bloomberg reports, Ford has laid off 4,000 workers in Europe as its electric vehicle (EV) business there loses momentum. That adds to its deep trouble in the United States. While Bill Ford was partially responsible for the company’s horrible EV performance, most of it happened on Farley’s watch.
Ford originally said it would invest $30 billion into its EV business and produce 600,000 EVs by the end of 2023. That goal moved to 2024, but attaining it has become impossible. Ford has cut back production of its EV flagship, the F-150 Lightning. EV sales per month are extremely modest. This has happened as Tesla kept a huge lead in the U.S. EV sector.
Ford’s warranty issues may be just as big a problem as its EV sales. They have dragged earnings down by several hundred million dollars in the past two reported quarters. The National Highway Traffic Safety Administration recently fined Ford for one recall problem. Two more recall investigations then hit it. Farley has said, quarter after quarter, that the quality problem will get better.
Ford’s stock was about $8 a share when Farley took over. By January 2021, it had hit just over $10. Today, it is under $11. Farley is under a lot of pressure.
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