Investing

Prediction: Ford's (F) Humiliating Anniversary Means a Change in Leadership

Austin Smith

Published: December 13, 2024 7:58 am

24/7 Wall St. Key Points:

• Over the past two years, Ford Motor Co. (NYSE: F) has had flat stock performance, far below the S&P 500/
• Key issues include declining competitiveness in China, poor EV sales, and over-reliance on the F-Series vehicles—which still account for almost a third of U.S. income.
• Once a flagship luxury brand, Lincoln today battles rivals like Lexus and BMW, which fuels rumors about whether Ford might sell or reinterpret the sector.
• Also: Are you ahead, or behind on retirement? Click here to find out. (sponsored) 

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Transcript:

[00:00:00] Douglas McIntyre: Interesting anniversary coming up at the Ford Motor Company. within the next two months, if the stock stays where it is, it will be the same as it was when Farley, the current CEO came in. So what that means, that

[00:00:16] Lee Jackson: I thought you were going to say when Henry Ford was in. Okay,

[00:00:18] Douglas McIntyre: Yeah, well, it goes back almost that far. So that means that Farley will, they pay a dividend. But it means that Farley will have done nothing for the, the, the Ford investors, and it also means that he will have nothing for the Ford family. So keep an eye, everyone on what happens with this anniversary right now. It’s at 10 or 11, when he came in, it was at seven pretty soon.

[00:00:49] Douglas McIntyre: It’sgoing to get back to. I think it was 10 about two years ago.

[00:00:53] Lee Jackson: Right, right,

[00:00:54] Douglas McIntyre: December, January, if, if the word doesn’t move right now, are going to be identical. Now the people say, well, it’s the same. Well, guess what? Boys and girls, the S and P 500 is up about 40 percent over the same period.

[00:01:10] Douglas McIntyre: So it’s

[00:01:12] Douglas McIntyre: One is a flat as good. Now here’s my prediction. Fords have stuck with farm, but if you get to the point of humiliation, Where your CEO has done nothing to the stock price in basically two years. It’s, it’s flat. And, you could have put your money into any S&P, ETF or mutual fund.

[00:01:39] Lee Jackson: You could have done great.

[00:01:41] Douglas McIntyre: I think that that’s when the Ford family dumps Farley, is when it’s clear that he has done nothing for the investor.

[00:01:48] Lee Jackson: Well, and unless he has some sort of secret plan that nobody’s aware of, you know, outside of Dearborn, Michigan. Yeah. I mean, they can’t stick with this guy. They absolutely can’t. And like we’ve discussed before, I mean, sure they could cut the dividend, but the Ford family is not going to be a big fan of that because they live off that dividend.

[00:02:09] Lee Jackson: You know, many of them, I would suspect. And, Yeah, there’s no way he lasts. I’d be stunned if he’s, if he’s around this time next year.

[00:02:20] Douglas McIntyre: Well, there are a few things that are hurting them, obviously their EV sales are crummy, China used to be a remarkably great, it was just cash machine for U. S. car companies. Now the Chinese car companies have almost pushed U.S. Car companies and VW out of the Chinese market.

[00:02:44] Lee Jackson: That’s right.

[00:02:45] Douglas McIntyre: GM (NYSE: GM) just took a 5 billion write down.

[00:02:48] Lee Jackson: I’m just going to bring that up. GM took a 5 billion hit and a lot of that was on, plants and, and, and, and things of that nature, infrastructure in China.

[00:02:59] Douglas McIntyre: Most,

[00:02:59] Lee Jackson: Ford got to be getting hammered as well. Yeah.

[00:03:03] Douglas McIntyre: So, Farley has is a company that, where about a third of U. S. sales are the F Series, the, the, the pickup,

[00:03:14] Lee Jackson: Right. Great.

[00:03:16] Douglas McIntyre: That it, but it’s the same. it hasn’t gone up or down to reinvent four. I’m, I’m gonna tell you what you have to do to reinvent four.

[00:03:25] Douglas McIntyre: Anybody. gotta get to the point where the F-150 series is 20% your revenue and not

[00:03:34] Douglas McIntyre: three, because that

[00:03:36] Douglas McIntyre: diversified outside. your, your core customer that hasn’t happened. Farley hasn’t been able to do it. Farley’s out after sometime in the new year,

[00:03:50] Lee Jackson: yeah, I think you’re right. And again, Ford has solid, solid product line. You know, they brought the Bronco back, you know, the front end kind of looks like a Rivian (NASDAQ: RIVN). It’s kind of odd, but you know, I see a lot of them and the Bronco was an iconic, you know, vehicle for years. So they have a good vehicle line and it’s popular with Americans, but a lot of Americans, especially where I live in the South, they’d like to buy domestic.

[00:04:15] Lee Jackson: Automobiles and vans and well, not vans, but trucks and, and, SUVs. And yeah, if they can’t shape that up and also, well, what about Lincoln Mercury? What do you do with that?

[00:04:26] Douglas McIntyre: Lincoln does. Okay. Now, but if you think about it, Lincoln 50 years ago, was it, was in Cadillac where the luxury car companies now ahead of them, Lexus, BMW, Mercedes, Audi, at least, then you’ve got Acura, Porsche. infinity right there in the mix. So

[00:04:48] Lee Jackson: Absolutely.

[00:04:49] Douglas McIntyre: Is that a good, is it good for Ford to have a luxury division?

[00:04:52] Douglas McIntyre: It may not be. It’s, it’s

[00:04:54] Lee Jackson: I think they could dump it or, or try to sell it like our, like our pals at Stellantis we discussed are trying to do. So that could be a, there could be a demise. Cause I don’t see any and there was a there was a point when Ford when Lincoln came back with the Navigator. And some of those new designs and they were big and pretty cool looking and I saw a lot but last couple of years I don’t see nearly as many and there’s not a new design You know that catches people’s eyes.

[00:05:23] Douglas McIntyre: So watch for Ford to hit where it was January, two years ago,

[00:05:31] Lee Jackson: All right.

[00:05:32] Douglas McIntyre: 10 bucks, 10 bucks, two years ago, compared to what it’ll probably be 10 bucks now.

[00:05:38] Lee Jackson: Yeah

[00:05:39] Douglas McIntyre: in the Ford stock over that two year period. I think that’s the end of the CEO

[00:05:44] Lee Jackson: Yeah during the biggest market rally since you know, 96 So yeah. He’s doomed.