Investing

Ford (F) Is Simply the Worst Run Company in America Right Now

Austin Smith

Published: January 23, 2025 8:26 am

24/7 Wall St. Key Points:

• Under CEO Jim Farley, Ford Motor Co. (NYSE: F) has had flat stock performance despite large EV investments in the Mustang Mach-E and F-150 Lightning.
• Stronger performance by rivals like General Motors Co. (NYSE: GM) and Toyota Motor Corp. (NYSE: TM) contrasts with lackluster demand for Ford’s EVs shown by intense advertisements including 0% financing and free home charging station installations.
• Ford’s financial results still show weight from warranty-related expenses and quality problems, which heightens investor worries and reduces stock performance.
• Ford’s best days may be behind it, but “The Next Nvidia” stocks are just revving up and could be the biggest winners of 2025. Click here to learn more.

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Transcript:

[00:00:04] Douglas McIntyre: Ford, the most horribly run big company in the United States, Mr. Farley.

[00:00:11] Lee Jackson: They’re gonna get your phone number, buddy.

[00:00:12] Douglas McIntyre: Mr. Farley, their CEO, joined in October 2020. He didn’t join, he promoted. So, what’s interesting is, is that we’re now coming up on a period when the stock will be flat compared to that month. Now, it’s gone up some, it’s gone down some, but if you take the day he joined and you take, if you look at the chart, probably a month from now, there’s a very, very high degree of likelihood that he, his, the stock will be flat.

[00:00:45] Douglas McIntyre: For that whole period. So he, he joined, he goes along, it’s flat. I want to know, how do you keep your job at a public company when you’re, you manage, and of course the S& P is probably, you know, 70 percent since then. How does, and GM is up. So how do you, how do you do that?

[00:01:05] Lee Jackson: I don’t know. I don’t know. And, and it’s, and it’s odd because we’ve had this discussion before that they have two of the most popular vehicles in the history of the automobile industry. Two, not just one, two in the F-150 and the Mustang. And, you know, they tried to electrify both of those to not a whole lot of success. And now I saw this recently, and I think we, we spoke about this. I saw, you know, get the electric Mustang seven years, no interest. So in other words, in an effort to get rid of these, they’re going to start putting all that on their own book instead of, you know, Ford Motor Credit or something like that, or, you know, no, no, it’s going to have to go on a side book or side pocket. Ford and I don’t know because it, I mean, Chevrolet has spent billions on EV too, but they had a great year. I mean, they had a huge year, but one thing they did that Ford can’t do is time ago, it may have been COVID time or prior GM cut their dividend, they just totally eliminated it. And

[00:02:17] Lee Jackson: could be a difference maker.

[00:02:19] Douglas McIntyre: Well, the other thing is, is, as you mentioned, you had the Ford F 150, best selling vehicle in the United States for now 48 years. You had the Mustang iconic two door sports car first sold. Lee Iacocca, who eventually ran Chrysler, invented the Mustang. It was launched in 1964. For some reason, they decided to take a two car, two door, gas powered sports car and make it into an EV called the Mustang Mach E, which is a crossover.

[00:02:53] Douglas McIntyre: So that made all that made all sorts of sense. They electrified, obviously, the F 150. It’s now called the Lightning. But by the way, I checked. Just a few hours ago, you can now get 0% financing for 72 months on both of them,

[00:03:08] Lee Jackson: Oh,

[00:03:09] Douglas McIntyre: and the Mustang,

[00:03:10] Lee Jackson: so

[00:03:10] Douglas McIntyre: and you get a free,

[00:03:12] Lee Jackson: financing. Okay.

[00:03:13] Douglas McIntyre: and you get a free charging station installed at your house.

[00:03:17] Douglas McIntyre: The charging station and the installation. Both of you get both of them. So you know, you talk to the public relations people at Ford and they say, well. Well, we pay a good dividend. So they say, well, the stock really isn’t flat since he got there because you have to take into account the dividend. And it’s like, that’s really the best thing you have to say to me about the stock price.

[00:03:42] Lee Jackson: Yeah, it’s, it’s been pathetic and it would be one thing if it was kind of across the whole industry, but that’s not the case. You know, Toyota has been killing it as always. You know, Honda had a good year. Nissan had a good year and you know, they all have hybrids and, but I don’t think any of those companies have poured the kind of money that Ford did, you know, into the EV. It all became, it was just It was really a function of the last administration or the one that’s leaving next Monday. And that, you know, they were making all these mandates and, oh, you got to, you know, you got to be done selling, you know, internal combustion engine cars by 2040, that’s never going to happen.

[00:04:26] Lee Jackson: Never.

[00:04:27] Douglas McIntyre: And it’s not going to happen. I mean, look, Ford said they would put 30 billion into EVs. I don’t know if they ever got there. I don’t think they’re saying, they said they’d get to the point where they could sell the manufacturers, 600, 000 EVs. Per year, I think they sold a fraction of that last year and they’re not going to share.

[00:04:48] Douglas McIntyre: And the other thing that is rarely mentioned is is that they take charges every quarter on their warranty cost So the the quality of their fleet in general is so poor That they’re being hit with these mass warranty write offs every quarter. So that keeps the stock down I’m going to answer my own question.

[00:05:12] Lee Jackson: Okay,

[00:05:12] Douglas McIntyre: probably there is simple The Fords have the controlling block of stock. Bill Ford is the executive chairman, which means he’s really, he’s really the CEO, really. And the Fords can keep anybody in that they can keep anybody they want in that job, as long as they want. No one has a say. And I would guess having looked at the proxy.

[00:05:36] Douglas McIntyre: Farley’s probably averaged about 20 million in comp a year. So,

[00:05:45] Lee Jackson: If you can get it and not really deliver anything.

[00:05:47] Douglas McIntyre: so, just so everybody knows, I don’t like this stock.

[00:05:51] Lee Jackson: No, you do not like this time.